Sides Debate Size of Challenge FCC Faces in Seeking to Reverse 2015 Net Neutrality Order
Opponents of the pending net neutrality NPRM say the FCC could face a tough time in court making the case that the agency needs to move again, two years after imposing rules reclassifying broadband as a Communications Act Title II service. Meanwhile, the FCC continues to be inundated with net neutrality comments, posting more than 780,000 on its filing system Friday and Monday. But the Electronic Comment Filing System was functioning throughout the day Monday, after experiencing widespread problems last week (see 1705120052).
Free Press released a report Monday that counters arguments that Title II is bad for business. The report found that aggregate capital investments at publicly traded ISPs were 5 percent higher during the two-year period following commissioners' 2015 vote than in the previous two years. Capital investments by 16 of the 24 publicly traded ISPs were up and cable-industry physical network investments increased 48 percent. The FCC is relying on “manipulated data from ISP-funded analysts” to make the case for lower investment calculations, Free Press said.
The FCC and Chairman Ajit Pai will have a “really, really tough row to hoe” showing the need to re-reclassify broadband as a Title I information service rather than as a Title II common-carrier service, said Gigi Sohn, a top lieutenant to then-Chairman Tom Wheeler. The FCC likely will focus on bundling and competition, she said. “What we showed in 2014 was that consumers didn’t think they were buying a bundle of communications services and transport,” Sohn said. “They thought they were paying for transport. They thought they were paying for a pipe. Increasingly, people were getting their webmail from someplace else. They were getting their [domain name servers] from someplace else.”
"There's a lot of debate about open internet policies -- meaning whether net neutrality rules are necessary, whether Title II harms investment, or whether the ISPs are monopolies,” said Free Press Policy Counsel Matt Wood. “These are all interesting and relevant questions, but none of them speak to the legal classification.” Wood said the Free Press report tells a different story from that told by FCC Republicans. "Pai is confused about a lot of things,” Wood said. “He's either woefully misinformed, lying through his teeth, or a little bit of both when it comes to his claims about ISP capital expenditures under Title II.” The FCC didn't comment.
USTelecom slammed the Free Press report, saying the group’s capital investment figures "suffer from a number of analytical flaws that create a false and misleading impression of U.S. broadband investment." Counting investments in Mexico and Sprint’s consumer phone leasing program "are improper since they don’t represent improvements in or expansions of U.S. networks," the group emailed: It's not "a fair reflection of what’s happening.”
FCC Case
The draft NPRM anticipates arguments supporters of the 2015 order are likely to make and starts with an economic argument for changing classification. “The Commission’s Title II Order has put at risk online investment and innovation, threatening the very open Internet it purported to preserve,” the draft argues. “Investment in broadband networks declined.”
The NPRM would explain why, based on the history of the communications acts, Title I classification is a better fit for internet access service. “For two decades, a consistent bipartisan framework supported a free and open Internet,” the draft in docket 17-108 asserts. That consensus led to six decisions confirming that internet access service is an information service, subject to Title I, the draft said. The draft offers justifications for changing course two years after the agency approved the last rules. An agency “is free to change its approach to interpreting and implementing a statute so long as it acknowledges that it is doing so and justifies the new approach,” the draft asserts.
The arguments over the revised order, when it's ultimately appealed, will center on Chevron doctrine, emailed Gus Hurwitz, co-director of the Space, Cyber and Telecom Law Program at the University of Nebraska College of Law. “The same principles of deference that allowed the Wheeler FCC to reclassify Internet access will likely make it easy for the Pai FCC to de-reclassify. In fact, it will likely be easier to undo what Wheeler did, because there are fewer reliance interests to contend with and there is substantive data that the commission can point to.” Litigation "is going to be all about Chevron and related principles of deference.” Hurwitz said.
“The Supreme Court clarified in the Fox Television case that when an agency reinterprets a prior decision, it is reviewed under the same standard as its original decision,” said Daniel Lyons, associate professor at Boston College Law School. “It may need to explain why it no longer believes now what it believed then. But the NPRM rehearses some of those arguments, which are likely sufficient to overcome the relevant standard of review.”
The NPRM refers to Fox, handed down while he served on the commission, said former Commissioner Robert McDowell, now at Cooley and Mobile Future. “That case says that the commission is free to change its interpretation and implementation of a statute so long as it acknowledges what it is doing and thoroughly explains and justifies its new approach. In this case, the commission merely has to explain why the status quo ante is preferable. The NPRM tees this issue up well.”
Under the Brand X decision, “the FCC at least clearly has the discretion to go down from Title II to Title I,” said Berin Szoka, president of TechFreedom. “There's really no reason to think the FCC would lose here.”
Bad Bet
Supporters of the 2015 rules argue that Pai faces an “uphill legal battle,” said Doug Brake, senior telecom policy analyst at the Information Technology and Innovation Foundation. “This is a bad bet in my opinion. I doubt it will be difficult to return to what the Supreme Court has already OK'd.” The FCC need only find that the 2015 commission “read the record wrong and under-appreciated the importance of DNS and caching,” Brake said. Case law makes clear “the FCC need not rely on changed facts or circumstances when changing policy, only that they have a reasonable explanation for disregarding factual findings that underlay prior policy,” he said.
“The FCC has a strong legal argument, aside from reliance on Chevron deference, that the agency doesn’t possess authority ... to classify internet access providers as Title II,” said Randolph May, president of the Free State Foundation. “Internet access service, as currently offered by the ISPs, fits within the definition of ‘information services’ in the statute. And, as the rulemaking notice points out, the information services definition speaks of the ‘capability’ for performing certain information processing functions.”
Pai used humor to fight against net neutrality protesters, reading some of the comments in a video posted on YouTube tweeted by the FCC Monday. “Ajit Pai go back to Africa were you came from,” said one of the tweets. “Do you even English, bro?” Another tweet said Pai should be put on trial for crimes against the people and sent to the guillotine. “You’re not going to catch me if I’m back in Africa, are you?” Pai joked. Another tweet asked why Pai hates America. “Why do I hate America?” Pai joked. “Skinny jeans, kale, the Raiders. … what more evidence do you need?”
HBO comedian John Oliver, meanwhile, asked viewers to tone down their comments to the FCC, after he urged them to file last week (see 1704110044). Oliver, in a web exclusive, said racist comments are wrong. "If any of those came from anyone who watches this show, stop it!" he said, also lobbing a jab at President Donald Trump. "Writing racist things on the internet is not how you win the net neutrality debate. It's how you win the presidency."