The DOJ's New Net Neutrality Lawsuit Is A Giant Middle Finger To State Rights, Consumers, Competition & The Democratic Process

from the straight-up-bullshit dept

Mon, Oct 1st 2018 10:44am — Karl Bode

So let's be clear about something: the Ajit Pai FCC's repeal of net neutrality was already a mammoth fuck you to the American public, open competition, and a healthy internet. The effort to neuter the rules was based on bogus telecom lobbyist data, lots and lots of shady behavior, and oceans of complete nonsense. And while folks like Ajit Pai like to speak loftily about his noble effort to "strip away burdensome regulations," the reality is that killing net neutrality served one real purpose: giving natural telecom monopolies the green light to (ab)use a broken, uncompetitive broadband market to screw consumers and competitors alike.

When the FCC killed these overwhelmingly popular consumer protections it wasn't just killing net neutrality, it was killing the federal government's ability to adequately hold lumbering telecom monopolies accountable on the federal level. In addition to neutering the FCC and shoveling any remaining, fleeting oversight to an FTC ill-equipped for the job, ISPs convinced the Trump administration to also try to prevent states from filling the void. As such, both Comcast and Verizon successfully lobbied the FCC to include language in the net neutrality repeal "preempting" (read: banning) states from holding giant ISPs accountable as well.

Again the goal here is obvious: to eliminate any meaningful state or federal oversight of natural telecom monopolies, which will now be left unchecked by neither regulatory oversight nor meaningful competition.

This little gambit came to a head over the weekend, when California Governor Jerry Brown signed the state's shiny new net neutrality law. That law took an incredible collaborative effort to pass, after ISPs tried to neuter most of the bill's key components via procedural gamesmanship, and even took to lying to senior citizens about the proposal in misleading robocalls. The public backlash to these efforts forced the California Assembly and Senate to pass the law in late August, before Brown (amid some uncertainty) signed the bill yesterday afternoon.

Within hours of Brown's signing the bill, the Department of Justice announced it would be suing California, insiting that California's consumer protections were, mystically, somehow "unlawful and anti-consumer":

"Under the Constitution, states do not regulate interstate commerce—the federal government does. Once again the California legislature has enacted an extreme and illegal state law attempting to frustrate federal policy. The Justice Department should not have to spend valuable time and resources to file this suit today, but we have a duty to defend the prerogatives of the federal government and protect our Constitutional order. We will do so with vigor. We are confident that we will prevail in this case—because the facts are on our side."

You might be shocked to learn that no, the facts are most assuredly not on the Trump administration's side, here.

The DOJ's twelve page complaint (pdf) leans heavily on the state-preemption language, insisting that FCC authority preempts any state authority over broadband. As a result, the DOJ argues, states can do nothing but stare dumbly at the problem as the FCC abdicates its authority over broadband consumer protection at the direct behest of lumbering telecom monopolies:

"...the 2018 Order expressly “preempt[s] any state or local measure that would effectively impose rules or requirements that [it] ha[s] repealed or decided to refrain from imposing in this order or that would impose more stringent requirements for any aspect of broadband service that [it] address[es] in this order." This includes “any so-called ‘economic’ or ‘public utility-type’ regulations, including common-carriage requirements akin to those found in Title II of the Act and its implementing rules, as well as any other rules or requirements that [the FCC] repeal[ed] or refrain[ed] from imposing” in the 2018 Order."

Here's the ironic bit. Legal experts like Ernesto Falcon at the EFF and Stanford Law Professor Barbara Van Schewick have long noted that when the FCC obliterated its authority over ISPs and net neutrality (by rolling back their classification of ISPs as Title II common carriers under the Telecom Act), it also ironically obliterated its authority to tell states what to do. Shorter version: an agency that has abdicated its regulatory authority can't then go and try to utilize this now nonexistent authority to dictate state consumer protection efforts.

Short version: the FCC was a little too clever by half, and managed to shoot itself in the foot. ISPs like Charter Spectrum have already tried to use the FCC's preemption language to tap dance out of a New York State lawsuit over terrible service and slow speeds, but the courts so far have shot these efforts down.

The central argument the DOJ is attempting to make in its complaint is that the looming DC Circuit case should should be settled and the FCC's preemption language deemed lawful before California's law can take effect. You'll recall that 23 State Attorneys General sued the FCC claiming it ignored the facts and the public interest in the rushed repeal. Given all of the bizarre nonsense Ajit Pai's FCC was up to during the repeal (making up DDOS attacks, ignoring identity theft and fraud during the comment period), the FCC has a not-insubstantial risk of losing that case and having the original 2015 rules restored.

