Unintended Consequences: Telecoms Upset As State-by-State Net Neutrality Laws Pass

Be careful what you wish for department.

Big telecom and cable companies  thought they had been clever getting the US Federal Communications Commission to jam through the elimination of net neutrality despite popular opposition. But in a Federal system, states have a lot of power. So now, more than half the states have either passed or are considering reinstitution of net neutrality.

The result will be a patchwork of as many as 50 different state regulations, some outlawing antic-competitive behavior - part of the point of eliminating net neutrality - and which will be more expensive and time consuming for the telecoms to administer than the national net neutrality rule they overthrew, possibly offsetting the added profits on which they were counting. JL


Karl Bode reports in Tech Dirt:

More than half the states in the country are now pursuing their own net neutrality rules. Some of the legislation closely mirrors the discarded FCC rules (Oregon and Washington), while others ban states from doing business with ISPs that engage in anti-competitive net neutrality violations. These rules carve out vast exemptions for "reasonable network management," only outlawing anti-competitive behavior.
In the wake of the FCC's extremely-unpopular repeal of net neutrality, more than half the states in the country are now pursuing their own net neutrality rules. Some of these efforts are taking the form of actual legislation that closely mirrors the discarded FCC rules (as seen in Oregon and Washington), while others involve the creation of executive orders adjusting state policies to ban states from doing business with ISPs that engage in anti-competitive net neutrality violations. In most instances these rules carve out vast exemptions for "reasonable network management," only outlawing anti-competitive behavior.
ISPs have of course been quick to whine about the unfairness of having to adhere to 50 different rules governing net neutrality, even though most implementations closely mirror the FCC rules these same lobbyists just successfully killed. US Telecom, a lobbying organization primarily managed by AT&T, lamented the unfairness of this scenario in a conversation with the Washington Post:

"As we have cautioned repeatedly, we simply cannot have 50 different regulations governing [broadband],” said USTelecom, a major trade association for Internet providers. “It’s time for Congress to step up and enact legislation to make permanent and sustainable rules governing net neutrality."

So one, most of the state-level rules closely mirror the same rules the FCC is trying to eliminate, so most of them are fairly uniform. It's also worth pointing out that these companies already have to navigate a vast array of regulations governing phone, cable and broadband service -- rules that can often vary town by town. In other words, these net neutrality efforts aren't as uncommon, discordant and fractured as the telecom industry might have you believe.
Granted having disparate state-level protections may in some ways be cumbersome, but that's again something ISPs like AT&T, Verizon and Comcast should have thought a little harder about before killing extremely popular and modest (by international standards) federal protections. Large ISP lobbyists created this mess and, unsurprisingly, they're simply refusing to own it.
US Telecom is also being disingenuous in claiming to want "permanent and sustainable rules" via new legislation. As we've noted several times, what they really want is a net neutrality law they know they'll write. One that prohibits ISPs from doing things they never intended to do (like blocking websites entirely), while carving out vast loopholes allowing anti-competitive behavior on numerous other fronts (zero rating, interconnection). The real goal: pass flimsy legislation that pre-empts tougher state rules, or future efforts by the FCC or Congress to implement meaningful protections.
ISPs like Comcast and Verizon successfully lobbied the FCC to include language in its net neutrality repeal banning states from protecting consumers ("states rights" and all that). But the FCC's legal authority on this front is untested, setting up some interesting legal showdowns in the weeks and months to come. And while this too is going to generate ridiculous costs predominately in the form of billable hours, blame for this needs to be placed where it belongs: in the laps of ISP lobbyists and revolving door regulators that thought ignoring the facts and the public interest would be a wonderful idea.