Third Time’s the Charm for the FCC’s Net Neutrality Rules

(Rob Kunzig/Morning Consult)

A federal appeals court upheld the Federal Communications Commission’s net neutrality rules on Tuesday in a landmark victory for open internet advocates.

The massive court case, US Telecom Association vs. FCC, pitted some of the country’s major broadband providers, including AT&T Inc. and Verizon Communications, against the agency, with numerous amicus briefs filed on behalf of both sides.

The industry has been vocal in its opposition to the FCC’s 2015 Open Internet Order, the ruling that implemented the strongest net neutrality rules to date. Importantly, that rule classified broadband service as a common carrier under Title II of the Communications Act, basically putting internet on par with landline telephone service. The industry protested that broadband was in fact an “information service” and thus not subject to Title II regulation.

A three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit upheld this classification, noting that most broadband service providers also offer communications services and advertise in that fashion. As such, they cannot simply be considered an information service. “Once a carrier uses a service that would ordinarily be an information service — such as DNS or caching — to manage a telecommunications service, that service no longer qualifies as an information service under the Communications Act,” the opinion said.

The FCC has come under heavy scrutiny from industry groups and members of Congress alike for the net neutrality rules. The court ruling is particularly important since two previous net neutrality orders were struck down.

“Today’s ruling is a victory for consumers and innovators who deserve unfettered access to the entire web, and it ensures the internet remains a platform for unparalleled innovation, free expression and economic growth,” FCC Chairman Tom Wheeler said in a statement. “After a decade of debate and legal battles, today’s ruling affirms the commission’s ability to enforce the strongest possible internet protections — both on fixed and mobile networks — that will ensure the internet remains open, now and in the future.”

Internet service providers’ opposition to the net neutrality rules has reverberated through later agency proceedings, such as the FCC’s recent proposal to police the privacy practices of internet service providers. The industry considers those requirements excessively burdensome and potentially confusing for both consumers and businesses. The agency was able to move into regulating privacy in the internet space because of its reclassification of broadband providers under the net neutrality rules.

The FCC’s 2015 net neutrality order aimed to maintain the internet as an open and fair space by putting in place rules prohibiting paid prioritization and blocking or throttling online services. (The FCC’s order contained more than 700 rules in a 400-page document.)

While the rules disrupted the broadband industry with what they see as heavy regulations, the core of the case rested on the FCC’s legal defense for enforcing these rules. To justify imposing new openness rules on broadband providers, the commission reclassified them as common carriers under Title II of the 1934 Communications Act (the same bill that created the FCC) in its 2015 order.

Title II allows the FCC to regulate telecommunications services, or common carriers, which have typically been limited to voice services. In reclassifying broadband providers as common carriers, the FCC gave itself the legal backing to apply its net neutrality rules.

Much of the court proceedings centered on the question of whether the internet really is a telecommunications service. For example, do broadband providers ultimately serve the same purpose as phone service carriers?

The petitioners drew on this definition to make their case and in oral arguments on Dec. 4. They argued that the internet is an information service and therefore cannot be regulated as a common carrier.

Tuesday’s decision breaks the FCC’s poor history in defending net neutrality cases in court, as it received full backing from the court of appeals on its third attempt.

The last time the agency defended net neutrality rules in court, in 2014, the plaintiff was Verizon. Those net neutrality rules came from the 2010 Open Internet Order that the court mostly vacated, saying the rules could only be applied to common carriers. The judges in that case ruled that the FCC didn’t have the authority to impose those rules on broadband providers that the agency didn’t classify as common carriers at the time.

Judge David S. Tatel, one of the judges presiding over the most recent challenge, from USTelecom, wrote the opinion in today’s decision with Judge Sri Srinivasan.

The rules have also come under scrutiny from Congress, with Republicans highly opposed to the White House-backed internet rules.

Additionally, the rules have split Democrats and Republicans in telecom policy and have served as a backdrop for many legislative debates in recent months; a recent House Appropriations funding bill would prohibit the FCC from enforcing its net neutrality rules until lawsuits challenging the rules were decided. The commission can now rest easy there.

The three-judge panel ruled today that the FCC had correctly explained why it reclassified internet service providers as a telecommunications service for both standalone and mobile broadband. The court sided with the FCC’s argument that the American public perceives broadband as a telecommunications service based on the way they use it.

In their opinion, Judges Tatel and Srinivasan said the FCC’s “conclusions about consumer perception find extensive support it the record and together justify the Commission’s decision to reclassify broadband as a telecommunications service.”

The judges were also won over by the FCC’s argument that if internet service providers advertise high speeds for internet browsing, it links their services to the ease at which a customer could peruse the web.

“Based on the providers’ emphasis on how useful their services  are  for  accessing third-party content, the Commission found that end users view broadband service as a mechanism to transmit data of their own choosing to their desired  destination — i.e.,  as  a  telecommunications service,” the judges wrote.

“Petitioners assert numerous challenges to the Commission’s decision to reclassify broadband. Finding that none has merit, we uphold the classification,” Tatel and Srinivasan added.

Morning Consult