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A federal court just said states can set their own net neutrality rules. What that means for Minnesota

The opinion was a victory for states that have instituted rules to bar internet service providers from throttling web traffic and charging businesses more for faster speeds. It also gives new life to those who want Minnesota to follow suit.

Ajit Pai
After Donald Trump won office, the FCC, led by the new chairman he appointed, Ajit Pai, axed the rules and moved to block states from implementing their own.
REUTERS/Aaron P. Bernstein

A federal appeals court on Tuesday largely upheld a decision by federal regulators to reverse Obama-era net neutrality rules, but also said states could implement their own internet laws.

The opinion by the D.C. Circuit Court of Appeals was a victory for states like California and Washington that have made rules to bar internet service providers from throttling web traffic and charging businesses more for faster speeds. They can still face legal challenges. But the ruling gives new life to those who want Minnesota to follow suit.

Top Republicans at the Minnesota Legislature have argued the state can’t and shouldn’t enforce its own net neutrality laws, and internet providers like AT&T have pledged to adhere to the “principles of net neutrality.” Yet the Democrats who control the state House passed new regulations this year anyway.

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A measure first introduced by Rep. Zack Stephenson, a first-term DFLer from Coon Rapids,  stalled in the Republican-led Senate. But he pledged to try again in 2020. “I think net neutrality is the consumer protection issue of our day,” Stephenson said. “The unrivaled power that [internet service providers] have to control what people see when they open their browser is a paramount concern.”

A brief history of net neutrality

The Federal Communications Commission (FCC) approved net neutrality rules in 2015, during the tenure of former president Barack Obama. The regulations aim to stop internet service providers from slowing down browsing or favoring certain services with faster speeds.

State Rep. Zack Stephenson
State Rep. Zack Stephenson
Supporters have framed net neutrality as a necessary protection against powerful internet providers who could tilt the scales of commerce to elevate preferred businesses. For instance, some worry a provider could strike a deal to slow Netflix streaming while boosting Hulu or another competing business. The concept is often described as “paid prioritization,” or an internet “fast lane.”

“In today’s Internet economy, a rollback of Net Neutrality means businesses and startups that operate online or use platforms like Twitter to reach customers would be at the mercy of ISPs for vital communication exchanges,” said Twitter’s public policy manager Lauren Culbertson in a 2017 statement.

After Trump won office, the FCC, led by the new chairman he appointed, Ajit Pai, axed the rules and moved to block states from implementing their own. Some telecom companies said net neutrality discouraged investment in broadband and slowed innovation because there would be less incentive to create faster internet speeds. Pai argued net neutrality wrongfully regulated internet service providers as utilities rather than an “information services,” which faces less oversight.

In response, states including California and Washington passed their own net neutrality rules, and 22 states sued the FCC over its decision. On Tuesday, the D.C. Circuit said the FCC didn’t have the power to preempt states, although it was allowed to reverse its own net neutrality rules. Legal hurdles remain for states, which will likely still face lawsuits and have to prove their rules don’t conflict with federal policy.

In a statement, Pai said the court “affirmed the FCC’s decision to repeal 1930s utility-style regulation of the Internet imposed by the prior Administration.”

Drew Hansen, a state representative in Washington who sponsored net neutrality legislation, said their first-in-the-nation law passed “in the face of a vigorous argument that our law would be preempted because the FCC had told us that it would preempted.”

“As it turns out the D.C. circuit ruled this morning that we were right,” Hansen said. Washington’s Legislature is controlled by Democrats, but Hansen noted his measure passed with significant GOP support. “People of all political stripes — Republicans, Democrats and independents — understand why a free and open internet that’s not controlled by giant corporations is really important.” 

A debate at the Legislature

At a Minnesota House hearing in March on Stephenson’s bill, debate was less focused on whether the government had the authority to pass net neutrality laws and more focused on whether it should.

Anna Boroff, executive director of the Minnesota Cable Communications Association said all cable companies in the state “support and strictly adhere to the principles of net neutrality,” which includes no blocking of legal content and no throttling of web traffic.

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But she urged a federal standard, rather than a patchwork of state laws that could be hard for companies to comply with. “Data travels without regard for state lines,” Boroff said. “Several of our members cross multiple state borders.”

The U.S. House voted this year to reinstate federal net neutrality bills but Senate Majority Leader Mitch McConnell of Kentucky has called the measure dead on arrival. On Tuesday, Boroff again called on Congress to pass a bipartisan national policy, and said state attempts to regulate the internet will “have a direct and adverse impact on providers’ ability to deploy broadband and encourage investment.”

Paul Weirtz, president of AT&T Minnesota, said at the March hearing the company is committed to an open internet and also called for national regulations. “We do not block websites, we do not censor online content, we do not throttle, discriminate or degrade internet traffic, period,” he said.

Senate Majority Leader Mitch McConnell
REUTERS/Jonathan Ernst
The U.S. House voted this year to reinstate federal net neutrality bills but Senate Majority Leader Mitch McConnell of Kentucky has called the measure dead on arrival.
John Gordon, executive director of the ACLU of Minnesota, said the industry created its own problem by lobbying for the FCC to reverse net neutrality. “They’re killing off net neutrality rules on a federal level and then come crying to the states about why the states shouldn’t be doing anything,” Gordon said. “It’s a little bit like the guy who kills both of his parents and then seeks mercy on the grounds that he’s an orphan. I don’t think that we should be fooled by that kind of argument.”

Weirtz shot back: “A few weeks ago we were accused of censoring the rock band Pearl Jam as a reason for why we need net neutrality. Today, AT&T and others are the Menendez brothers, the equivalent of killing your parents. This bill is really a solution looking for a problem.”

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The measure that passed the Minnesota House would block internet service providers from censoring “lawful content,” impairing or degrading traffic and engaging in paid prioritization.

State Sen. David Osmek
State Sen. David Osmek
The House measure also prevents state and local governments from doing business with providers that don’t stick to net neutrality rules. It did exempt governments in Minnesota in places where only one provider exists, and also had an exception for providers expanding services in rural areas as part of the state’s border-to-border broadband grant program.

Sen. David Osmek, a Republican from Mound who chairs the Senate’s Energy and Utilities Finance and Policy Committee, said he wasn’t interested in passing net neutrality legislation. 

In an interview before the D.C court ruling, he said the issue should be dealt with by the federal government, and said there’s no proof that providers have been “blocking or slowing down speeds whatsoever.” He described the push for net neutrality as a slick marketing campaign against a “bogeyman” that doesn’t exist.

(At the March hearing in the House, Gordon at the ACLU pointed to the time AT&T blocked FaceTime video chats on its cellular network for users on some of its data plans as evidence of telecom meddling.)

In a statement issued after the D.C. court order, Stephenson said the ruling “only adds urgency to the need to pass net neutrality legislation in our state.”

“Minnesotans deserve a fair and open internet,” he said.