Knowing that pesky state laws could disrupt the telecom industry's master plan as we all wait for that trial's outcome, the DOJ is trying to buy some time. And while it's certainly possible that the DOJ could nab a sympathetic Judge that's willing to ignore logic, the facts really aren't on the ISPs' side, here.

There's multiple levels of grotesque going on. One, you might recall that Ajit Pai has routinely proclaimed his adoration of "state rights" when states are busy passing terrible protectionist legislation hamstringing broadband competition. You'll notice that this breathless concern over state rights has suddenly gone completely missing when states actually (gasp) try to protect consumers from predatory natural monopolies like Comcast.

Two, the DOJ is literally using taxpayer funds to give California voters the middle finger, trample state rights, and ensure that telecom monopolies with two-decades of anti-competitive behavior under their belts can rip off captive, disgruntled customers. Whatever you feel about net neutrality rules, the reality is that it's what the bipartisan majority of Americans wants. Yet here we are, making repeatedly sure that not only are their voices stifled and distorted, but that their votes don't matter. If you ever doubted the telecom lobby's influence on policy, this little stage play should put that to rest very quickly.

The irony here remains that the FCC's net neutrality rules weren't even very onerous in the first place. The FCC used forbearance to avoid any real rate regulation, while also providing giant loopholes on stuff like zero rating. All told, they were pretty modest protections by international standards. But because some monopoly companies nobody likes couldn't deal with even modest oversight, they've set off a chain reaction that has now created years of litigation and numerous fractured state-level efforts to protect consumers.

As you watch giant ISPs and the politicians who love them lament the rise of "multiple, onerous and discordant" state level protections, it's important to remember that this is entirely their creation. Verizon sued to overturn the FCC's 2010 rules, despite the fact that AT&T and Comcast thought those rules were acceptable. That prompted the FCC to craft tougher rules that could be supported in court, which ISPs then sued over yet again. The reality is they're not interested in any meaningful rules that hamper their ability to abuse the broken broadband market, and all else is pretense.

Again, people tend to get fixated on net neutrality "dying" or being "restored" via the passage of net neutrality protections. But the reality is the quest for net neutrality persists so long as the lack of underlying broadband competition continues to exist. And since the same folks trying to kill net neutrality have also made it clear they have zero interest in policy that addresses this lack of competition, this is an idiotic cycle of dysfunction we'll likely be stuck in for some time. At least until America realizes that letting potent and growing monopolies like Comcast dictate federal tech policy is utterly idiotic and patently self-destructive.

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Filed Under: ajit pai, california, doj, fcc, net neutrality, states rights

41 Comments

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Anonymous Anonymous Coward (profile), 1 Oct 2018 @ 10:23am

Can you hear us now?
Vigorous hand waving is the way to go. Utter many 'but's' and explain that "what we meant to say was..."

They faked right, turned left, screwed the public, got tackled anyway and now expect the instant replay (that is broken) to clear up the issue.

Maybe they should not have let the industry players write the rules they eventually passed. Or maybe they should have had someone with some intelligence read them first, someone who did not wear the industry bought and paid for blinders.

Now we will see if the courts have any integrity left. I suspect that at some point some court is going to say someone with vested interests just don't have standing.
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Mononymous Tim (profile), 1 Oct 2018 @ 11:03am

Nothing like the federal government saying "How dare you interfere with our plan to screw over the American public!"
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Anonymous Coward, 1 Oct 2018 @ 11:09am

Title II subsidies
So if the FCC has given up on Title II, what happens to all those title II subsidies Verizon was claiming?
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Anonymous Anonymous Coward (profile), 1 Oct 2018 @ 11:22am

Re: Title II subsidies
Catch 22 loopholes, doncha know. They get paid anyway. You don't think they take the money they spend on regulatory capture out of profits, do you?
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Anonymous Coward, 1 Oct 2018 @ 11:23am

Re: Title II subsidies
Same result as all of the city and county level business growth subsidies/tax breaks under the promise of hiring X number of jobs that never happens: Nothing changes. The companies get to keep the money.

Why take money away from the company that feeds you lots of lobbying money?
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ECA (profile), 1 Oct 2018 @ 11:27am

This comes down to the Last mile..
The LAST mile is intrastate and has little to do with Interstate..as it is.
IF, you can keep the PHONE services away and separate from the other services these CORPS OWN..
MOST of the deals that have been created were Intrastate..Inter-city..

taking this away from the FCC protections in the Fed, leaves them open to ALLOT of States COMPLIANCE'S.. which change state to state, and if STATE Phone restrictions are implemented..this is going to be a BIG WAR..
Use the STATE laws for phone services and Regulate them on ALL of those OWNED services from these corps..

