The 6th Circuit U.S. Court of Appeals struck down the Federal Communications Commission “Net Neutrality Rule” that regulates internet broadband services on January 2. If not overturned, this holding will have major implications not just for the provision of those services, but for other intrusive regulatory schemes as well. The decision may be the harbinger of efforts by the incoming Trump Administration to rein in the regulatory state.
The Net Neutrality Decision
The January 2 ruling is just the latest chapter in a saga that dates back to the Obama Administration, as explained in the Court’s opinion (citations omitted):
“As Congress has said, the Internet has ‘flourished, to the benefit of all Americans, with a minimum of government regulation.’ The Federal Communications Commission largely followed this command from the Telecommunications Act of 1996 by regulating the Internet with a light touch for nearly 15 years after enactment. But since, the FCC’s approach has been anything but consistent.
Beginning in the late 2000s, the FCC undertook several attempts to impose so-called ‘net neutrality policies,’ which prohibit Broadband Internet Service Providers from controlling users’ Internet access—by varying speeds or blocking connections to third-party websites, for example—based on content, commercial agreements, and other reasons a provider might want to manage a user’s Internet experience. Those efforts culminated in 2015, when the FCC concluded for the first time that Broadband Internet Service Providers offer to consumers a ‘telecommunications service’ and thus are common carriers—and subject to extensive regulation (including net-neutrality restrictions)—under Title II of the [1995] Communications Act.
Corresponding with a change in administrations, in 2018, the FCC rescinded its 2015 determination and instead reverted to its historical hands-off approach to Internet regulation by concluding that Broadband Internet Service Providers offered only ‘information service.’ That change lifted the net-neutrality requirements.
The [U.S. Court of Appeals for the] D.C. Circuit heard substantial challenges to the 2015 and 2018 orders. It applied the now-overruled Chevron doctrine in each case and upheld both wholly inconsistent regulations as ‘permissible’ under the [Communications] Act. [The Chevron doctrine,’ stemming from a 1984 Supreme Court case, had directed federal courts to defer to federal agencies’ interpretations of ambiguous statutes that those agencies administer, so long as those interpretations were reasonable.]
Today we consider the latest FCC order, issued in 2024, which resurrected the FCC’s heavy-handed regulatory regime. Under the present Safeguarding and Securing the Open Internet Order, Broadband Internet Service Providers are again deemed to offer a ‘telecommunications service’ under Title II and therefore must abide by net-neutrality principles. But unlike past challenges that the D.C. Circuit considered under Chevron, we no longer afford deference to the FCC’s reading of the statute. [The Supreme Court overruled Chevron in the 2024 Loper Bright case, which held that only courts interpret statutes. Under Loper Bright,] our task [instead] is to determine ‘the best reading of the statute’ in the first instance.
Using ‘the traditional tools of statutory construction,’ we hold that Broadband Internet Service Providers offer only an “information service” under 47 U.S.C. § 153(24), and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the ‘telecommunications service’ provision of the Communications Act.
Nor does the Act permit the FCC to classify mobile broadband—a subset of broadband Internet services—as a ‘commercial mobile service’ under Title III of the Act (and then similarly impose net-neutrality restrictions on those services).
We therefore . . . set aside the FCC’s Safeguarding Order.”
The 6th Circuit Decision’s Implications
The 6th Circuit decision has 4 major economic and legal policy implications that may well interest the Trump Administration.
First, the decision meshes well with predictions that the new Administration will seek to undo net neutrality as part of its innovation-oriented technology and telecommunications policy.
The 6th Circuit’s holding is in line with the reasoning behind the 2018 Trump FCC’s order eliminating net neutrality. The Biden Administration lacks the time to appeal the 6th Circuit’s holding, which predictably will be supported by the Trump Administration.
As to likely economic effects, peer-reviewed economic research indicates that “net-neutrality rules do, in fact, slow broadband investment, as measured by the number of fiber connections deployed.” Moreover, economic evidence indicates that the internet thrived, broadband speeds rose, and prices dropped in the years following the 2018 repeal of net neutrality.
Second, the decision demonstrates the legal importance of the Supreme Court’s Loper Bright holding.
The Sixth Circuit’s analysis featured its own “best legal interpretation” of the statutory authority for the Biden FCC net neutrality rule. While disagreeing with the FCC’s statutory construction used to defend the rule, it treated it with some respect. It is certainly plausible that the rule would have survived had the permissive Chevron review standard not been overturned. (Recall that under Chevron the reviewing D.C. Circuit Court of Appeals upheld both the 2015 Obama net neutrality rule and the 2018 Trump rule that displaced it.)
Third, the decision highlights he way in which Loper Bright promotes beneficial legal certainty and the rule of law.
The decade of “legal ping pong” arising from the contrasting Obama, Trump, and Biden broadband regulatory approaches undoubtedly generated future legal uncertainty for internet firms. Such uncertainty probably tended to discourage broadband-related innovation and investment.
This problem is not unique to the internet – it may affect any regulated sector where a change in administrations is likely to alter regulatory standards. Greater certainty in the law creates a more stable, predictable, and beneficial legal framework for economic activity. Court interpretations of particular laws are not set in stone, but are less likely to be more stable and yield greater certainty than changes in political leadership.
Fourth, the decision potentially could be leveraged by the new Trump Administration to support its regulatory reform efforts.
As I explained in a very recent article, the Trump Administration could perhaps invoke Loper Bright in seeking to eliminate old regulations employing questionable statutory readings and in constraining the breadth of those new regulations that are issued. The 6th Circuit’s opinion serves as a warning that federal courts will not lightly sit back and “give a pass” to rules that are not precisely bound to statutory language.