With FCC done, Internet neutrality goes to court

When the Federal Communications Commission published the full text of its Open Internet rules last week, it set off the final countdown toward legal assault that has been inevitable for months. The lawsuits can begin once the rules are published in the Federal Register, which should happen as soon as this week, setting off what both supporters and critics of the FCC hope will be the last chapter in a decade-long struggle over federal regulation of the Internet.

Lawyers for the opponents—mostly large telecoms and their trade organizations—are currently poring over the 300-plus pages of rules looking for the basis of their lawsuits. The anti-FCC forces won’t say exactly what strategy they will take. “Given the order’s many glaring legal flaws, they will have plenty of fodder,” predicted FCC Commissioner Ajit Pai in his official dissent. Here’s a guide to the legal case against the FCC’s new rules. Does any telecom company actually want to lead this fight?

One open question is where the lawsuit will come from. AT&T responded to a question about its plans for legal action with a statement saying it was “confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts.” Verizon and Comcast declined to comment.

Two people who have been following the debate say the challenge is likely to come from a trade group, not an individual company, because net neutrality has become such a charged issue that no one wants to the be face of its destruction. When it became clear that harsh rules were likely last fall, even opponents of net neutrality began grumbling about Verizon for filing the lawsuit that forced the FCC’s hand. Comcast is asking the FCC to approve its merger with Time Warner Cable, and suing the commission at the same time would be supremely awkward.

The core issue will be the same no matter who files the suit, says Harold Feld, senior vice president at Public Knowledge, an advocacy group that supports the FCC rules. What happens from here on out will center on the decision to reclassify broadband as a telecommunications service under Title II of the Communications Act. Can the FCC explain its broadband flip-flop?

Thirteen years ago, of course, the FCC classified broadband as an information service, giving it much less regulatory power. The FCC’s lawyers will have to convince a court that it had good reason to change its mind. Internet providers argue that not much has changed over this period: People still buy their broadband access from a company that maintains a network, often receiving an e-mail address and other services that go beyond simple connectivity.

But the FCC sees everything beyond the pipes as insignificant now; consumers just want a connection to seek out whatever online services they choose. “The nature of the offer is different, and the way people use it is different, that’s the essential thing,” says Feld. “When you clear off the rubbish, that’s what the court is going to decide.” What if it all comes down to boring procedural stuff?

One lawyer’s rubbish, of course, is another’s juicy legal vulnerability. Opponents of the rules think they have a number of approaches available for their challenge, including procedural issues. Geoffrey Manne of the International Center for Law & Economics says that the FCC didn’t give sufficient notice about its intention to reclassify Internet service and regulate interconnection agreements between Internet providers and content companies.

“It’s mind-numbingly boring,” he says, “but exactly the sort of thing on which agency rules founder all the time.” Manne also argues that the rules could be found arbitrary and capricious, since the FCC hasn’t sufficiently laid out the basis that there is real harm caused by the lack of net neutrality rules.

An FCC spokesman said the agency held multiple roundtables and collected many comments discussing reclassification and interconnection. Every prominent opponent of reclassification made the case against the action in their official comments. The FCC also noted that the federal court that ruled against the previous order acknowledged that broadband providers have economic incentives and technical capabilities that represent a threat to Internet openness.

Much of the public debate in recent weeks has centered on the FCC allegedly claiming more authority than it actually has, a move critics see as a power grab cloaked in legalese. In Pai’s dissent, for instance, he criticizes the FCC’s refusal to relinquish certain powers afforded to it under Title II. Because it hasn’t done this, he says, the FCC has given itself the power to regulate the rates Internet providers can charge, the right to levy new Internet taxes, and other wide-ranging powers.

The FCC has disputed this characterization. Even if it were true, says Feld, an agency asserting power it has been given under the law can’t be illegal. “That’s a policy argument,” he says. “Go to Congress and get that reversed.”