The FCC regulation web – again

In a January blog I discussed the needless web of regulation created by the FCC’s classification of broadband as a Title II common carrier service and potential state regulation. Unfortunately, the FCC is poised not only to apply utility-style regulation but also to allow states a level of jurisdiction.

In its NPRM, the FCC initially proposed to prevent “a patchwork that includes separate state and local requirements.” But while the FCC’s April 4 draft order invokes preemption, it specifically refrains from preempting California’s Internet Consumer Protection and Network Neutrality Act of 2018. Paragraph 270 of the draft order then provides state enforcement jurisdiction:

Nor do we see any reason at this time to preempt California from independently enforcing the requirements imposed by our rules or by the state’s parallel rules through appropriate state enforcement mechanisms. On the contrary, we think state enforcement generally supports our regulatory efforts (emphasis added) by dedicating additional resources to monitoring and enforcement, especially at the local level, and thereby ensuring greater compliance with our requirements. However, should California state enforcement authorities or state courts seek to interpret or enforce these requirements in a manner inconsistent with how we intend our rules to apply, we will consider whether greater preemption is needed at that time.

In light of its caveat about considering greater preemption for inconsistent interpretation or enforcement, the FCC will need to keep its preemption power at the ready. State enforcement proceedings can be a stacked deck against service providers in which states reach outcomes pursuant to their own legal interpretations and enforcement methods. California Public Utility Commission (CPUC) enforcement proceedings are illustrative. 

As described in the January blog, a typical CPUC enforcement proceeding would take place under the CPUC’s auspices in a CPUC hearing room, the administrative law judge is a CPUC employee, the CPUC’s Legal Division typically participates in the proceeding and the CPUC commissioners determine the final order. In addition, third parties, such as self-styled consumer groups, can intervene in the proceeding and receive intervenor compensation paid by the company that is the subject of the proceeding. 

The FCC is therefore giving its blessing to enforcement in which the CPUC plays judge and jury, all while requiring the broadband provider to pay intervening third parties who oppose it.

The regulatory webs spun by the FCC’s Title II proposal would make any industrious spider envious.