Analysis: FCC attempt to restore Net Neutrality & U.S. standards for broadband reliability, security, and consumer protection
FCC Chairwoman Rosenworcel announced the tentative agenda for the April 2024 Open Meeting scheduled for 10:30 am EDT on Thursday, April 25, 2024. As part of the agenda, the Commission will consider a draft Declaratory Ruling, Order, Report and Order, and Order on Reconsideration (Order) that would restore Net Neutrality [1.] and bring back a national standard for broadband reliability, security, and consumer protection.
Note 1. Net neutrality is a concept that internet service providers (ISPs) should treat all data on the internet equally. This means that ISPs should not block, slow down, or charge more money for access to certain websites or services. Net neutrality is important because it helps to ensure that everyone has equal access to the internet.
If the FCC order is approved, the Chairwoman’s proposal would ensure that broadband services are treated as an essential resource deserving of FCC oversight under Title II authority [2].
Note 2. U.S. carriers providing “telecommunications services,” are regulated under Title II. of the 1934 U.S. Communications Act.
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What the Declaratory Ruling and Order Would Do:
Classify broadband Internet access service as a telecommunications service and classify mobile broadband Internet access service as a commercial mobile service.
Find that reclassification would provide the Commission with additional authority to safeguard national security, advance public safety, protect consumers, and facilitate broadband deployment.
Find that classification of broadband Internet access service as a telecommunications service represents the best reading of the text of the Act, and that such reclassification accords with Commission and court precedent and is fully justified under the Commission’s long standing authority to classify services subject to its jurisdiction.
Establish broad, tailored forbearance—including no rate regulation, no tariffing, no unbundling of last-mile facilities, and no cost accounting rules—in the FCC’s application of Title II to broadband Internet access service providers (ISPs).
What the Report and Order Would Do:
Reinstate straightforward, clear rules that prohibit blocking, throttling, or engaging in paid or affiliated prioritization arrangements, and adopt certain enhancements to the transparency rule.
Reinstate a general conduct standard that prohibits unreasonable interference or unreasonable disadvantage to consumers or edge providers.
Make clear that the Commission will employ a case-by-case review under sections 201 and 202 to ensure that Internet traffic exchange practices do not harm the open Internet.
Establish a multi-faceted enforcement framework comprised of advisory opinions, enforcement advisories, Commission-initiated investigations, and informal and formal complaints.
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Legal Opinions on FCC net neutrality draft order:
Legal experts and FCC watchers say the net neutrality draft order on the FCC’s April 25th open meeting agenda will face legal arguments similar to what the 2015 net neutrality order did, with many of the same parties involved.
Starting with a briefing for reporters the day before the draft order was released, the FCC argued the proposed rules would survive legal challenge. Net neutrality rules are “wildly popular,” Chairwoman Jessica Rosenworcel said in California last week, adding the draft rules are “court approved.” Rosenworcel said, “I want to make sure that they are again the law of the land.”
Major Questions:
The proposed order is “legally vulnerable,” Free State Foundation President Randolph May told Commissioner Brendan Carr, according to a filing Friday in docket 23-320. May said it was “extraordinary … for an agency to propose burdensome restrictive major regulatory mandates without any meaningful evidence of any present harm to consumers or competition.”
Daniel Deacon, assistant professor at the University of Michigan Law School, pointed to Justice Brett Kavanaugh’s dissent as a D.C. circuit judge in the 2017 en banc affirmation of the 2015 net neutrality rules. Kavanaugh argued that imposing net neutrality rules via Title II represents a “major” policy that requires clear congressional authorization under the major questions doctrine, and that such authorization was lacking, Deacon said: SCOTUS “could reach that conclusion regardless of what they end up doing in Loper Bright and Relentless.”
The commission tries to head off major questions arguments in the draft order. “We do not think the major-questions doctrine properly comes into play in this context at all,” it said. “We are simply following the best reading of the Communications Act, as demonstrated by the statute’s plain text, structure, and historical context: there is no call for deference to an interpretation that is not the statute’s most natural reading.”
The rules won’t “have the extraordinary economic and political effect required to implicate the major-questions doctrine,” according to the draft order.
