"The Buck Stops at the FCC"-(Net Neutrality) [View all]

[merrily]

Until this, I've never wanted to write an OP here. However, myths about net neutrality are abounding on multiple DU threads. Trying to refute the same myths on one thread after another solely with replies is too time-consuming and, candidly, too boring. Hence, this post.

The subject is complicated, so I hope that you will bear with me.

Analysis must begin, of course, with Verizon v. FCC, decided by United States Court of Appeals for the D.C. Circuit (Court) in January 2014.

http://www.cadc.uscourts.gov/internet/opinions.nsf/3AF8B4D938CDEEA685257C6000532062/$file/11-1355-1474943.pdf

I will deal in this post only with the majority opinion (60+ pages). Unless I give a different reference, things stated below about the law are things that the Court said in the majority opinion. When I capitalize the word "opinion," below, please know that I am referring to the majority opinion in Verizon v. FCC (2014)


Some Initial Background.

The FCC has only the power that Congress gives the FCC by statute. However, courts give federal agencies considerable leeway in interpreting the statute(s) that apply to the agency. Consistent with the prior sentence, the FCC has full power to change its own rules, but rule changes also require a rule-making process that includes notices and public hearings. In other words, the FCC can change its own rules, but it cannot do so in a second. It takes time and money on the part of the FCC and others and is, well, a process.

The FCC has power to regulate something called a common carrier. It's not a perfect analogy, but you might think of a Greyhound bus, operated to take members of the public where they want to go, as opposed to a bus owned by an individual for his or her own use. With a Greyhound, you can hop on and ride to your chosen destination as long as you pay the standard fare and behave reasonably. On the latter, the individual owner has a lot more to say about who has access to the bus and under what conditions. Greyhound is a common carrier. The other bus is not. The power of the federal government to regulate common carriers relatively heavily has been recognized for a very long time.

The FCC has power to classify companies as common carriers, as long as the classification is permitted under relevant federal statutes. The FCC also has power to regulate companies that are not common carriers. The FCC also can change the classifications that it has previously given companies, aka re-classify. Re-classifications, like other changes, require a rule-making process.

Here is the crux of the Opinion: The FCC has no statutory power to impose common carrier-type regulations on a company that is not FCC-classified as a common carrier. Please plant that one firmly in your mind because everything in this lengthy post depends on that: The FCC cannot impose certain common carrier-type regulations on companies that the FCC never classified as common carriers.

Here is another one to plant firmly in your mind: The FCC has never classified broadband providers as common carriers. In one or more previous rule-making processes, broadband providers were instead classified as information providers.

Something I will mention only in passing: A company like Verizon is both a broadband provider and provider of telephone services. In its capacity as a provider of telephone services, Verizon is indeed classified as a common carrier, but the classification does not apply to its broadband operations. For convenience, let's pretend for purposes of this post that broadband provider companies do not engage in any other activities.

At some point after Obama's first inauguration, the FCC instituted a rule-making process affecting broadband providers. Again, the FCC did not, during this rule-making process, or at any other time, seek to re-classify broadband providers as common carriers. For that reason, broadband providers were not classified as common carriers when Verizon sued the FCC; and they are still not classified as common carriers. This rule-making process of some years ago did, however, result in some new rules that we like to call "net neutrality" rules.

Okay, I hope at least some of you got this far.

Truth # 1: No court "struck down net neutrality." Part A

The term "struck down net neutrality" creates a very false impression of the Opinion.

In the initial portion of the Opinion, the Court noted that the FCC had not classified broadband providers as common carriers. Because of that failure to re-classify, the FCC could not impose on broad band providers certain common carrier-type regulations.

A lot of the opinion after that point is devoted to determining whether or not some of the new rules that the FCC tried to impose on broadband carriers were common carrier-type regulations or not. The net neutrality rules themselves were never declared outside the current statutory authority of the FCC. Rather, only the FCC's attempt to apply the rules to companies that the FCC had not already classified as common carriers was deemed to exceed the FCC's current statutory authority.

The L.A. Times articulated this as follows:

The D.C. Circuit Court of Appeals invalidated the first two of those rules in January, saying the commission didn't prove it had the legal authority to impose such restrictions on information services.

http://www.latimes.com/opinion/opinion-la/la-ol-net-neutrality-fcc-fast-lane-20140423,0,3906798.story#ixzz306QZvrla

To omit the last three words of that sentence is to mis-state the Opinion.

Can the FCC re-classify broadband providers as common carriers at some future date, without further Congressional action?

The Court did not hold on that, one way or the other. Doing so would have been an advisory opinion and federal courts cannot give advisory opinions. The Court said only that the FCC cannot treat broadband providers as though they are common carriers while the FCC still has broadband providers classified as information services. (The italicized part of the prior sentence apparently escaped some readers.) But please keep reading because some very knowledgeable people have spoken about it.

If the FCC should re-classify broadband providers as common carriers in the future, can the FCC then force net neutrality on broadband providers without further action by Congress?

The Court did not hold on that, one way or another, either. That, too, would be an advisory opinion and, again, federal courts cannot give advisory opinions. But, again, please keep reading.

Is there a Constitutional issue?

Verizon did raise the issue of a taking without due process, given that net neutrality would prevent broadband providers from making more money. Given how the Court decided, it did not need to reach the Constitutional issue and therefore did not. I will just note that common carriers have been heavily regulated for decades in ways that prevent them from maximizing their profits. And companies, such as Netflix, that want access to a common carrier without being charged a premium, can raise their own Constitutional issues, including the First Amendment.

Also, federal courts owe deference to Congress, which has put the FCC in charge of this, and to the FCC. However federal courts do not owe deference to Verizon or other broadband providers.

