Federal court throws cold water on California net neutrality and the FCC

10 September 2018 by Steve Blum
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A federal appellate court ruling in Minneapolis could, if its reasoning is adopted nationwide, kill any attempt by California to establish our own network neutrality rules. The court’s logic could also spell trouble for the FCC’s 2017 decision to roll back the federal net neutrality regulations it approved in 2015.

The Minnesota Public Utilities Commission wanted to regulate Charter Communications voice over Internet protocol (VoIP) service as if it was old school, plain old telephone service (POTS). Charter didn’t like that idea, and took the matter to a federal judge, who agreed. The MPUC appealed. On Friday, in a split decision, the federal eighth circuit court of appeals said the judge and Charter had it right: VoIP and POTS are two different animals.

At the center of the dispute is whether VoIP is an “information” or “telecommunications” service. If it’s a telecoms service, then state utility commissions have clear authority to regulate it. If it’s an information service, then “any state regulation of an information service conflicts with the federal policy of nonregulation”, according to Friday’s decision.

That seemingly absolute prohibition would blow away the central argument that Californian net neutrality advocates made in support of senate bill 822 (which is in governor Jerry Brown’s hands now). They said that because the FCC decided that broadband is an information service and not a telecoms service, it can’t issue an order preempting state-level regulations, as it did. The eighth circuit ruled, in effect, that overall federal policy – i.e. congress’ intent – precludes states from regulating an information service, regardless of what the FCC does or doesn’t say. That’s a tall, perhaps insurmountable, legal barrier for SB 822.

On the other hand, the eighth circuit’s ruling also declared that Charter’s VoIP service "is an information service because it ’makes available information via telecommunications’”. Where does this telecommunications capability come from? From Charter’s underlying broadband service.

In other words, broadband is a telecoms service. If the federal court in Washington, D.C. handling the appeal of the FCC’s net neutrality rollback, accepts the eighth circuit’s logic, then it would throw out the FCC’s 2017 decision and the 2015 net neutrality rules would be back in effect.


We’re years away from a final resolution of whether the 2017 FCC decision or SB 822 are consistent with federal law. Neither the D.C. court or the ninth circuit court of appeals (which will probably review SB 822) are obligated to follow the eighth circuit’s ruling. All can – will – be appealed to the federal supreme court, which is even likelier to step in if appellate decisions conflict with each other.