While the rules “will have substantial benefits for the American public … not every regulatory action that has substantial effects is so momentous as to trigger the major-questions doctrine. The Internet will continue to sustain its enormous economic and social value under our actions today, just as it did under the 2015 Order.”
The pending net neutrality order “is the antithesis of the Supreme Court’s major-questions cases,” the FCC said. “There is nothing novel about the Commission’s exercise of its classification power here,” as the agency has exercised it numerous times, it said. “Regulating communications services and determining the proper regulatory classification of broadband falls squarely within the Federal Communications Commission’s wheelhouse,” the commission said.
Cato’s Skorup disagreed. The agency sees national security implications in net neutrality and finds that it’s important for free speech, “telegraphing they believe” it’s a major question, he said.
It’s unclear how the Supreme Court seemingly heading toward some change to its Chevron doctrine would play out in the inevitable appeal of the FCC’s order. The net neutrality issue isn’t about the FCC having superior insight into the nature of broadband but is a political question about oversight, said Douglas Holtz-Eakin, American Action Forum president. By the time a net neutrality case comes before the D.C. Circuit, there would likely be a SCOTUS ruling affecting Chevron, and the appellate court would have to be guided by it, he said.
CCIA’s Joyce said that even if SCOTUS rejects Chevron, that doesn’t apply to net neutrality, since it doesn’t involve a brand new and novel FCC action. “How can you possibly say that about whether broadband is a Title II service?” she asked. “This stuff is old.”
Some see a net neutrality legal fight charting new territory. The draft order is broader than 2015’s, with issues of national security and broadband contributing to Universal Service Fund (USF), so there are several different issues than were involved in the past, said Holtz-Eakin.
While it seems likely that SCOTUS will curtail or reject the Chevron doctrine sometime this summer, that isn’t going to deter the FCC, Skorup said. But it could change how the D.C. Circuit — which upheld the 2015 net neutrality order — approaches things, he said. Given SCOTUS reversals of the D.C. Circuit on federal agency deference issues, such as 2021’s Alabama Association of Realtors decision, “I would hope the D.C. Circuit would get the message … that it needs to apply more scrutiny than it is giving agencies currently,” he said.
“The net neutrality rule will undoubtedly be characterized by the reviewing court as a major question because it is an issue of ‘vast economic and political significance,’” emailed Thomas McGarity, University of Texas’ Lozano Long Professor in Administrative Law. “That being the case, Chevron will be inapplicable,” he said: “The court will only ask whether Congress has clearly authorized the agency to promulgate the rule. The clarity of the authorization will be the primary issue on appeal.”
Other lawyers said it’s not preordained that the order will be overturned.
“It’s important to remember that the only reason why broadband is an ‘information service’ is because of Chevron deference,” said Public Knowledge Senior Vice President Harold Feld. The 9th U.S. Circuit Court of Appeals in 2003 ruled that cable modem service was a telecom service, he said. SCOTUS’ 2005 Brand X decision, then “reversed the 9th Circuit on the grounds of Chevron deference. In 2019, the 2017 order rolling back the 2015 net neutrality rules survived a challenge at the D.C. circuit only because of precedent,” Feld said.
Two of the judges, Patricia Millett and Robert Wilkins, indicated they would have found the rollback order “arbitrary … but for Chevron and Brand X. One cannot help what activist judges will do,” but if the pending order is returned to the D.C. Circuit, “I would expect it to be affirmed,” Feld added.
The Supreme Court held in Brand X that the FCC has the discretion to decide how to classify broadband, emailed Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman.
“If, as is likely, the Chevron, and Brand X precedents will be modified to some degree this spring, and depending on what the Court says, the matter might then have to be resolved by analysis of the text,” he said.
Perkins Coie’s Martin said it’s likely the D.C. Circuit could affirm the FCC’s action again, as there’s consistent precedent that agency action on the matter is OK. However, if SCOTUS overturns Chevron, the appellate court may feel compelled to come out differently, he said. And if the D.C. Circuit overturns the FCC, SCOTUS could very well deny any subsequent cert petition by the agency, he said. Schwartzman questioned whether SCOTUS will ultimately hear the case. The court is “loath to overrule precedent unless absolutely necessary,” he said.
