Could net neutrality challenges lead to the end of the FCC?

Governor Kate Brown has signed House Bill 4155 making Oregon the latest US state to push back against FCC moves to repeal net neutrality laws, but are these challenges undermining premise of the FCC?

The whole situation is starting to get a bit messy for FCC Chairman Ajit Pai who has effectively turned almost half of the states against federal efforts to relegate net neutrality to the footnote. While the foundations of the challenges from the states are still a little bit shaky, the Communications Act has a clause which prevents states from passing laws which contradict federal ones, few would have predicted Pai’s actions would have caused such a tsunami of discontent.

In most examples of unpopular legislation or regulation there is compromise or the fad passes allowing politicians to find another banner to wave, but this is an issue which has persisted. In signing the bill into law, Brown is yet another who is challenging the status quo and also foundations of the communications industry. Should these laws be allowed to stand, in direct violation of clauses in the Communications Act, what will be the wider repercussions for federal regulations in the US communications industry?

That said, perhaps this is an unintended, but perfectly acceptable, outcome for Pai and his colleagues. It is no secret the Republicans in US Government lean more towards market freedoms, therefore the redundancy of a national regulatory body would maybe assist in creating a more acceptable market in their eyes.

The idea of a nationalised 5G network was rumoured, though the FCC did its best to distance itself. The agency has also been trying to reduce the influence of the federal Lifeline programme, an initiative which assists poorer families in accessing the digital world. At his first open meeting, Pai promised to “remove unnecessary or counterproductive regulations from the books”. One of his own advisors also wrote an opinion piece asking whether the US actually needs the FCC, suggesting the powers and responsibilities should be distributed among other agencies.

In each of these examples, Pai, or his colleagues, have made efforts or expressed desires to reduce the influence the FCC has on the national communications industry. Each move undermines the position of the FCC and moves the country towards a more hands-off regulatory environment, one which is controlled and influenced by business.

Brown has challenged the legitimacy of the new regulations (or lack thereof) and undermined the position of the FCC in the communications sector. And she is not alone. California State Senator Scott Weiner is introducing Senate Bill 822 which will reintroduce net neutrality while also banning zero-rating, House Bill 2282 has been signed into law in Washington by Governor Jay Inslee and there are numerous other challenges from Senators, Attorney Generals and consumer groups throughout the country.

All of these movement weaken the position of the Communications Act, and in turn the legitimacy of federal agencies and their ability to manage the industry on a national level. In trying to protect net neutrality rules, the Governors, Senators or Attorney Generals are making it more difficult to manage a consistent telecommunications industry.

We do not agree with the wild-west which Pai seems to be promoting, or with the strict regulatory regime former FCC Chairman Tom Wheeler created. The right answer will sit in the middle, but the rules need to be challenged at federal level, in Congress. Right now the states are creating a bureaucratic mess which questions the role of the FCC. Most Democrats in the US are pro-regulation and market controls, therefore we struggle to believe they would be happy to see the influence of such an agency dwindle. Even if they don’t agree with the current establishment, there is a longer-game to think about here.

Can national legislation or agencies survive when national policies are being undermined at a state level? Is this the first Jenga piece being removed at the base of the Communications Act?