Photo by Paul Frenzel
At the end of 2017, the FCC voted to eliminate its net neutrality rules, abdicating the Commission’s longstanding role as a bulwark against Internet service provider misbehavior. Contrary to what FCC Chairman Ajit Pai would have you believe, this isn’t a return to the way things were before 2015; rather, for the first time in decades, the FCC will no longer attempt to prevent ISPs from unilaterally blocking access to websites at their whim. This is certainly a grim outcome, but it is not the end of the debate. Pai’s authority to upend how the Internet functions is far from absolute. Federal courts and Congress have the right to reject what Pai has done, and net neutrality advocates will shift their focus to those bodies in the coming months. Restoring net neutrality will not be an easy task, but we at least know the path we’ll have to take to get there.
Legal Challenge
Just as the FCC’s 2015 net neutrality order was subject to a lawsuit from ISPs immediately after its publication, the FCC’s attempt to eliminate net neutrality rules will also face prompt legal challenges. Predicting the outcome of any appellate case dealing with complex questions of regulatory law is always difficult, but we at least have a good idea of the questions that will be at issue in the case.
Is The FCC’s Decision to Re-Reclassify Broadband Valid?
As an independent agency, the FCC has the power to create rules only to the extent that Congress gives it that power. The debate you may have heard about “Title I” vs. “Title II” is fundamentally about the extent of this delegated authority.
Ever since the Communications Act of 1934 first created the FCC, Congress has passed laws giving the FCC the authority to govern certain communications networks in different ways, depending on the nature of the communications network in question. Networks that involve the pure transmission of information (so-called “Title II” systems) are subject to greater FCC oversight than networks that involve the processing or manipulation of such information (so-called “Title I” systems). If it’s ambiguous as to whether a particular communications system — like, say, broadband Internet — is a pure transmissions network or an information processing network, the FCC gets to make the call. The FCC has changed its mind on this point multiple times, most recently when it reversed the 2015 Order’s Title II classification and defined broadband as a Title I service.
But, just as the FCC’s authority to regulate is constrained by other laws, so too is its authority to classify broadband service. The Supreme Court held in 2005 that the FCC’s initial decision to classify cable broadband service as a Title I information service was reasonable, though not necessarily the best interpretation of the law. Three of the Court’s justices held in dissent that broadband access can only be classified as a Title II service. The majority’s opinion that the Title I classification was reasonable was based in large part on the fact that ISPs provide all sorts of ancillary services to end users — such as a free email account — in addition to the straightforward capacity to connect to other computers over the Internet. In 2015, when the FCC reconsidered its Title I classification, it determined that the Internet market changed considerably over the past decade, and consumers no longer view broadband Internet access as anything more than just a way to connect to the broader Internet. The free email account that your ISP provides you isn’t enough to turn what is essentially a pure communications service into something more.
So, while the Supreme Court has already determined that the FCC can plausibly classify broadband access as a Title I service, it is possible that a new Supreme Court may determine that the Internet today is sufficiently different than the Internet was in 2005 that it is no longer reasonable for the FCC to treat the Internet as anything other than a pure transmission technology like phone service. It seems rather unlikely that the Court will end up overturning its 2005 ruling, but considering the newest member of the Supreme Court is notoriously opposed to giving agencies wide latitude to interpret statutes however they see fit, it is not necessarily a settled question that the FCC’s re-reclassification is appropriate.
Was the FCC’s Rulemaking Process Legally Sufficient?
Although the FCC’s rulemaking process this time around appeared to be something of a circus, there are requirements an agency must abide by for its rulemaking process to pass legal muster. The Administrative Procedure Act, like the name suggests, spells out the procedures an agency must follow. As per the Act, agencies are required to publicly share their proposed rules and must solicit public comments before voting on their plan. If a court determines that the rulemaking process was “arbitrary and capricious,” it can reject an agency’s rules. Under established case law, a court may find rules to be arbitrary and capricious if, among other things, the agency’s actions disrupted “substantial reliance interests” without due consideration. For example, if an industry had grown based on established expectations about the regulatory regime, an agency’s decision to reverse that regime must identify and address that industry’s concerns. Similarly, if an agency changes course in the face of established facts contradicting the new policy, it must provide a reasoned explanation for doing so.
The FCC’s process in this proceeding was, to put it charitably, imperfect. More accurately, it was a sham. At the outset of the rulemaking process, the FCC tried to discredit the public comments it received by claiming that a burst of public submissions at the opening of the comment period was actually a malicious distributed denial of service attack; when pressed for evidence of this attack, the FCC did nothing. Similarly, while more than 21 million comments poured into the FCC’s docket, a great many of them were fraudulent, using stolen identities to post form comments. Pai has pointed to these obviously fake comments to argue that he is justified in ignoring the overwhelming public opposition to his plan, even though studies have shown that virtually all of the non-automated, non-fraudulent comments supported strong net neutrality rules.
