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ISPs Appeal Net Neutrality Order to Supreme Court

Posted by Andrew Regitsky

Oct 6, 2017 10:00:00 AM

NetNeutrality_gavelAs we enter the baseball playoffs, ISPs are covering all their bases in their efforts to overturn the FCC's 2015 Open Internet (Net Neutrality) Order. On September 28, 2017, AT&T, USTelecom and CenturyLink filed petitions with the U.S. Supreme Court, requesting the High Court to overturn the decisions of the DC Circuit Appeals in which a panel of judges supported the 2015 Open Internet Order and then refused to let the case be reheard by the entire Court. In legal terms, the Petitioners filed a "Writ of Certiorari."

The filings came as somewhat of a surprise since the current FCC is poised to overturn the 2015 Order on its own. Moreover, the Supreme Court is less likely to accept the case precisely because it is aware that an FCC decision is pending. The Petitioners are obviously aware of this but as USTelecom notes:

If the FCC issues new regulations returning broadband Internet access service to its proper classification, petitioners will file a supplemental brief explaining why the Court should grant the petition and vacate the D.C. Circuit’s opinion on mootness principles.” If the agency does not reverse its position or fails to act in a reasonable amount of time, USTelecom urges the Court to grant the petition and set a date for arguments.  (USTelecom and CenturyLink Petition for a Writ of Certiorari at p. 3).

If the FCC issues new regulations returning broadband Internet access service to its proper classification, petitioners will file a supplemental brief explaining why the Court should grant the petition and vacate the D.C. Circuit’s opinion on mootness principles.” If the agency does not reverse its position or fails to act in a reasonable amount of time, USTelecom urges the Court to grant the petition and set a date for arguments.  (USTelecom and CenturyLink Petition for a Writ of Certiorari at p. 3).

In their filings, the Petitioners continue to argue that the FCC, ignoring years of contrary decisions bowed to President Obama's political pressure and improperly classified both fixed and mobile broadband as common carriers subject to onerous Title II regulation. Then the FCC went even further, determining it had the power to regulate all possible future Internet services or products on a case-by-case basis, ensuring it would forever have total control over the Internet.

That Order came as a shock to ISPs, especially since when it rejected the FCC's previous Net Neutrality Order in 2014, the DC Circuit laid out a blueprint for the FCC to follow to enable it to lawfully regulate the Internet. That blueprint would have essentially allowed the FCC to regulate ISPs under the advanced services section of the Telecommuncations Act (section 706), while maintaining the classification of ISPs as information service providers. However, as AT&T states, many consumer advocates were not happy with the blueprint.

That move angered regulatory activists who wished to use the D.C. Circuit’s decision as a pretext for subjecting broadband providers not only to core net neutrality rules, but also to full-blown public utility regulation. Working behind the scenes, those activists persuaded the President to issue an extraordinary statement pressuring the FCC—an independent agency— “to reclassify Internet service under Title II of a law known as the Telecommunications Act.” By a 3-2 vote, the FCC bowed to this political pressure, abandoned nearly two decades of bipartisan consensus, and classified Internet access for the first time as a telecommunications service subject to common carrier regulation. Invoking Title II, the FCC’s Title II Order subjected broadband providers not only to certain “bright-line” prohibitions, but also to an amorphous case-by-case ban on “unreasonable” conduct not captured by those prohibitions. (AT&T Petition for a Writ of Certiorari, at p. 10).

The ISPs explain to the Supreme Court that the DC Circuit supported the FCC based on an erroneous reading of the Supreme Court's so-called "Brand X" decision. Brand X was an ISP that appealed the FCC's 2002 decision to classify cable modem Internet service as an information service. Brand X appealed that decision to the Supreme Court by claiming that cable Internet service actually comprises a bundle of two services: an information service not subject to the Commission’s regulation and a telecommunications service subject to mandatory Title II regulation. In its decision, the Supreme Court acknowledged that cable Internet service does contain a telecommunications component. However, it deferred to the Commission’s determination that this component is functionally integrated into a single information service offering.

In finding for the FCC in 2015, the DC Circuit concluded that the Brand X case established that the Telecommunications Act was deliberately ambiguous with respect to the proper classification of broadband. Therefore, the Commission was free to regulate broadband service as either an information service or a telecommunications service.  However, as the ISPs argue, this makes little sense:

That holding turns Brand X on its head. To the extent that Brand X perceived any ambiguity in this statutory scheme, it affirmed the FCC’s discretion only to decide whether a broadband ISP can be said to “offer” consumers (1) only an information service (Internet access bundled with broadband transmission) or (2) both an information service (Internet access) and a separate telecommunications service connecting the end user to the ISP facilities (broadband transmission). But either way, Internet access itself is an information service exempt from common carrier regulation, and broadband Internet access service at least includes that information service. Nothing in Brand X even suggests that the FCC has discretion to conclude, as it did here, that Internet access itself is a telecommunications service subject to common carrier regulation. To the contrary, all nine Justices decided the case on the premise that the statutory language forecloses that conclusion—as indeed it does. (id., at p. 12).

As we have previously argued, we support the classification of broadband Internet access service as a Title I information service. Therefore, we believe that either the FCC, High Court or Congress will overturn the 2015 Open Internet Order. Until the current FCC came along, we believed that ISPs would eventually and appropriately be regulated by the Commission under section 706.  However, this FCC has made it clear that it has no intention of regulating the Internet at all. Therefore, we fear for what comes next, since with its lack of experience, the Federal Trade Commission, which would regulate ISPs as information services providers in an FCC vacuum, is ill-equipped to regulate the Internet.  

By Andy Regitsky, CCMI

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Topics: regulatory updates, FCC, Net Neutrality, Broadband, ISPs

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