(This is true, in fact, and the court cases it cites and the DC circuit have been clear on this point for years)
The order then reclassifies the ISP's outside of Title II.
Outside of the arguments around privacy jurisdiction (which were always dual jurisdiction with the FTC), i don't know what they are thinking.
Given that the courts have already decided the FCC has no authority to regulate in this space (outside of Title II), and Ajit himself has said it numerous times, arguing pre-emption seems like a loser. If they don't have the authority to regulate around it, it's hard to see how they will argue they have the right to pre-empt others: all the court rulings involve determinations about the scope of the statutes involved, which in turn is a valuation of what congress intended to regulate/how far pre-emption goes.
It'll be interesting to read the complaint to see what leg they are trying to stand on.
Besides the existing court cases making super-clear the lack of authority, just the sheer the number of statements and orders from Ajit saying the FCC has no authority here seems like it will be hard for the FCC to overcome.
They would have been much better off saying "we have plenty of authority here and we explicitly choose not to exercise it"