Net Neutrality Regulations Spur Lawsuits and a Fear of a Tax Increase

Earlier this year, the Federal Communications Commission (FCC) voted along party lines to approve a net neutrality plan proposed by Chairman Tom Wheeler that was more than 300 pages long.  The Taxpayers Protection Alliance (TPA) was quick to criticize the proposal as completely antithetical to the innovative nature that has been a hallmark of the Internet for nearly two decades. Even though the rules have been published in the Federal Register and are set to  take effect on June 12, 2015, there is a  long road ahead and the battle over the future of the regulation is still far from being resolved.

As expected, the FCC decision sparked a number of lawsuits questioning the FCC’s authority to regulate the Internet under Title II (click here to read a previous blog posting on Title II). Currently, a total of seven legal actions have been taken against the FCC and their plans for net neutrality.

This is not the first time the FCC has been challenged on net neutrality rules in the courts. Last year the FCC lost in Federal Appeals Court against Verizon in which the court held the FCC exceeded their authority with new rules on internet providers.

The new legal action taken this time falls under a similar umbrella of overreach by the agency. Dan Heilman of Newsfactor Network described the substance of the recent lawsuits:

The suits are meant to challenge the FCC’s decision to reclassify broadband as a common-carrier service under Title II of the 1934 Communications Act, and among other things they accuse the agency of not following administrative procedure. USTelecom, which filed one of the lawsuits, claims the agency didn’t give adequate notice that it was planning to reclassify the service. The suits also claim the FCC didn’t develop a sufficient record to support reclassification and that it violated the constitutional rights of the ISPs.

Grant Gross, who covers technology and telecom policy in the U.S. government for the IDG News Service, reported on the latest lawsuit last week:

Broadband provider CenturyLink has joined the list of ISPs and trade groups suing the U.S. Federal Communications Commission over its net neutrality rules.

CenturyLink filed its lawsuit Friday, becoming the seventh organization to challenge the rules approved by the FCC in late February. The FCC officially published the rules in the Federal Register, the official publication for U.S. agency rules, earlier this week, prompting a round of lawsuits.

The six other lawsuits come from two ISPs — AT&T and Alamo Broadband — and trade groups CTIA, the United States Telecom Association (USTelecom), the National Cable and Telecommunications Association and the American Cable Association. Alamo and USTelecom filed lawsuits in late March, with the trade group refiling its suit on Monday. AT&T and the three other trade groups filed lawsuits on Tuesday.

The new rules for net neutrality by the Obama Administration also come with risks to taxpayers. Jim Puzzanghera of the Los Angeles Times detailed what may be a new cost that could come as a result of net neutrality:

Recently adopted net neutrality regulations soon could make your monthly Internet bill more complicated — and potentially more expensive.

Every month, consumers pay a small fee on their phone bills for a federal program that uses the money — a total of $8.8 billion raised nationwide last year — to provide affordable access to telecommunications services in rural areas, underserved inner cities and schools.

Now the fee could start appearing on broadband bills too, in a major expansion of the nearly two-decade-old Universal Service Fund program.

TPA warned taxpayers before the vote that any reclassification of the Internet could open the floodgates of new taxes. If the FCC decided to regulate broadband as a Title II telecommunications service, customers would likely see the Universal Service Fund (USF) contribution fee assessed on broadband bills.

The FCC pushed net neutrality through twice before and both times they were rebuked by the courts. The lawsuits filed are just the first step in a long legal process.  Opponents of Internet regulations will continue to call attention to the damaging impact the new net neutrality rules will have including the threat of increased costs to consumers that are likely to follow.