CTIA discussed concerns about how non-broadband internet access services are treated under the draft net neutrality order circulated by Chairwoman Jessica Rosenworcel. In meetings with staff for all five commissioners, CTIA asked the FCC to remove warnings not present in the 2015 order. Non-BIAS services, and network slicing, have emerged as major issues. The draft “favorably references non-BIAS use cases that ‘cannot be met over the Open Internet,’ but any suggestion that an offering that can function to some extent over BIAS must be offered over BIAS would be a dramatic shift from the 2015 framework,” said a filing posted Wednesday in docket 23-320. The draft also says the commission “will closely monitor any services that have a negative effect on the performance of BIAS in any given moment or the capacity available for BIAS over time” and that the commission “will be watchful of services that do not require isolated capacity.
CTIA said, “The 2015 Order did not set forth any of these rigid warnings, and for good reason. The net effect of such guidance could restrict the offering of non-BIAS services. Customers would lose out on choice and innovation, and networks would operate less efficiently.”
References:
Link to the Draft Declaratory Ruling, Order, Report and Order, and Order on Reconsideration: https://docs.fcc.gov/public/attachments/DOC-401676A1.pdf
Link to the April 25, 2024 Meeting webpage: https://www.fcc.gov/april-2024-open-commission-meeting
https://www.fcc.gov/document/promoting-fast-open-and-fair-internet
https://www.reuters.com/technology/fcc-vote-restore-net-neutrality-rules-reversing-trump-2024-04-02/
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https://communicationsdaily.com/article/view?search_id=851581&id=1935719
Senators Edward J. Markey (D-Mass.) and Ron Wyden (D-Ore.), along with Federal Communications Commission (FCC) Chairwoman Jessica Rosenworcel, Senator Maria Cantwell (D-Wash.), and Representative Anna Eshoo (CA-16), praised the upcoming FCC rule reclassifying broadband as a telecommunications service under Title II of the Communications Act and reinstating net neutrality protections.
The FCC officially released the rule on April 4, and the Commission will vote on the final rule at its open meeting on April 25. Net neutrality is essential for all Americans to be able to freely communicate, seek jobs and telehealth care, run businesses, and more. The Trump administration had previously repealed the net neutrality rule, stripping away the protections of a free and open internet and eliminating the Commission’s rightful authority over broadband. “Over six years after the Trump FCC foolishly repealed the net neutrality rule, the FCC is on the verge of reinstating these critical protections and regaining the authority to oversee the most critical communication tool of our day: broadband,” said Senators Markey and Wyden. “This rulemaking is an overdue recognition that broadband – like water or electricity – is essential, and the FCC’s authority should reflect that.
We commend Chairwoman Rosenworcel and the Commission staff for their hard work, diligence, and expertise, and we will continue to work with them to adopt and defend strong net neutrality protections.” “Americans should be able to use the internet without fear and without foreign adversaries posing legitimate threats to them on U.S. soil. We need to protect the growing innovation economy by making sure that we have rules that say you can’t throttle, you can’t slow down, and you can’t charge exorbitant fees just to have preferential treatment,” said Senator Cantwell.
“I applaud the Chair for their work and look forward to working with her. I thank my colleagues, Senator Markey, who has been such a leader on this, and my dear friend, Anna Eshoo, for her unbelievable leadership in the House.” “I’ve advocated for a free and open internet since I came to Congress. Lack of an open internet has real life consequences. In 2018, while Santa Clara County firefighters were fighting one of the largest wildfires in California’s history, Verizon throttled their data speeds, slowing them down to one 200th of their normal speed, severely hindering their ability to communicate and putting people’s lives at risk. The FCC’s action to restore net neutrality is imperative for public safety, consumer protection, and American innovation,” said Congresswoman Eshoo. “There are a lot of things in this country that divide us, but net neutrality is not one of them. Survey after survey showed that 80 percent of the public support the FCC’s national net neutrality rules and opposed their repeal. Bringing back the FCC’s authority over broadband and putting back net neutrality rules is popular, and it has been court-tested and court-approved. It is good for consumers who count on broadband like never before, and it is important for public safety and national security. When the FCC votes next week, we have an opportunity to get this right. Because in a modern digital economy, it is time to have broadband oversight, national net neutrality rules and policies that ensure the internet is fast, open, and fair,” said Chairwoman Rosenworcel. In 2006, Senators Markey and Wyden introduced the first net neutrality bills in the House of Representatives and Senate, respectively. On April 2, Senators Markey and Wyden, along with Senators Richard Blumenthal (D-Conn.) and Amy Klobuchar (D-Minn.), sent a letter to the FCC urging it to finalize a strong net neutrality rule. In September 2023, Senators Markey and Wyden led 25 of their Senate colleagues calling on the FCC to reclassify broadband as a telecommunications service under Title II of the Communications Act and restore net neutrality protections. Senators Markey and Wyden previously introduced the Net Neutrality and Broadband Justice Act, which would accurately classify broadband as a telecommunications service under Title II.