THEn lets add, there are PRIVATE phone systems out there.. And they are LOCAL OWNED..
If the CORPS dont install connections, THEY CANT CONTROL WHO INSTALLS ANYTHING..
(WHICH WAS, part of the Franchise DEALS the corps made with the states, THAT NO ONE CAN INSTALL ANYTHING EXCEPT THE CORP)
Which brings us to Failure to fulfill contracts..
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ECA (profile), 1 Oct 2018 @ 11:28am

Re: This comes down to the Last mile..
Starting to wonder if PAI, gave us a backdoor into the Gov. and STATES taking over the WHOLE system..
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Anonymous Coward, 1 Oct 2018 @ 11:32am

GOP running for office vs GOP in office
GOP running for office: Debt bad! States rights! We don't need the federal gubmnt for nothing! All feds should be fired! Only states should have power! Our debt is too high! The Current people in charge just want to waste all of your money! I will only accept balanced budget proposals! Every Penny that passes by my desk must mean a penny cut from something else!

GOP in office: TAKE ALL OF THE MONEY! Who cares about debt? Just promise you won't give it to the poor people. They don't deserve money. Also - Fuck your state, do what I say. The federal government rules all.

Rinse. Lather. Repeat. Every. Single. Election.
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Anonymous Coward, 1 Oct 2018 @ 11:34am

Re: GOP running for office vs GOP in office
Cant edit, but meant to add: Same thing for Dems honestly.
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Anonymous Coward, 1 Oct 2018 @ 11:45am

Re: Re: GOP running for office vs GOP in office
"Both sides"-ism is not honesty.
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Jeremy Lyman (profile), 1 Oct 2018 @ 11:45am

A State Of Constant Uncertainty
This FCC seems like a child who's through playing with a toy and has cast it aside, yet when someone shows interest in it they "were still using it!!!" even when they've clearly stated otherwise. They don't want it, but they don't want anyone else using it either.

It's also an interesting argument that the State can't step in to fill the void until the courts resolve whether the FCC's abdication was legitimate in the first place. Is that how these policies usually go into effect, void AND in-place until overturned by a court?

If ISPs are operating as if the FCC has no mandate over them, then the State should also be able to operate similarly. At least until the courts replace that mandate.
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Anonymous Coward, 1 Oct 2018 @ 12:19pm

Elections have consequences!

You may not like the Democrats, I don’t, but you can be almos 100% certain they would not have made the sequence of decisions that resulted in this mess.

A lot of people see the two parties as the same, and in too many ways, they do have some of the same problems. But, they are not the same, not in everything.

Remember that in.the very near future.
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Anonymous Coward, 1 Oct 2018 @ 12:20pm

Re: Re: Title II subsidies
Similar to Wisconsin's give away to that Chinese corporation.
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ShadowNinja (profile), 1 Oct 2018 @ 12:28pm

As you watch giant ISPs and the politicians who love them lament the rise of "multiple, onerous and discordant" state level protections, it's important to remember that this is entirely their creation. Verizon sued to overturn the FCC's 2010 rules, despite the fact that AT&T and Comcast thought those rules were acceptable. That prompted the FCC to craft tougher rules that could be supported in court, which ISPs then sued over yet again.

Wouldn't be the first time the giant near monopoly corporations screwed themselves over out of short term greed.

Read up on the gilded age, when corporations and super rich individuals worth over $600 BILLION in today's dollars ruled the country. They tried to get rid of Theodore Roosevelt, the trouble maker who opposed their monopolies, by making him vice president, since it was traditionally a dead end job at the time. Only for the president to die, and Theodore Roosevelt to then be able to break up all the monopolies and destroy their political power.

The ISP's are eventually going to suffer the same kind of fate on net neutrality the more they fight popular regulation.
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Anonymous Coward, 1 Oct 2018 @ 12:32pm

Re: Re: Title II subsidies
What about future buildouts (assuming they happen)? Do they still claim "title II" to get that money, or is there a replacement program already?
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Coyne Tibbets (profile), 1 Oct 2018 @ 12:53pm

Re: GOP running for office vs GOP in office
The GOP depends upon people who watch political ads with wide-eyed credulous adoration.
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Anonymous Coward, 1 Oct 2018 @ 1:22pm

"The DOJ's New Net Neutrality Lawsuit Is A Giant Middle Finger To State Rights, Consumers, Competition & The Democratic Process"

Duh.

