Last week I discussed the Sixth Circuit decision classifying broadband as a Title I information service and effectively eliminating the Federal Communications Commission’s (FCC) general power to regulate broadband. But like nature, regulators abhor a vacuum. While closing the door to federal regulators, the decision also creates opportunities for states to act. This post examines the present and potential future of state-level broadband regulation.

Historically, state regulators were key players in the telecommunications space. The Communications Act of 1934 divided the telecommunications world into two neat hemispheres: The FCC regulated interstate long-distance service, while state commissions regulated local and intrastate long distance. This division of authority made sense in a world where 98 percent of calls were local, and long-distance calls were a luxury. But the Telecommunications Act of 1996 dramatically rearranged the balance of power between the federal government and the states. Meanwhile, local telephone service largely disappeared as a separate market, before communication shifted from the telephone to broadband networks. As a result, most states shuttered their telecommunications regulators early in the 21st century.

State regulation re emerged in 2016, pushed not by technocrats at state commissions but by legislators as part of state-level resistance to the first Trump administration. Efforts like California’s net neutrality bill were initially viewed as mostly symbolic. But in the 2019 Mozilla v. FCC decision, the DC Circuit held that because the FCC lacks authority to regulate broadband under Title I, it also lacks the general power to preempt state broadband regulations.

Since then, courts have largely upheld the tentative steps states have taken in this direction. In ACA Connects v. Bonta, the Ninth Circuit rejected the argument that the Communications Act preempts state broadband regulation. (My theory, that the FCC’s choice of Title I over Title II preempts California’s regulation under Geier v. American Honda Motor Co. as conflicting with a federal objective, was untested but does not work in a post Chevron deference era.) More recently, the Second Circuit upheld a preemption challenge to New York’s Affordable Broadband Act rate regulation initiative. Other states have adopted rules requiring public entities to contract only with net-neutral providers, while Maine has imposed opt-in privacy restrictions on broadband providers.

Incoming FCC Chairman Brendan Carr has long made his deregulatory preferences clear and has criticized many of these state regulatory initiatives. So what steps can he—or other deregulation advocates—take to stem this potential tide of state regulation?

Administrative Preemption: FCC preemption seems a difficult path after Mozilla. Importantly, Title I gives the FCC limited authority to regulate communication by wire or radio. But this “ancillary authority” can be exercised only in pursuit of a direct FCC obligation, such as to protect initiatives governing telephony, broadcast, and cable. This is too thin a reed to support a general deregulatory preemption of broadband service, though it could be used to combat specific state initiatives that touch on those concerns (such as onerous state regulation of Voice over Internet Protocol services, perhaps).

Dormant Commerce Clause: The Dormant Commerce Clause offers perhaps a more promising option. This doctrine precludes states from imposing undue burdens on interstate commerce, and was influential in shaping early state efforts to regulate internet-based companies. Under Pike v Bruce Church, a neutral state statute with incidental effects on interstate commerce will be struck down if the burden on interstate commerce clearly exceeds any local benefits. Like many balancing tests, this doctrine is somewhat unpredictable. Plaintiffs brought a Dormant Commerce Clause challenge to California’s law, but abandoned the litigation before courts could rule on it. To succeed, plaintiffs would have to show that differing state-level network management practices could balkanize the American internet and make the delivery of network traffic less efficient. This may be too tall an order; existing law gives states wide latitude to create extraterritorial effects (such as California effectively dictating automobile air quality standards nationwide). But if successful, the burden would shift to the state to quantify the benefits of state regulation—which could prove equally difficult, as such benefits are often conjectural.

Legislation: Ultimately, the best advice to deregulation advocates may be the same as my advice to net neutrality proponents: look to the legislature rather than to lawfare. There are strong arguments favoring deregulatory policy. Regulation inhibits innovation, which is problematic in a technologically dynamic environment. While customers need protection from bad behavior, broadband provider are disciplined by antitrust and consumer protection law, just like every other sector of the American economy. Regulatory advocates should bear the burden of showing why additional sector-specific requirements are needed to address concrete consumer harms.

Federalism is an important component of the American experiment. State-level competition can yield important policy insights. But we should be careful not to balkanize the Internet with state policies better addressed at the national level.