FCC Launches Title II Rulemaking: Now What?

Oct 20, 2023

As expected, the Democratic-controlled FCC on Oct. 19 voted 3-2 along party lines to begin the process that will result in the adoption of rules, probably in the spring of next year, to impose Title II common carrier obligations on broadband ISPs, which have resisted this heavy-handed policy approach for decades.

The vote was no surprise. The question now is whether the courts will approve the FCC’s new “net neutrality” rules. A debate is raging over whether a new U.S. Supreme Court doctrine will accommodate the FCC’s latest move to prevent ISPs from blocking, throttling, or discriminating against websites for financial gain – actions that ISPs insist they do not take now.

For those who believe the FCC’s rules are judicially doomed, the FCC vote was a waste of agency resources that would be better applied to such issues as broadband deployment and adoption, universal service reform and 5G wireless expansion.

NCTA CEO Michael Powell was quoted earlier this week calling FCC Chairwoman Jessica Rosenworcel's decision to move forward “a shocking mistake,” "regulatory malpractice" and "dated… like your father's Oldsmobile." Powell was FCC Chairman from 2001-2005 and oversaw the degulation of broadband ISPs. NCTA represents major broadband ISPs.

AT&T CEO John Stankey put it this way moments after the vote: “Why we would use taxpayer money and resources and political capital to chase a problem that doesn’t exist is a bit of a mystery to me.”

Stankey's observation doubtless is applicable to a lot of regulatory activity in Washington, D.C.

AT&T CEO John Stankey: “Why we would use taxpayer money and resources and political capital to chase a problem that doesn’t exist is a bit of a mystery to me.”

It may take three years or more for a Supreme Court decision to settle the issue. In the view of some, the Supreme Court’s evolving Major Questions Doctrine will result in rejection of the FCC's net neutrality rules on the basis that Congress had failed to specifically authorize the FCC to adopt them.

The doctrine applies to regulatory policies that deal with major economic and political issues that Congress has not directly addressed. Two prominent Obama administration Justice Department lawyers  - Donald B. Verrilli, Jr. and Ian Heath Gershengorn – are on record saying the FCC's rules will not survive scrutiny under the Major Questions Doctrine.

However, Christopher Wright, former FCC general counsel under Democrat Chairman William Kennard, disagrees. He thinks the FCC has clear authority to classify broadband as a telecommunications service within the meaning of the Telecommunications Act of 1996. As a result, Wright expects the Supreme Court to uphold the FCC. End of story.

“This isn’t a case where an agency has discovered a new power in the vague text of a statute adopted decades ago,” Wright said in an article for Bloomberg Law.

If all goes according to plan, the FCC’s rules should be the law of the land no later than June 30, 2024, thus triggering the legal battle expected to play out over many years – especially if the Supreme Court issues a ruling that gives the FCC wiggle room to go back and craft acceptable rules. That outcome would start a whole new, multiyear regulatory-judicial cycle.

Some hope Congress pre-empts the prolonged judicial encounters by finally passing a law that determines the regulatory status of broadband ISPs with extreme clarity once and for all. But that hope is 20 years old.