However, this particular "right" is unclear on many levels whether the States ever held that particular "right" to begin with, as there's a very compelling argument that data traffic on the Internet is fundamentally a interstate commerce clause question which is not subject to state oversight unless Congress allows it. This was the reasoning behind regulating telecommunications at the federal level to begin with. Just because the federal government has refused to create a regulatory regime, or changed it, doesn't mean the States then have the "right" to step in to do so.

It's very likely a federal court is going to see the same issue with state laws like this. It's one thing to try to say "we won't sign a contract with you if you do X", that's basic contract law and traditionally a State matter. It's quite another to statutorily say "Your company is not allowed to do this this and that" in regards to matters the Federal government has preemptive powers over like interstate commerce when they have actually been exercising that power.

No. The proper forum for addressing this is in Congress, not the State legislatures. Just because the current Congress is hostile to an issue, doesn't mean States have legal license to do an end run around Congressional authority. We aren't a democracy. We're a republic with some democratic frameworks built in/bolted on. There's a difference.

The funny thing though, if you look at it, this is still American style republicanism/democracy in action. Basically the voters got exactly what they asked for with a Republican/populist lead government. Sit on it and rotate chumps. It's your own damned fault for electing the bastards.
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That One Guy (profile), 1 Oct 2018 @ 2:32pm

Re: Title II subsidies
Oh they'll still get those, they'll still get all of those, because obviously they fall under Title II when it comes to getting money, just not when it comes to anything that might create limits on their actions and therefore prevent them from getting all the money they want.
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Anonymous Coward, 1 Oct 2018 @ 3:30pm

Re:
The last two sentences notwithstanding, this is the most insightful articulation of the issue I have read here. In legal speak the terms that come to mind are “federalism” and “dormant commerce clause”.
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Anonymous Coward, 1 Oct 2018 @ 4:19pm

Re: Re: GOP running for office vs GOP in office
It's amazing how much bullshit some folk will believe.
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Anonymous Coward, 1 Oct 2018 @ 4:24pm

Re:
"unclear on many levels whether the States ever held that particular "right" to begin with,"

What about the tenth amendment?

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
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Anonymous Coward, 1 Oct 2018 @ 4:38pm

Re: Re: Re: GOP running for office vs GOP in office
Yah my bad. I did not mean "both side-ism" on an equal playing field. The GOP are uncaring monsters who are made up of all the worst parts of humanity. The Dems (generally) seem to actually care for a brighter future for the country. Not on the same playing field. One is a group of monsters and one is a group of idealists. Can't compare them.

I meant in my "same thing for Dems honestly" to be more "Dems also like to make promises during campaigns that they know they will never achieve or immediately ignore once in office". All politicians do. I should have been clearer in my comment.
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Anonymous Coward, 1 Oct 2018 @ 5:53pm

Re: Re: Re: Re: GOP running for office vs GOP in office
Fair.
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Anonymous Coward, 1 Oct 2018 @ 6:13pm

Re: Re: This comes down to the Last mile..
Fuck you pai!!!!!
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Uriel-238 (profile), 1 Oct 2018 @ 7:23pm

I suspect they're hoping for a Federalist-ized SCOTUS
Once Kavanaugh is in place, the Supreme Court will have five jurists who've been conditioned to opine according to the Federalist Society line, which means Corporations rule, peasants drool.

So it may be that Sessions is banking that he'll be able to drive this up to the supreme court which -- by then -- should be controlled by our anti-libcuck overlords.
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Anonymous Coward, 1 Oct 2018 @ 7:36pm

I'm sure Google will spare some money and lawyers to help California. After all, this may further their control of the Internet. [end sarcasm]
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Anonymous Coward, 1 Oct 2018 @ 7:53pm

Re:
I can think of the beginnings of a counter-argument to the Commerce Clause argument.

Data traffic is not, in and of itself, interstate commerce. That the 1s and 0s travel across state lines does not invalidate a state's ability to control the traffic.

I find it exceptionally unlikely that a person under prosecution for the commission of an online act illegal in one particular state but not another would succeed in a claim of "There's no federal law preventing it! Commerce Clause!"

Any state can say, "If you want to do business in our state, you need to follow our rules." That's not going to magically disappear because whatever good or service being requested happens to originate from another state.

