Net neutrality kicks in next month, spawning small cable co fears

  • The FCC is facing multiple lawsuits seeking to block net neutrality, due to kick in July 22
  • Parties to the lawsuits are jockeying over legal jurisdiction
  • Small cable companies fear rate regulation, which they say could destroy their business 

The FCC’s net neutrality rules will go into effect July 22, unless the Sixth Circuit Court of Appeals places a stay on the rules.

Several different groups have filed lawsuits, claiming that the Federal Communications Commission (FCC) broke the law when it decided to reclassify broadband providers under Title II of the Communications Act.

Because the groups filed their lawsuits in seven different circuit courts, a lottery was held to select the court where the cases could be consolidated, and the Sixth Circuit was selected in the lottery.

The petitioners in the now-combined lawsuit are asking the Sixth Circuit to delay (or stay) the effective date of net neutrality until the lawsuit is resolved.
At the same time, the FCC has asked to move the lawsuit to the U.S. Circuit Court of Appeals in Washington, D.C.

Grant Spellmeyer, president and CEO with the trade group ACA Connects, said, “I suspect it stays in the Sixth Circuit. It’s hard to move, but not impossible.” He said whichever court keeps the case may hold a hearing in advance of July 11 to decide if net neutrality will be delayed. But he thinks the chances of a delay are less than 50%.

“I would tell my members to prepare for it to go into effect,” said Spellmeyer.

Small cable cos and net neutrality

Ever since the FCC announced in Fall 2023 that it was revisiting net neutrality, the nation’s largest broadband providers — such as AT&T, Verizon, Comcast and Charter — have complained that net neutrality rules are unnecessary because providers have not been throttling or blocking internet traffic.

But when the FCC introduced its net neutrality rules, the agency focused more on its ability to oversee broadband outages. And it also said that by classifying broadband providers under Title II, it can better protect national security.

Fierce Network asked Spellmeyer whether the whole “blocking and throttling” concern was just a red herring? We asked what the operator members of ACA Connects are most concerned about. Are they worried about the additional reporting burdens that may stem out of net neutrality — such as outage reporting and cybersecurity reporting?

Spellmeyer said their biggest concern is rate regulation.

“They [the FCC] say they’re not going to regulate rates. But that’s very easy for them to move back on in the future,” said Spellmeyer.

He cited a recent case where the Second Circuit upheld a New York law, mandating low-cost internet service for low-income customers

The New York state law requires ISPs to offer a low-income broadband service — specifically $15 per month for 25 Mbps and $20 per month for 200 Mbps.

Although the FCC has stated numerous times that it does not intend to implement any rate regulations under its powers via net neutrality, ISPs, including small cable companies, are not convinced. They say their business models could completely blow up if the government starts dictating the prices they charge to customers.