How SCOTUS's latest decision could hinder Democrats’ effort to reinstate net neutrality rules

The Supreme Court’s ruling to curb the power of the Environmental Protection Agency (EPA) could hurt Democrats' long-fought battle to reinstate Obama-era net neutrality rules. 

If the same principle is applied from the majority opinion in Thursday’s case, arguing that Congress must grant clear authorization for certain regulations, the Federal Communications Commission (FCC) may not be able to restore rules banning service providers from blocking or throttling websites.

“There is a large shift of power from the agencies to the courts,” said Blair Levin, a policy adviser to New Street Research who served as chief of staff to former FCC Chair Reed Hundt.

Levin and other experts say the decision was written in a way that opens the door for rulemaking decisions at the FCC and the Federal Trade Commission (FTC) to potentially be overturned in court. 

At the heart of the issue is the conservative majority basing its 6-3 decision on a legal philosophy called the “major questions doctrine.” The principle means proposed rules can be challenged on the basis that the rule is a “major question” that only Congress should be able to address.

The decision essentially gives courts the ability to decide what is a major question, and in turn decide the regulation requires clear authorization from Congress, Levin said. 

“So it adds a level of uncertainty to any decision by an agency,” he said. “Whatever you thought the odds of the agency decision being overturned before, you now think are higher.”

Democrats and advocates have been pushing to have the 2015 net neutrality rules reinstated after they were revoked under the Trump administration. But a year and a half into the Biden administration, the FCC has been unable to take action due to a 2-2 partisan deadlock on the commission amid hold-ups over Biden nominee Gigi Sohn in the Senate.

Now, even if a Democratic-controlled FCC were to reinstate the order, the rules would face a more uncertain path forward in the courts. 

“There's no way to sugarcoat it and say that this is good news for the [Federal Trade Commission] or the FCC. Or any kind of regulatory action,” said Matt Wood, vice president of policy and general counsel at Free Press.

But, he said, it’s not necessarily “decisive or bad news,” since the decision was delivered in a way that appeared to apply the major questions doctrine more specifically to the agency and statute before the court. 

“I can't sit here and guarantee that the FCC would win on that again, I just think they have better chances, by far, than what it seems like the EPA faced today on this particular question,” Wood said. 

Especially after the Supreme Court’s recent decisions, including reversing nearly 50 years of precedent to eliminate the constitutional right to abortion established by Roe v. Wade, Wood said nothing feels like “settled law” anymore with the current justices. 

Levin also said that the FCC may fare better in keeping its authority compared to other agencies, in part because the court cited the 2006 ruling in the Gonzalez v. Oregon case in its decision to curtail the EPA's power. The Gonzales decision "seemed to imply the FCC has broad powers not subject to being undercut by the" major questions doctrine, Levin wrote in a note for New Street Research on Friday. 

However, the court also cited a dissent written by then-Judge Brett Kavanaugh, now a Supreme Court justice, from when the D.C. circuit upheld the Obama administration’s net neutrality rules. 

Kavanaugh, in the dissent, suggested the FCC’s authority in that case should be considered a major question. 

The FTC, which has been more aggressively pursuing rule changes since Chair Lina Khan assumed her position, may be in a more precarious position. 

New rules put in place by the FTC, including the agency’s joint effort with the Department of Justice to create new merger guidelines, may be interpreted as a major question if challenged in court, according to experts. 

“The more ambitious, the more far reaching, the more novel the approach that the FTC uses in its rules, the greater the degree of scrutiny the court would apply to them,” William Kovacic, a George Washington University Law professor and former FTC chair, said. 

“All of this is happening at exactly the moment the FTC is seeking to expand the frontiers of its program and to do novel and creative things — they're doing exactly the moment that the Court yesterday and in other decisions is saying, ‘we're skeptical,’ ” he added.