Telco-Cable Line of Attack Against Title II a 'Hail Mary,' Opposing Attorney Says

SAN FRANCISCO -- Petitioners challenging the net neutrality order threw a “Hail Mary” in arguing the FCC was statutorily precluded from reclassifying broadband access as a Title II telecom service under the Communications Act, said Steptoe and Johnson attorney Markham Erickson. He represents Incompas (formerly Comptel), Level 3 and Netflix in defending the order. Erickson spoke at a Davis Wright net neutrality seminar Wednesday after the Comptel Plus conference.

Erickson noted telco and cable petitioners had other arguments and he didn't predict the case's outcome, but he suggested petitioners were handicapped in one of their main lines of attack against the current order by their previous arguments in earlier broadband classification cases. When the FCC declared over a decade ago that broadband services were Title I information services, cable and telco parties defended the decisions as reasonable interpretations of the statute deserving court deference, he said. The industry parties didn't argue the commission was statutorily obligated to find the broadband services were Title I services, he said. Despite that, Erickson said, the telco-cable petitioners are now arguing that the FCC was precluded from Title II broadband reclassification because the statute requires a Title I finding, which represents a shift in position.

The courts upheld the FCC's previous Title I broadband classifications, with the Supreme Court's majority in the 2005 Brand X ruling deferring to the agency's cable broadband modem classification as a reasonable interpretation of an ambiguous statute (the dissent argued it was a Title II service). Davis Wright attorney Peter Karanja, whose firm isn't involved in the current case at the U.S. Court of Appeals for the D.C. Circuit (USTelecom v. FCC), said the fight is over how broadly Brand X should be read. The FCC argues Brand X is controlling this time around on the threshold issue of the agency's discretion to interpret an ambiguous law, and thus it can reclassify broadband under Title II as long as it justifies the decision as a reasonable determination, he said.

But Karanja said petitioners argue Brand X was about "last-mile" broadband service, not about “broadband Internet access service,” which they say could extend the commission's jurisdictional reach throughout the Internet, given the nature of the service. The petitioners are “trying to cabin Brand X” into a narrow ruling, he said. But Erickson said Brand X never mentioned the “last mile” and he suggested the petitioner argument would be a tough sell.

Karanja and Erickson said the FCC was asserting Title II jurisdiction over broadband Internet access provider interconnection arrangements for exchanging Internet traffic with other parties, including edge providers such as Google or Netflix. The commission didn't craft rules for such interconnection, but said interconnecting parties could file complaints under Title II standards, Erickson said.

Neither Karanja or Erickson opined much on First Amendment arguments against the FCC order. Both noted that the telco/cable petitioners declined to make it, leaving Alamo Broadband, a small ISP, to make the argument the order violated broadband provider speech rights.

Karanja said major business and industry groups, among others, backed the telco-cable petitioner case: the Business Roundtable, National Association of Manufacturers and the U.S. Chamber of Commerce. He said the Chamber of Commerce had a particularly good record of being on the winning side in Supreme Court cases. On the other hand, Karanja said Full Service Network challenged the FCC order for forbearing from applying most Title II regulation to broadband ISPs. The fact that it's being attacked from both sides -- as being too regulatory and too deregulatory -- might be helpful to the commission's case that its decision struck a reasonable balance, he said.

Karanja said he didn't want to predict the case's outcome in part because the identity of the three-judge D.C. Circuit panel isn't known. But he said he wouldn't be surprised to see Judge David Tatel on the panel, given that he authored the court's previous two net neutrality rulings as well as a related data-roaming ruling. He said he believed the FCC wouldn't be unhappy if Tatel is on the panel. There are also three new Obama appointees on the D.C. Circuit, he noted; and President Barack Obama encouraged the FCC net neutrality and broadband reclassification decision. On the other hand, Karanja said the Supreme Court has recently sometimes voiced increased skepticism about giving regulatory agencies broad deference.