Academic journal article Federal Communications Law Journal

The Story of the FCC's Net Neutrality Decision and Why It Won't Stand Up in Court

Academic journal article Federal Communications Law Journal

The Story of the FCC's Net Neutrality Decision and Why It Won't Stand Up in Court

Article excerpt

TABLE OF CONTENTS  I. DEFECTS IN PROCESS    A. Reclassification    B. An Unanticipated Reversal    C. Three Examples    D. Improper Procedure II. DEFECTS IN SUBSTANCE    A. Reclassification (Title II)       1. The Stevens Report       2. Recent Developments       3. Broadband Internet Access Transmission Services       4. Heightened Scrutiny    B. The Mobile Broadband Hurdle (Section 332)       1. Redefining the Public Switched Network       2. Redefining Functional Equivalence       3. Statutory Contradiction    C. The Telecommunications Act (Section 706) III. CONCLUSION 

We live in the Internet age. We speak, we post, we rally, we learn, we listen, we watch, we buy, we sell, we meet-in short, we live-online. The Internet has transformed billions of lives here and around the world. It has aided the cause of freedom, lifted people out of poverty, democratized entrepreneurship, and much more.

How did this come to be? In the United States, the answer is twofold. First, the private sector took risks. Over the past two decades, companies invested well over $1 trillion in connecting Americans to the Internet. Confident of limited regulation, they laid fiber, upgraded cable systems, launched satellites, built towers, and deployed spectrum in order to provide broadband Internet access from Alaska to Arizona, Maine to Mississippi.

Second, government stayed out of the way. Starting almost twenty years ago, a bipartisan consensus favored an open Internet. A Democratic President and Republican Congress enshrined in the Telecommunications Act of 1996 the principle that the Internet should be a "vibrant and competitive free market ... unfettered by Federal or State regulation." (1) And dating back to the Clinton Administration, every FCC Chairman-Republican and Democrat-let the Internet grow free from utility-style regulation. The results of Internet freedom, both for consumers and online entrepreneurs, speak for themselves. (2) Indeed, given how quickly and deeply the online economy in this country has progressed, I believe the Internet is the greatest free-market innovation in history.

Unfortunately, the FCC recently replaced that freedom with government control. On February 26, 2015, a narrow majority of the FCC abandoned those policies. It reclassified broadband Internet access service as a Title II telecommunications service. It seized unilateral authority to regulate Internet conduct, to direct where Internet service providers put their investments, and to determine what service plans will be available to the American public. This was a radical departure from the bipartisan, market-oriented policies that served us so well for the last two decades.

The fate of net neutrality regulation will ultimately be decided in the courts. Litigants have already sought judicial review of these new rules. (3) In this Article, I'll discuss why I believe procedural defects and substantive flaws will prevent the FCC's decision from standing up in court.

And if I'm wrong-if this Order manages to survive judicial review-American consumers will be worse off. For these will be the consequences: higher broadband prices, slower speeds, less broadband deployment, less innovation, and fewer options for American consumers. Indeed, we already have seen evidence that the investment and innovation that fomented the digital revolution has slowed as a result of the agency's power grab. (4)

I. DEFECTS IN PROCESS

First-process. I don't believe the FCC complied with the requirements of the Administrative Procedure Act in adopting Internet regulations. (5) In particular, the public did not know what rules the Order adopted beforehand because the FCC never proposed them.

A. Reclassification

Recall that last year's Notice of Proposed Rulemaking came on the heels of the D.C. Circuit's Verizon decision, which "struck down the 'anti-blocking' and 'anti-discrimination' rules," holding that "the Commission had imposed per se common carriage requirements on providers of Internet access services. …

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