The Good, the Bad and the Ugly of the Net Neutrality Oral Argument
The Good, the Bad and the Ugly of the Net Neutrality Oral Argument
The Good, the Bad and the Ugly of the Net Neutrality Oral Argument

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    If Monday’s net neutrality oral argument in the DC Circuit foreshadowed the court’s decision, opponents and supporters of the FCC’s rules will each have something to cheer and something to fear. 

    While some have portrayed the likely outcome of Monday’s DC
    Circuit oral argument on Verizon’s challenge to the Federal Communications Comission’s Open Internet order
    as a victory for anti-net neutrality forces and a loss for its supporters, the
    reality is much more complicated.   With
    the caveat that one can never rarely predict the ultimate outcome of a case –
    particularly one as difficult and multi-layered as this one – based solely on
    the oral argument, there are some pretty clear takeaways, some good, some bad
    and some just plain ugly.  For a
    comprehensive report on what happened in the courtroom, read Harold’s excellent
    blog post.

    The Good

    The good news – if you are someone who thinks the FCC should
    be able to protect consumers and promote competition with regard to broadband
    –  is that there seemed to be little
    appetite from the judges to question seriously the FCC’s power (or “authority”)
     to regulate broadband internet access
    under Section 706 of the Telecommunications Act of 1996. To the extent that Section 706 gives the FCC the power to regulate in
    various ways to encourage the deployment of “advanced telecommunications
    capability,” the judges seem to take as a given that the open Internet rules would
    promote that goal.  Moreover, the recent
    City of Arlington Supreme Court decision requires courts to give deference when
    an agency like the FCC interprets the scope of its authority.

    If the oral argument is any indication, then one of our
    biggest fears will likely not be realized – that the FCC would be rendered
    completely irrelevant.   The FCC should
    be able to, for example, regulate fraudulent billing, protect consumer privacy,
    promote universal service and (with the caveat discussed below), promote
    broadband competition. 

    This should be cold comfort for anti-net neutrality groups,
    because their professed biggest fear – unbounded FCC power over broadband, may come
    to pass. I’ve never understood why groups concerned
    about the FCC having too much power under Section 706 wouldn’t prefer the
    agency treat broadband internet access as
    a telecommunications service under Title II of the Act.  The agency’s power to regulate under Title
    II is limited to the transmission layer of the network.  But you know what they say about consistency….

    The Bad

    Two of the three judges were very concerned that some or all
    of the open internet rules were really “common carriage” rules (which among
    other things, prohibit carriers from refusing service to anybody or unreasonably discriminating
    in charges, practices, etc.).  Under
    the Communications Act, it is impermissible to regulate non-common carriers (e.g, broadband access providers) like common carriers (e.g., telephone companies). 

    This common carriage/non-common carriage distinction was
    most recently articulated in the DC Circuit decision upholding the FCC’s data
    roaming rule for wireless carriers.  The
    decision was written by one of the judges in the net neutrality case, Judge David
    Tatel.  In that case, Judge Tatel
    described common carrier status as one where “a carrier is forced to offer
    service indiscriminately and on general terms.” Because the data roaming rule, among other
    things, “leaves substantial room for individualized bargaining and
    discrimination in terms,” the court found them not to be common carriage.   

    The FCC General Counsel Sean Lev tried gamely to explain why neither
    the anti-blocking nor the antidiscrimination rules are common carriage.  He argued that a common carrier relationship
    is established only when a “customer” requests service offered by a carrier,
    and the open Internet rules do not prohibit a broadband Internet access provider from refusing service or
    discriminating against any particular customer.  Furthermore, Lev asserted, edge providers (like Google, Twitter, Netflix) don’t request
    service from the end users’ internet access provider, so a rule that prohibits an end user’s access
    provider from blocking or imposing a second charge on an edge provider is not
    common carriage.

    Judge Tatel and Judge Laurence Silberman pushed back hard
    against that argument.  Silberman
    scolded: “You divide up common carriage impermissibly.”  Judge Tatel kept pressing both the FCC’s
    and Verizon’s counsel Helgi Walker for answers as to whether the anti-blocking part of the
    rules could be upheld and the antidiscrimination rules struck down. This very long part of the argument raised the critical question: shouldn’t the judges defer to the judgment of the expert agency as to
    what constitutes common carriage?  One
    would think (and in fact the data roaming decision says that explicitly).  But again, this is the DC Circuit, where
    deference tends to be given to agency decisions the judges like, and refused to
    those they do not. 

    The Ugly

    We won’t know how truly ugly things may or may not be until
    we see the actual decision, and I would refer to Harold’s post for the range of
    possibilities.  And I haven’t up to this
    point mentioned the possible influence of Judge Judith Rogers, who appeared
    more inclined to defer to the FCC.  But it would be bad both for the internet and its users if the FCC were
    to win the war over authority but lose the battle over net neutrality.  What good is having authority over broadband
    access if you cannot use it to keep the internet an open network where the
    biggest companies and the smallest start-ups have an equal opportunity to
    succeed?  Michael’s post gives you a glimpse of the
    future if the FCC cannot craft effective and enforceable net neutrality rules.   

    What is most ugly is that the FCC is responsible for the
    position in which it now finds itself. Had
    the Commission bit the bullet and treated broadband internet access providers as
    “telecommunications services” subject to common carrier obligations when it
    adopted the rules in 2010, the common carriage/ non-common carriage distinction
    would be irrelevant.  But rather than
    revisit that chapter in telecom policy right now, we hope that the panel will
    remember that it is the expert agency, and not the court, that best knows what
    common carriage is and isn’t.