The order itself lacks adequate justification for its conclusions in too many ways to outline thoroughly here. In response to commenters pointing out logical or factual deficiencies in the FCC’s plan, Pai simply states that he doesn’t agree without providing any meaningful support for his conclusory dismissal. One glaring example of the deficiency of his reasoning relates to the rule’s obsession with the supposedly deleterious impact that the prior net neutrality regime had on broadband investment. Pai totally ignores the fact that cable company executives repeatedly and routinely told investors that the FCC’s 2015 order had absolutely no impact on their investment decisions, instead relying on bogus studies claiming that in just two years, net neutrality rules somehow caused ISPs to cancel billions of dollars worth of infrastructure investments. Even if this were true (it isn’t), it represents only one side of the equation. As we pointed out in our comments and in a letter signed by dozens of venture capitalists, investors poured billions of dollars into Internet-enabled startups in reliance on the FCC taking action against ISPs that tried to leverage their gatekeeper powers to distort competition. Nowhere in the FCC’s order is there any mention of the serious reliance interests of these investors and companies or the immense sums they poured into the Internet ecosystem with the expectation that the FCC would continue to enforce the strict, bright line anti-discrimination rules it has had on the books since 2010.
It is, of course, foolish to try to predict what courts will do when trying to apply ambiguous legal doctrines to complex facts. While the FCC’s rationale for killing net neutrality rules is wholly deficient, it’s not clear that a court will be willing to second guess an expert agency. There’s certainly a chance that a court — probably ultimately the Supreme Court — will determine that the FCC’s actions were legally improper, it’s far from a guarantee. As such, the question will almost certainly turn back to the body that’s ambiguous laws helped create this problem in the first place.
Legislative Action
The FCC’s action has predictably teed up another round of net neutrality discussions on the Hill, with lawmakers falling all over the spectrum, from attempting to overturn the repeal of the 2015 net neutrality rules, to codifying weak net neutrality protections that would fail to adequately protect Internet users and the online services they rely on.
Congress certainly has the power to firmly establish strong net neutrality rules and prevent the FCC from abandoning its job as the regulator of record for ISPs. Unfortunately, with its current makeup, Congress isn’t likely to pass meaningful net neutrality rules any time soon. More than 100 House Republicans signed a letter ahead of the FCC vote supporting Pai’s proposal and repeating Pai’s talking points about how the repeal of the 2015 rules “is a major step forward in the effort to clear the way for the substantial investment necessary to advance our Internet architecture for the next generation and close the digital divide.” One of the letter’s main authors — Rep. Marsha Blackburn, who leads the Energy and Commerce Subcommittee on Communications and Technology — has introduced a bill that would further hamstring the FCC’s ability to regulate ISPs and put in place rules that do little to prevent ISP discrimination.
Over in the Senate, Commerce Committee members, led by Chairman John Thune, are picking up where they left off during the last net neutrality debate. While the proposal they put forward two years ago is better than Blackburn’s plan, it is nowhere near as strong as the 2015 rules. Republicans, including Thune, introduced draft legislation in 2015 that may have sounded like a good proposal but actually left plenty of room for discriminatory behavior by ISPs. Some lawmakers are calling for a bipartisan legislative solution, but, as Sen. Brian Schatz — top Democrat on the Senate Commerce Subcommittee on Communications — recently said, “there is no indication that we are particularly close” to a bipartisan deal on net neutrality. Both Thune’s and Blackburn’s plans fail to thoroughly prevent ISPs from giving preferential treatment to Internet traffic originating from wealthy incumbents to the detriment of smaller players. Indeed, Blackburn’s plan does not prevent ISPs from entering into paid prioritization schemes at all. And, both plans would establish weak, loophole-ridden rules nominally meant to prevent blocking and throttling while at the same time preventing the FCC from tweaking the rules to deal with the loopholes ISPs will inevitably exploit. In principle, there’s nothing wrong with enshrining net neutrality rules in legislation, but in practice, we’re not going to get strong rules until Congress’s opinion on the matter more closely reflects the public’s strong support of net neutrality.
Democrats in Congress are planning to push a resolution under the Congressional Review Act that would undo the FCC’s net neutrality repeal. A CRA resolution bypasses some of the procedural hurdles in the Senate, making it an easy way for Democrats to force a vote. A CRA resolution would face an even greater uphill battle in the House and has even lower odds of being signed into law by President Donald Trump, it would force at least some lawmakers to take a recorded vote on reinstating strong net neutrality protections, an idea that’s supported by a majority of voters, including a majority of Republican voters.
In the end, assuming a court does not throw out Pai’s plan, the net neutrality debate will continue to drag out in Congress and perhaps even into another round of FCC rulemaking down the road. The best way to overturn what Pai has done and restore meaningful net neutrality rules is to make net neutrality an electoral issue and hold politicians accountable for favoring the interests of a few wealthy ISPs over the broader Internet ecosystem.
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