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Title II Foes Launch Full-Court Press

Cable, Telco ISPs Say fight with FCC is about authority, not neutrality 4/20/2015 8:00 AM Eastern
TakeAway

Title II faces likely years of legal challenges, which last week began in earnest — and in the U.S. Court of Appeals for the D.C. Circuit.

WASHINGTON — The punches had been telegraphed, but they came in a flurry last week as the cable and telco industries made good on threats to sue the Federal Communications Commission over its Title II decision.

 

Five years ago, cable operators and all but Verizon Communications on the telco side stayed out of that fight, essentially agreeing to accept rules they said were unnecessary — no blocking or unreasonable discrimination — for fear of the alternative: reclassification of their service under as a common-carrier telecom service under Title II of the Telecommunications Act.

 

Their fears were realized last week with the publication of the FCC’s Title II order in the Federal Register, which triggers their effective date 60 days hence and brought on the flurry of suits.

 

‘CHEVRON’ MIGHT NOT HELP

 

The courts generally grant federal agencies Chevron deference in interpreting how to enforce laws, but the court that will be hearing these claims — the U.S. Court of Appeals for the D.C. Circuit — has already rejected FCC Internet-neutrality actions twice.

 

The first time was a 2008 FCC decision against Comcast’s management of traffic generated by the Internet file-sharing application BitTorrent over its network, in which the court ruled the FCC was trying to enforce guidelines as though they were regulations.

 

The second instance was last year’s conclusion in Verizon vs. FCC that the commission’s 2010 rules were insufficiently justified and smacked too much of an absolute ban.

 

Cable operators and telcos will have to convince the court that the FCC’s latest approach, which the agency said was consistent with court instructions in the Verizon decision, was arbitrary and capricious. They will argue, in part, that the FCC did not give stakeholders a chance to comment on the pivot from rules based on its authority under Section 706 (of the 1996 Telecommunications Act) to promote broadband to rules that reclassify Internet providers as common carriers.

 

Lining up against the FCC at press time last week were the National Cable & Telecommunications Association, the American Cable Association, CTIA: The Wireless Association, AT&T and the trade group USTelecom. That just about licks the platter clean when it comes to aggrieved parties, as those groups represent AT&T, Verizon, wired and wireless providers, as well as cable operators large and small.

 

“This appeal is not about net neutrality but the FCC’s unnecessary action to apply outdated, utility-style regulation to the most innovative network in our history,” NCTA president and CEO Michael Powell said in announcing the suit last week. “The FCC went far beyond the public’s call for sound net-neutrality rules. Instead, it took the opportunity to engineer for itself a central role in regulating and directing the evolution of the Internet.”

 

Powell said: “We believe that the FCC action basically undermines if not destroys a distinction that Congress codified and alone can change in which it intended that services defined as information services would not be subjected to Title II.”

 

The law was clear that acquiring, storing and processing information via telecommunications was an information service, Powell said. “We believe you could not write a clearer definition of what information Internet access service is than that,” he said. “When they purchase information access, they get the ability to interact with information. A federal agency is not allowed to rewrite an act of Congress.”

 

The NCTA and others filing suit all emphasized that Congress needs to step in to clear up what they suggested was the FCC’s errant call.

 

Republicans have introduced legislation that would essentially uphold the no-blocking and paid prioritization rules, but would preclude reclassifying ISPs under Title II and would narrow the Section 706 authority the FCC has been using to justify a host of broadband-boosting moves.

 

Narrowing Section 706 authority is a non-starter with Democrats, but Powell told Multichannel News last week that the NCTA wound not oppose tgaking that language out, and he thought the industry wouldn’t oppose it either.

 

HIGH-POWERED LEGAL HELP

 

The NCTA has retained a couple of high-powered lawyers, and something of a shadow solicitor general’s office, to make its case. Representing the cable association are former U.S. Solicitor General Theodore Olson and former assistant to the solicitor general Miguel Estrada. Estrada has become something of a go-to attorney for media companies before Washington courts. Olson has been on the case for three or four weeks, said Powell.

 

Estrada has said the case turns on critical principles of administrative law and the FCC’s fundamental misapplication of the statute.

 

Elsewhere last week, Republicans launched a move to block enforcement of the new rules, but that is a long shot and more a shot across the bow (see box). Asked if NCTA supported that move, Powell said it was not “playing” in that space and was focusing instead on bipartisan legislation.

 

Neutralizing Net-Neutrality Regs

 

WASHINGTON — Rep. Doug Collins (R-Ga.) has introduced a resolution of disapproval that, if passed by both the House and Senate and not blocked by the president, would invalidate the Federal Communications Commission’s new network-neutrality order, which takes effect 60 days from April 13, the day it after was published in the Federal Register.

 

That is the same deadline lawmakers face to pass the resolution and get it signed by President Obama.

 

The resolution is a fast-track method of overturning federal agency regulations, but would almost certainly need a two-thirds supermajority to survive the almost certain veto by a president who strongly backed that order and its reclassification of Internet access as a Title II telecom service.

 

Echoing the sentiments of many Republicans, Collins said, “The FCC is proposing a federal takeover of the Internet, adding layers of slow-moving bureaucracy to high-speed communications.”

 

Collins said the FCC’s new rules “will impose new Internet restrictions, stifling technological innovation and economic growth.”

 

Co-sponsoring the resolution are Republican Reps. Bob Goodlatte, Steve Chabot, Lynn Westmoreland, Glenn Grothman, Bob Latta, Bill Posey, Rick Allen, Ryan Zinke, Barry Loudermilk, Sam Johnson, Dennis Ross, Buddy Carter and Vern Buchanan.

 

Demand Progress, which is a big backer of Title II reclassification, offered up a warning.

 

“Doug Collins should think twice before he bucks the will of millions of Americans — and 85% of Republicans — by working to let ISPs shove most websites into slow lanes,” the group said. “His resolution is the latest attempt by the Big Cable industry and the members of Congress who do its bidding to roll back protections that will allow the public, innovators, and small businesses to benefit from an open Internet.“

 

Those “Big Cable” players have said they are not interested in fast and slow lanes, are willing to abide by rules, just not with Title II reclassification. They have argued that the FCC’s Title II approach could chill investment and wind up morphing into case-by-case rate regulation by degrees.

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