Net Neutrality Upheld as the Law of the Web
For net neutrality, the third time turned out to be the charm. An appeals court upheld a Federal Communications Commission order requiring broadband companies to treat all internet-based content providers the same -- after rejecting FCC efforts to achieve roughly the same result twice before in the last seven years.
The Obama administration has wanted to implement net neutrality since the beginning of its term, when the president appointed a Democratic majority to the commission.
Tuesday's decision raises two interrelated questions, one backward-looking and one forward-looking. What made this time different? And will the Supreme Court reconsider the case and possibly overturn the appellate court’s decision?
It would be awfully nice if the U.S. Court of Appeals for the D.C. Circuit had articulated a punchy, concise explanation of why this FCC action was lawful while the earlier two were not. Unfortunately, the court did no such thing.
One of the pleasures of my job is that I get to read appellate and Supreme Court opinions and pick out the most salient issues, the ones I think really decided the case. This time it was a little less pleasing to find the majority opinion in the case runs 115 pages. The dissent comes in at a relatively modest 69.
To say that the legal arguments on both sides are technical is to understate the situation considerably.
So let me cut to the chase, simplifying so you won’t hate me and paying special attention to what may have changed.
In 2010, the D.C. Circuit said that the FCC hadn’t provided statutory authority to explain why it could order the broadband company Comcast to comply with open-internet policies. Chastened, the FCC issued new net-neutrality orders based on authority drawn from the Telecommunications Act of 1996. The D.C. Circuit rejected that effort, too. It said that the FCC was in effect treating broadband service as a common carrier like a railroad. Yet the FCC had defined broadband as an information service – and the Communications Act of 1934 expressly prohibited regulating information services like common carriers.
The FCC went back to the drawing board. Under pressure from President Barack Obama himself, who publicly announced the course he thought the nominally independent FCC should take, the agency reclassified broadband as a telecommunications service rather than an information service. On that basis, it declared that it would regulate broadband services as common carriers.
The strongest argument against the new order was that the agency acted arbitrarily when it reclassified broadband as a telecommunications service rather than an information service.
The reply given by the FCC, and accepted by the court, was that between 2014 and now, the commission came to realize that broadband services really are more like telecommunication than information. End users don’t use Comcast or Verizon for their e-mail programs or other add-ons, but rather to access the rest of the internet.
In the only lyrical passage I could find in the 184 pages, the court offered a paean to third-party internet content, which it said “has transformed nearly every aspect of our lives, from profound actions like choosing a leader, building a career, and falling in love to more quotidian ones like hailing a cab and watching a movie.” (OK, so it’s not really all that lyrical.)
Under a basic principle of administrative law known as Chevron deference, the courts will defer to an administrative agency’s determination on the meaning of an ambiguous statute. In a 2005 case, the Supreme Court extended Chevron deference to the FCC’s determination that broadband cable modem companies were exempt from common carrier regulation, and said that consumer perception was the touchstone of classification. The D.C. Circuit said this precedent meant that it would extend the same deference to the FCC’s current determination that broadband service should be regulated as a common carrier.
In dissent, Judge Stephen Williams, a devotee of law and economics, argued that the FCC should have determined that broadband companies exercised market power before treating them as common carriers. Economically, this makes sense. But the Supreme Court never mentioned such a market power requirement in its 2005 decision, a serious strike against Williams’s view.
The major difference between the current net-neutrality regulation and those that came before seems to be that the D.C. Circuit believes that this time, the FCC offered an honest, aboveboard rationale for its regulation. Today, broadband really is akin to a railroad network or other utility-like entity (think phone lines before mobile) that we treat as a necessity of life. It’s not an information service, or at least not primarily. Obama, it turns out, was right to press for regulating broadband as a common carrier.
For that reason, it seems on balance that the Supreme Court probably won’t reconsider this issue.
True, there’s a dissent, which can sometimes signal the need for review. The vote breakdown is nominally partisan, with two Democratic appointees, Judge David Tatel and Sri Srinivasan, upholding the Democratic-majority FCC, and Republican-nominee Williams voting the other way. It’s also possible to frame net neutrality in partisan terms: pro-regulation Democrats favor it and free-market Republicans generally don’t.
But the key point is that the justices won’t have a major incentive to revisit a highly technical administrative issue on which the D.C. Circuit seems to have done its homework and put the FCC through its paces. The previous two D.C. Circuit decisions were bipartisan affairs, demonstrating that Democratic appointees weren’t prepared to let the Obama administration get away with just any type of net neutrality regulation.
To cap it all off, the court as currently configured lacks a decisive conservative majority. The four conservatives could get the case heard, but they can’t win alone. And if Donald Trump becomes president, his FCC could simply retract the regulatory order.
This may well be the definitive victory that net-neutrality activists have wanted all along.
It's conceivable that Justice Elena Kagan dealt with net neutrality while she was solicitor general from 2009 to 2010. But that was well before the current administrative order, so she shouldn't have to recuse herself.
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