he FCC on Thursday is expected to vote to reclassify broadband providers as common carriers under Title II of the 1934 Communications Act. This will let the commission regulate providers like AT&T, including by fixing prices and micro-managing network investment. Why does the FCC need this power?
She concedes that providers don’t block, throttle or charge more to speed up sites. Yet this was the justification for the Obama FCC’s Title II power grab. Ms. Rosenworcel’s new justification is that “loopholes” in FCC oversight have left the internet vulnerable to national-security, cyber-security and privacy threats. This is ridiculous, and she knows it.
The Biden Administration notes in an FCC filing that U.S. security agencies already have and “exercise substantial authorities with respect to the information and communications sectors.” The FCC draft order lists the numerous authorities the FCC has to restrict the equipment of such foreign-controlled companies as Huawei in broadband networks.
Title II doesn’t grant the commission new national-security authority. Nor does it grant new tools to bolster cyber-security, which is the purview of the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency.
Reimposing Title II would ironically create a privacy loophole for broadband providers by stripping the Federal Trade Commission of oversight. A 2017 Congressional Review Act resolution overturned the Obama FCC’s broadband privacy regulation, which prevents the commission from re-imposing such rules.
The draft order doesn’t argue that the FCC needs Title II to protect Americans, only that it “furthers” and “enhances” the FCC’s existing power with “a broad grant of rulemaking authority to ‘prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this chapter.’”
In other words, Ms. Rosenworcel is reimposing Title II because she wants sweeping political control over the internet. The draft order even floats the possibility that the FCC could use Title II to ensure “residents of apartment buildings can choose their own broadband providers.” Does she plan to intervene in condo disputes? The draft order says the agency will “forebear” from applying most of the hundreds of Title II authorities for now. Yet it leaves the door open to applying them in the future.
Provider practices that interfere with the government’s “digital equity” goals could be deemed unlawful. The order reinstates a vague “no-unreasonable interference or disadvantage standard” that lets the FCC “prohibit practices that unreasonably interfere” with and cause “harm to the open Internet.”
What are such unreasonable practices? Carriers will find out when the FCC prohibits them using a “case-by-case review” and “multi-faceted enforcement framework comprised of advisory opinions.” In other words, the decisions will be up to bureaucratic whim. To minimize legal risks, providers will have to ask FCC permission to do almost anything. This will create enormous regulatory uncertainty that will slow innovation and investment. After the Obama FCC imposed Title II, broadband investment fell for the first time outside of a recession.
That changed after the Trump FCC scrapped the Obama rule. Investment and access to high-speed Internet surged. By the end of 2019, 94% of Americans had access to high-speed fixed and mobile broadband, up from 77% in 2015. In 2022 broadband builders laid more than 400,000 route miles of fiber, more than 50% more than in 2016.
Prices fell with more competition. A study by Casey Mulligan and Phil Kerpen for the Committee to Unleash Prosperity found that, from September 2017 to September 2023, the price index for wired internet services fell 11% compared to the overall consumer-price index. The CPI for wireless fell 21% in real terms. The biggest winners from this price decline were low-income households, which pay a higher share of their earnings on broadband.
https://www.wsj.com/articles/fcc-net-neutrality-jessica-rosenworcel-biden-administration-internet-b427c825?mod=hp_opin_pos_1