By: Ryan Johnston
As many both in the Internet community and out are aware, December 14, 2017 marked the date that the Federal Communications Commission (FCC) repealed the net neutrality rules put in place by then Chairman Wheeler in 2015. To some this was a step forward in promoting competition between small local and regional service providers, and the national providers that most of us interact with. To others it was the end of an era of fair play online; believing the new rules give service providers the ability to do as they please with no governmental oversight. Regardless of whether the repeal was right or wrong on January 16, 2018, 21 state Attorneys General signed on to a suit against the FCC in opposition of the repeal. On the same day two non-profits, Free Press and Public Knowledge, filed their own suits against the FCC. The major question remains, what is the issue at the heart of these suits? The leader of the suit filed by State AGs, Eric Schneiderman, argues that the policy is arbitrary and capricious because the commission failed to justify the departure from the two-year-old policies in a way supported by the administrative record. Furthermore, Schneiderman’s comments claim that the reclassification of broadband as a Title I information service is based on an erroneous and unreasonable interpretation of the Telecommunications Act. The AGs are also upset that there are broad preemption clauses built into the FCC’s order.
Unfortunately for the suits filed, I believe they are unlikely to succeed. The main argument raised by the state AGs is that the FCC is violating Chevron v. Natural Resources Defense Council, Inc.. Chevron lays out a two-step process for determining whether an agency action is permissible. First, a court will look at whether a statute (in the case the Telecommunications Act) unambiguously addresses the issue. If there is ambiguity in the statute, the court will review the agencies interpretation. If that interpretation is reasonable, the court will give the agency broad deference. The first step here is in favor of the FCC; the Telecommunications Act does not include any of the traditional requirements we think of as net neutrality. However, the issue here is when it comes to Chevron step two. The D.C. Circuit has held before that it defers to the FCC on matters of Title II and the ancillary authority that is bestowed by Section 706 of the Telecommunications Act. Furthermore, in National Cable & Telecommunications Association v. Brand X Internet Services, the Supreme court ruled that the FCC has the discretion, under Chevron, to decide not to apply Title II to broadband services. Given this type of precedent it is hard to believe that this new string of lawsuits will survive judicial scrutiny.
The second prong of the AGs’ suit focuses on whether the FCC is incorrectly reclassifying broadband as an information service, rather than keeping it classified as a telecommunications service. The Restoring Internet Freedom order seeks to undue the 2015 reclassification of the internet as a communications service rather than as an information service. The key differences of these types of services what happens to the data as we use the service. A communication service transmits data without changing the form or the content of that data. In the simplest form classifying the internet as a communications service mean ISPs are just a pipe to the internet. Whereas, an information service offers the capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications. While the Internet may seem like a telecom service, because we often direct information to various known users, there is a large portion of it that is simply pushed to various websites for processing, storage, or transformation. In my view the 2015 definitions of information are incredibly narrow, more so than intended by Congress when drafting the Telecommunications Act.
Finally, the preemption doctrine is based on the Supremacy Clause of the United States Constitution. The doctrine of preemption, states that federal law preempts state law when the laws conflict. With the influx of new state net neutrality laws state AGs are keenly aware that this could play a major role in the future. In the Telecommunications Act of 1996 three reasons for FCC preemption were enumerated by Congress. The conflict that may arise here is whether or not the states imposing common carrier style regulations on ISPs prohibit inter or intrastate services.
The State AGs are trying vehemently to protect the internet in the only way that they know how. However, before the 2015 Open Internet Order the internet was not wild west where there were no laws, and after the recent AT&T v. FTC decision we now know that the FTC is in the position to regulate the non-common carrier services provided by ISPs. The FTC was once the authority to police the internet, and I am glad they are in a position to do so again.