Analysis: It’s a Good Bet Courts Take Down Rosenworcel’s Net Neutrality Rules

Dec 17, 2023

By Ted Hearn, Editor of Policyband

Washington, D.C., Dec. 17, 2023 – For broadband Internet Service Providers (ISPs), the current Federal Communications Commission is a lost cause, a total waste of time.  In the end, they are counting on the courts for vindication, and they are probably making a smart bet.

Even though the FCC acts as if nothing has changed, in fact a lot has changed in the legal arena. Last year, the Supreme Court issued a bombshell decision in West Virginia v. EPA that will make it arduous for an agency like the FCC to adopt consequential rules absent explicit authorization from Congress.

“The Supreme Court is steadily reclaiming primary authority to determine the meaning of statutes that federal agencies implement,” the Fiber Broadband Association observed in comments with the FCC last Thursday.

But the FCC seems to be going about its business as if it never got word of the new legal constraints placed upon it by West Virginia v. EPA.

Last Thursday, broadband ISPs – joined by thousands of others enmeshed in the issue of Net Neutrality – filed reams of paper with the FCC in response to the agency’s new effort to slap common carrier regulations on broadband ISPs for the second time in eight years. The FCC is expected to adopt the rules in 2024.

The war over Net Neutrality, also known as Title II regulation, has been raging for decades. The latest attempt at handcuffing broadband ISPs began in October under Democratic FCC Chair Jessica Rosenworcel. She voted to impose Net Neutrality in 2015, only to see that move vacated three years later while she was in the minority under Republican FCC Chairman Ajit Pai.

In the past, broadband ISPs and their foes would file detailed comments arguing over two threshold legal questions: Is broadband a heavily regulated telecommunications service or a lightly regulated information service under federal law? Is the FCC’s choice of classification entitled to judicial deference if the law is ambiguous?

Although these questions remain important legally as the comments last week underscored, the truth is they have become borderline irrelevant – marginalized by the outcome in West Virginia v EPA in which a Supreme Court majority enunciated the “major questions doctrine” and with it the high court’s intent for the judiciary to cage the administrative state and put the onus on Congress to write clearer laws.

The epoch of judicial deference is coming to an end for a simple reason: The Supreme Court is stacked with justices who believe too much power resides in agencies like the FCC, threatening the separation of powers by vesting almost unchecked lawmaking powers in unelected regulators like Rosenworcel.

Thus, the standard of review established in West Virginia v EPA now requires courts to explore these two determinative questions prior to almost anything else: Is the regulation before the court a major question in the sense it involves an issue of “vast economic and political significance” and has an agency like the FCC received clear authorization from Congress to adopt its regulations?

You be the judge ...

Is Net Neutrality an issue of “vast economic and political significance?”

Of course, it is. The broadband services market is a $150 billion industry by annual revenue and as the FCC said, broadband access “connections have proved essential to every aspect of our daily lives, from work, education, and healthcare, to commerce, community, and free expression.” Broadband ISP are certainly vital to edge providers like Apple, Microsoft and Amazon, whose combined market capitalization is $7.2 trillion.

Has the FCC received clear authorization from Congress to classify broadband Internet access as a telecommunications service and impose Net Neutrality?

Again, the answer is no – otherwise, why would so many Capitol Hill lawmakers keep introducing bills to classify broadband access as a telecommunications service under Title II? In fact, several times in law Congress has referred to broadband Internet as an information service, not a telecommunication service – Rosenworcel’s preferred classification.

As then-Judge Brett Kavanaugh put it in 2017, “Net neutrality … is a major rule, but Congress has not clearly authorized the FCC to issue the rule. For that reason alone, the rule is unlawful.” It’s unlikely Justice Kavanaugh has adopted a new position.

In its comments, T-Mobile reminded the FCC that Congress does not hide elephants in mouseholes – meaning “Congress rarely provides an extraordinary grant of regulatory authority through language that is modest, vague, subtle, or ambiguous” as the Congressional Research Service put it. 

“Congress knows how to empower the [FCC] to regulate [broadband ISPs] when it wishes to do so. A reviewing court could readily conclude that the absence of any such action by Congress in this case serves as further evidence that Congress has not authorized the Commission to apply common-carrier regulations to broadband,” T-Mobile said.

Some don’t view the major questions doctrine as a threat to the FCC. The Computer & Communications Industry Association, in its FCC comments, stressed that because the FCC’s 2015 Net Neutrality regulations were upheld twice by a federal appeals court, “we are long past the point that the ‘major questions doctrine’ could topple the proposed return to” Net Neutrality. CCIA’s membership includes Apple, Amazon, and Meta/Facebook.

In somewhat of a surprise, CCIA didn’t address the fact that the major questions doctrine appeared in a Supreme Court majority opinion for the first time several years after the FCC’s Net Neutrality rules were upheld by the federal appeals court.

“A robust major questions doctrine is now a fact of regulatory life,” the Fiber Broadband Association warned. “It is doubtful that an FCC decision reclassifying broadband as a Title II telecommunications service will survive a Supreme Court review.”

But relief from the Supreme Court, if needed, doesn’t happen in a flash.

“In the time it will take the courts to undo the [FCC’s] unlawful arrogation of regulatory power, the Internet and consumers will suffer,” USTelecom – The Broadband Association said in its FCC comments.