I am certain that authors cited below read the Opinion and noted that Verizon raised a Constitutional claim. None of them seem to think it an obstacle.

At the very least, I don't see any rationale for keeping the FCC from at least trying re-classification, given what is at stake.


Truth #1: No court "struck down net neutrality." Part B How can I assure you that my above description of the Court's decision is correct?

First, on February 19, 2014, FCC Head Wheeler issued a statement about the Opinion. If the Court had forever precluded the FCC from forcing net neutrality rules on broadband providers, that surely would have been in the statement about his plans to make new rules. (Why would the FCC or the Executive want all the blame?) It wasn't in his statement, though.

http://www.fcc.gov/document/statement-fcc-chairman-tom-wheeler-fccs-open-internet-rules

That statement, of course, was before Wheeler's April 23, 2014 statement, leaked by the WSJ, saying that the FCC would not be promulgating new net neutrality rules after all.

Next, an article by Michael Copps, the title of which is quoted in my post.

Copps is a Phi Beta Kappa college graduate with a Ph.d, IOW, both smart and highly-educated. For 12 years, Copps was Chief of Staff to Democratic U.S. Senator Hollings. Then, Copps was an Assistant Secretary in the Commerce Department. IOW, very used to dealing with federal statutes and courts.

Most relevantly, Copps became a commissioner of the FCC in 2001. Cops served as a commissioner of the FCC for a total of 10.5 years. When Obama took office, he chose Copps as acting head of the FCC until Genachowski could be formally nominated and confirmed. Copps served as acting head of the FCC for six months.

In 2011, Copps distinguished himself by being the only FCC Commissioner to vote against allowing giant Comcast to join with NBC Universal. Said Copps at the time:

In sum, this is simply too much, too big, too powerful, too lacking in benefits for American consumers and citizens.... I would be true to neither the statute nor to everything I have fought for here at the Commission over the past decade if I did not dissent from what I consider to be a damaging and potentially dangerous deal (..) At the end of the day, the public interest requires more-much more-than it is receiving. The Comcast-NBCU joint venture opens the door to the cableization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.

http://en.wikipedia.org/wiki/Michael_Copps

FYI, Wiki is not clear about how long Copps served on the FCC in all, but about 10.5 years is correct. http://www.fcc.gov/leadership/michael-j-copps

Truth #2 The FCC can act further on net neutrality without further legislation by Congress.

Here is a link to the article written by Copps entitled, The Buck Stops With the FCC. http://benton.org/node/172880 The article was published January 22, 2014, after the decision in Verizon v. FCC, and before either of the statements by FCC Head Wheeler referenced above.

Former FCC Commissioner Copps' article states, among other things, that the FCC can legally re-classify broadband providers to common carrier without more legislation by Congress and should do so.

http://benton.org/node/172880

In light of Copps' intelligence, experience in government in general, and as FCC Commissioner and Acting FCC Chief in particular, I cannot imagine anyone much more qualified to make that determination.

Some may object that Copps is not a lawyer. Fair enough, which brings me to Tim Wu.

Tim Wu is not merely a lawyer, but a law professor at Columbia University in the fields of internet, media and communications. He wrote The Master Switch (2010) and Who Controls the Internet (2006), and Net Neutrality, Broadband Discrimination (2002) And, he is a former legal adviser to the FCC.

http://www.law.columbia.edu/fac/Tim_Wu and http://www.newyorker.com/online/blogs/elements/2014/04/the-end-of-net-neutrality.html

In a post at The New Yorker (link above), Wu accused President Obama of having broken firm campaign promises about net neutrality. The post was made the day after Wheeler's April 23 statement about not promulgating new net neutrality rules after all. Some DUers have suggested that the article did not mention the court ruling, which is true. However, looking at the timing of Wu's article--less than a full day after the news of Wheeler's plans hit the media--and Wu's own credentials, it seems almost bizarre to contemplate that Wu was not familiar with the January Opinion when he posted the article in April.

Some DUers also thought that Wu should have offered the FCC, an arm of the federal government, advice on how to get around the January Opinion. I hope this post and the sources cited in make very clear that there was nothing in the January 14 Opinion that the the FCC had to get around before beginning a new rulemaking process to re-classify broadband providers as common carriers and to adopt net neutrality rules. (The LAT article linked to above also states that as one of the three options that the Court left the FCC.)

I must acknowledge that it was DUer villager who brought the Wu/New Yorker post to the attention of DU by posting about it in an OP.

http://www.democraticunderground.com/10024866734

I acknowledge as well DUer Koko, who began a very informative thread urging our activism in this matter. (Our activism in this matter is another reason for this post: if you believe the mischaracterizations of the Opinion, you may not even try activism.)

http://www.democraticunderground.com/10024874164

Commissioner Copps' article, link above, also urges our activism and provides us with a petition that we can sign if we wish. (I have mixed feelings about internet petitions, so I am only letting you know that it's in the article.)

While I have not yet read the thread begun by DUer Ichingcarpenter, I include it here because some DUers have argued that we should be looking forward to a future with tiers; and I strongly disagree. Therefore, I liked the title of the thread and, sight unseen, I have confidence in DUers to produce a great thread. http://www.democraticunderground.com/10024873446 ("Why you don't want tiered Internet costs.&quot

Other Truths?

Other statements posted in various threads deal with whether or not the FCC and/or Obama bear any blame/responsibility for the current state of affairs. Those determinations may or may not be subjective, but they will be a lot more controversial than this thread should be, especially if people actually look at the writings to which I have linked. So, I prefer not to address issues of blame in this post, but may (or may not) do a separate post on that subject.

For purposes this post, suffice to say that the FCC had the option of proceeding to a rulemaking process without additional action by Congress, but the FCC chose tiers instead.