Net Neutrality: Two Sleeper Legal Issues May Force Congress to Act

The Federal Communications Commission is expected to release a draft of the third Open Internet Order on Nov. 22 — exactly three weeks before the Dec. 14 meeting. In April, Chairman Ajit Pai proposed undoing the broad claims of authority made by former President Barack Obama’s two chairmen. That will hand responsibility for policing broadband back to the Federal Trade Commission, the Department of Justice, state attorneys general, and private plaintiffs.

Groups that support the current rules will sue, and the issue will go up to the D.C. Circuit for the fourth time sometime early next year. Meanwhile, briefs are being filed with the Supreme Court, asking them to hear appeals filed in the third round of litigation — including by our organization, TechFreedom.

Whether the Supreme Court or Congress finally resolves this question turns on two arcane but vital legal issues that have gone almost unmentioned — in news coverage as well as congressional hearings.

The first question is how much deference, if any, the courts owe the FCC. The FCC won the last two rounds of litigation not because the D.C. Circuit agreed with the FCC’s reading of what Congress intended in passing the 1996 Telecom Act, but because the court applied Chevron deference, whereby agencies get broad latitude to interpret ambiguous statutes. Throughout the current round of litigation, we’ve argued that Chevron simply doesn’t apply, because the FCC’s authority over the internet is a “major question” — one that, as the Supreme Court has said in several key cases, of such vast “economic and political significance,” and so vastly expands the agency’s regulatory authority, that a clear statement from Congress is required.

Two D.C. Circuit judges wrote lengthy, blistering dissents that turned on our argument: Deferring to the FCC’s claims violates the Constitution’s separation of powers because it would allow the FCC decide questions Congress could not have intended to leave to the agency implicitly. Chevron was never intended to allow agencies to effectively rewriting their statute.

One of those judges, Brett Kavanaugh, is widely considered the best barometer of where the Supreme Court is heading on such questions. Indeed, it was his separation-of-powers argument that gave the Supreme Court a roadmap for its 2014 decision in Utility Air Regulatory Group v EPA. There, the court blocked the Environmental Protection Agency’s Clean Power Plant rule, saying Congress needed to resolve this major question.

The Major Questions doctrine doesn’t always mean the government loses. In fact, in King v. Burwell, Chief Justice Roberts invoked the doctrine, reviewed the statute de novo (instead of deferring under Chevron), and yet upheld it anyway. The doctrine isn’t some right-wing trick for crippling the regulatory state; it actually originated with Stephen Breyer, before Bill Clinton appointed him to SCOTUS.

But if regulating the internet isn’t a “major question,” it’s hard to see what could be. Indeed, Federal Circuit Judge O’Malley, another Clinton appointee, recently called regulation of the Internet a major question. Her dissent objected to the International Trade Commission’s attempts to regulate downloads as “articles” under its 1930s statute. “The responsibility,” she concluded, “lies with Congress to decide how best to address these new developments in technology.”

The second, related legal issue no one’s talking about (at least in this context) is Section 230 — the broad immunity for online services that’s gotten so much attention this summer because legislation is gathering steam to amend that immunity to go after sex traffickers. There’s no question that the law protects broadband companies just as much as it protects websites like Google and Facebook. That means broadband providers can’t be sued for blocking third-party content on their sites, so long as they do so in “good faith.”

That caveat is important: If Hillary Clinton had won the election, Section 230 probably wouldn’t have stopped her FCC from enforcing the net neutrality rules against anti-competitive conduct, but it’s hard to see how the FCC — or, for that matter, the FTC or anyone else — could police the conduct net neutrality advocates say they’re most worried about: outright (private) “censorship” of speech.

Understanding Section 230’s application to broadband also makes clear why Chevron deference is inappropriate for the FCC’s “reclassification” of broadband providers as Title II common carriers: There’s just no way Congress could simultaneously have encouraged internet service providers to exercise editorial discretion while also allowing the FCC take away their discretion by making them common carriers.

You might wonder why this hasn’t come up before. Why are we — not broadband companies — the ones raising this issue now? It’s simple: Broadband providers are tired of being accused of wanting to censor the Internet. Title II proponents have said Verizon admitted in 2012 that it’d be “exploring those commercial arrangements” without net neutrality rules — as proof that Verizon and every other ISP was just waiting to start charging for “fast lanes.” Verizon’s lawyer was actually talking about paying content providers like ESPN — the opposite of the concern everyone has. Given the hysteria, imagine the reaction if an ISP mentioned Section 230 immunity.

So what will happen next? The Supreme Court might decline to hear our case. The FCC will probably invoke the major questions doctrine in its forthcoming order. But when that’s challenged in court, the case will probably be resolved on Chevron grounds — leaving the FTC as the chief cop on the net neutrality beat until the next Democratic FCC chairman. If we’re right, that broadband providers aren’t going to block speech anyway, so the FTC won’t run into the Section 230 immunity.

Bottom line: Both the major questions doctrine and Section 230 issues could lay dormant for years, undermining the certainty “edge” companies say they need. But they shouldn’t. Everyone — including broadband providers — agrees on the basics. Legislation would resolve both of the issues detailed here, and remains the only way to settle the net neutrality issue once and for all.

Berin Szóka is president of TechFreedom, a technology policy think tank. Graham Owens is a TechFreedom Legal Fellow.

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