Also, as a side observation: if the Commerce Clause would negate a state's attempt to apply its laws to online activity from out of state, wouldn't that invalidate things like someone from Massachusetts claiming defamation over a blog post from someone in California?
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Anonymous Coward, 1 Oct 2018 @ 11:35pm

Hang on a moment...
...Shouldn't the FCC be taking this up with the FTC?
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Anonymous Coward, 1 Oct 2018 @ 11:47pm

The aim being to try to back up bullshiter Pai so he can continue to back up the businesses that he has done everything possible for while doing absolutely nothing for the people!
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Anonymous Coward, 2 Oct 2018 @ 2:40am

'Nother Irony
If Cali wins and clears the way for the other 49 states, an even sweeter karma arises...the standards for net neutrality will soon come in 50 flavors of varying fat content, instead of one light, federal version.
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Wendy Cockcroft, 2 Oct 2018 @ 5:54am

Re: I suspect they're hoping for a Federalist-ized SCOTUS
I can see that. When an outright liar has supporters like David French because he's Lying For The Cause you can forget about anything like decency and integrity getting a look-in.
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DNY (profile), 2 Oct 2018 @ 6:03am

Irony (in the classial, not hipster sense)
A Southerner is leading the charge against states rights!
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Anonymous Coward, 2 Oct 2018 @ 7:00am

So to make sure I understand the DOJ's position:
California can't enact this law because the FCC law abdicating their responsiblity isn't settled. Should it be settled against the FCC then poof the "we have no authority" claim is gone making this case meaningless. Should the FCC win then the case should be allowed to proceed because they really did abdicate.
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theOtherDude, 2 Oct 2018 @ 7:37am

Thats what you get
Welcome to total Republican rule - big government as a tool for big business is their fundamental ideal, its really the only core principle the republican party has left.
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Uriel-238 (profile), 2 Oct 2018 @ 10:36am

Republican rule
Think of big corporations and plutocrats as the new aristocracy and it starts to look like classic feudalism.

The only problem is the Democratic Party has been pro-corporate as well, leaving the public with no good options to vote for.
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ECA (profile), 2 Oct 2018 @ 11:10am

Re: GOP running for office vs GOP in office
In all of this there is a big problem..
EVEN IF'
the 2 big groups make SUB groups to weed out the strange and weird..(Nazi green party)
Those smaller groups figure something out(eventually).
that to get any acknowledgment OR MONEY to run their OWN people, they have to JOIN UP with 1 of those 2 groups..

those 2 groups have 1 BIG problem..How many people they have. So they Gather MORE ODDBALL GROUPS under their wing.. Which gives them abit more Voting power.

THEN there is the idea of a CORPORATION as a human..and that All those in that corp/company have the Voting power of ALL those working there..

the voting power of the 2 groups is only about 33%..and in most states that number is the same.. and running 3+ candidates, means THOSE 2 parties HAVE the election.
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ECA (profile), 2 Oct 2018 @ 11:10am

Re: Re: GOP running for office vs GOP in office
I just want 1 thing...
Of those running for an office, I would prefer a Button that says...
"NONE OF THE ABOVE"
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Bob C. (profile), 3 Oct 2018 @ 1:07am

Re: I suspect they're hoping for a Federalist-ized SCOTUS
The California case may end up in the SC. Kavanaugh has made it very clear that he doesn't believe in the principal of Net Neutrality, so even if you are willing to write off his other affairs as youthful indiscretions, this is a very important reason to strongly object to his appointment.

If you are represented by Republicans in Congress, there are only a couples of days left to make that clear to them.
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Anonymous Coward, 3 Oct 2018 @ 3:29am

Re: Re: I suspect they're hoping for a Federalist-ized SCOTUS
Kavanaugh said no such thing about NN. What he did say was that NN rules were subject to certain limitations because of Separation of Powers and First Amendment principles, and that in the pertinent cases those limitations had not been met. To suggest he is hostile to NN as a matter of policy is plainly wrong. His hostility, if any, is to federal rule making that he believes infringes upon congressional power under Article 1 and the text of the Constitution itself. IOW, he exhibits a strong deference to judicial precedent.
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ECA (profile), 3 Oct 2018 @ 12:10pm

Re:
AC..
Part of this problem is HOw the USa runs around building OTHER democracies..but how many democracies have ONLY 2 parties..
NONE.

when each of the sides PICK a choice to run, or BACK for an office...WHO decides?? NOT US. And mostly its Money and Corp backing that decides.

For all the money we have in our pockets and PAY for goods...MOST of it ends up paying for OTHER THINGS..Like politics. AS WELL, as the Gov. itself supplementing, BOTH SIDE(if you didnt know)
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Uriel-238 (profile), 3 Oct 2018 @ 12:44pm

The Failure of US Democracy
Prof. Larry Lessig explains the subversion of democracy in the US pretty well at one of his TED lectures.

The thing is, since those in power benefit from our elections and party system not being reformed it's impossible to reform it from within the system.
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