On January 2, 2025, the U.S. Court of Appeals for the Sixth Circuit struck down the Federal Communication Commission’s (FCC) 2024 attempt to impose net neutrality rules on broadband internet service providers pursuant to the regulatory framework applicable to telecommunications service providers under Title II of the Communications Act. Although the decision was not a surprise, given the court granted a stay of the Safeguarding and Securing the Open Internet Order (Safeguarding Order) in August, it is nevertheless a setback for outgoing FCC Chairwoman Jessica Rosenworcel, who had made re-imposing net neutrality a centerpiece of her agenda. The ruling locks in the status quo regulatory framework for broadband internet service providers, which was adopted in 2017, and imposes transparency requirements on broadband internet service providers but abstains from most regulatory oversight of rates and practices. 

The court’s decision is noteworthy because it is one of the first major appellate decisions in the post-Chevron deference era. Prior to the Safeguarding Order, the FCC had flip-flopped on regulation of broadband internet service providers multiple times, as control of the agency alternated between Democratic and Republican Chairs. Each of these prior FCC orders were upheld by the courts of appeal (at least in large part) under Chevron deference standard, despite the differing practical approaches to broadband classification and regulation. The Sixth Circuit, however, applied the Supreme Court’s 2024 decision in Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2266 (2024), which instructs courts to use “every tool at their disposal to determine the best reading of the statute and resolve the ambiguity” in a statutory framework. Applying Loper Bright, the Sixth Circuit no longer deferred to the Commission’s reading of the statute, instead determining “the best reading of the statute” in the first instance. The court noted that Loper Bright “means we can end the FCC’s vacillations [on the classification of broadband internet services].” 

Turning to the merits, the Sixth Circuit described the question before it as a determination of whether broadband internet service providers are merely a conduit for data transmission and thus offer consumers a telecommunications service or if they instead offer consumers the capability to acquire, store, and utilize data—and thus offer consumers an information service. The three-judge panel found “that Broadband Internet Service Providers offer an information service and that mobile broadband is a private mobile service.” Therefore, it concluded, “the FCC exceeded its statutory authority by issuing the Safeguarding Order.” Central to this conclusion was the court’s determination that:

it makes sense to exclusively classify integrated services, including those offered by Broadband Internet Service Providers, as information services because the definition expressly contemplates telecommunications usage, tying the “offering of a capability” to utilize (for example) information “via telecommunications.” … The key here is not whether Broadband Internet Service Providers utilize telecommunications; it is instead whether they do so while offering to consumers the capability to do more.

The court found that broadband internet service providers do not need to themselves generate, process, retrieve, or otherwise manipulate information in order to “offer” an information service as defined in the Communications Act; instead, the provider merely needs to offer the capability to do so, even if those services are provided by third parties. 

Notably, the court’s decision has implications beyond the net neutrality debate. By providing an interpretation of “telecommunications service” and “information service” under the Communications Act, the court’s decision has implications for other contexts in which those terms are used. The ruling has potential implications for other statutory and regulatory requirements that employ those key terms, including restrictions on the use of customer proprietary network information (CPNI), data breach obligations, and the applicability of federal Universal Service Fund contribution obligations. The decision also potentially resets the dividing line between regulation by the FCC and the Federal Trade Commission, which is barred from regulating common carriers (i.e., telecommunications service providers) but has jurisdiction over non-common carrier services. The Sixth Circuit’s decision, therefore, should be carefully reviewed in a variety of contexts, not just in connection with broadband internet services.