Academic journal article Federal Communications Law Journal

US Telecom and Its Aftermath

Academic journal article Federal Communications Law Journal

US Telecom and Its Aftermath

Article excerpt

Table of Contents  I. Background                                                 40 II. 2015 Open Internet Order and the D.C. Circuit'S Response  41     A. "Just and Reasonable" Rates                            43        1. The FCC's Approach                                  43        2. The D.C. Circuit's Response                         47     B. Undue Discrimination                                   48        1. The FCC's Approach                                  48        2. The D.C. Circuit's Response                         49     C. Forbearance of Tariffing Requirements                  52        1. The FCC's Approach                                  52        2. The D.C. Circuit's Response                         55 III. USTelecom and its Aftermath: The FCC Attempts to      Regulate Business Data Services                          57 IV.  Conclusion                                               59 


For almost fifteen years, the thorny issue of net neutrality has loomed over the telecom debate. But what started with the simple notion that the FCC should stop broadband service providers ("BSPs") from engaging in strategic anticompetitive conduct ultimately morphed into the Obama Administration's rejection of nearly twenty years of bi-partisan consensus that the Internet should be subject to "light touch" regulation under Title I of the Communications Act in favor of applying a legacy common carrier regulation designed for the old Ma Bell telephone monopoly under Title II of the Communications Act. (1) While much of the debate to date has revolved around the threshold legal question of whether broadband Internet access should be appropriately classified as an "information" service under Title I or a common carrier "telecommunications" service under Title II, the purpose of this Article is to focus on perhaps the more substantive (yet notably neglected) legal problem: the FCC's actual implementation of Title II in the 2015 Open Internet Order, specifically the ratemaking and tariffing provisions of Sections 201, (2) 2 02 (3) and 203, (4) along with its forbearance authority in Section 10. (5)

As explained in detail below, a proper application of these statutory provisions should have prevented the FCC from doing what it wanted to do in its 2015 Open Internet Order--in particular, the FCC wanted (1) to force BSPs to provide edge providers with terminating access without compensation (i.e., a regulated price of zero) in direct contradiction of Section 201; (2) to impose a blanket ban on reasonable discrimination in direct contradiction of Section 202; but yet (3) to give the patina of a "light touch" approach, to impose directly a regulated price of "zero" but use its forbearance authority contained in Section 10 to forbear from the formal tariffing requirements of Section 203--even while finding that BSPs were "terminating monopolists" and additional competitive entry was unlikely to ensure rates remained "just and reasonable." The FCC's solution to its legal pickle? To ignore the "vast majority of rules adopted under Title II" (6) by selectively picking and choosing whatever provisions of Title II it found convenient to achieve a results-driven outcome, so that it could, in the FCC's own words, "tailor[] [Title II]... for the 21st century." (7) In effect, since the statute prohibited the rules the FCC wished to impose, the FCC simply rewrote the statute. Respect at the FCC for precedent and its governing statute, it seemed, was officially dead. (8)

As to be expected, the FCC's 2015 Open Internet Order was appealed. For reasons known only to them, however, the appellants made the strategic decision to focus their legal challenge on the statutory reclassification question and deliberately not to challenge how the FCC actually implemented Title II via its rules. This strategy proved to be a costly miscalculation.

Citing the Supreme Court's seminal case in NCTA v. …

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