Wireless Zoning Case Could Mean Revisiting Chevron Doctrine, Net Neutrality

The U.S. Supreme Court’s decision to hear a case challenging a 2009 FCC wireless zoning shot clock order may have much bigger implications for the commission and other regulatory agencies, lawyers and analysts said this week. The court granted cert Friday (CD Oct 10 p15) in Arlington, Texas, v. FCC, in a case that could mean high court review of the broader Chevron doctrine. The doctrine requires federal courts to defer to an agency’s interpretation of a statute, as long as that interpretation is deemed “reasonable.” The doctrine dates to a 1984 case, Chevron U.S.A. v. Natural Resources Defense Council.

The court’s agreeing to hear the case has “ominous” overtones for the FCC, said Precursor President Scott Cleland, who has opposed commission rules like the 2010 net neutrality order and is also chairman of ISP-backed NetCompetition.org. “I believe this presages that the Supreme Court will decide next year that regulatory agencies cannot be the effective final arbiter of their own power and jurisdiction under the law, because that constitutional power rests with Congress and the courts,” Cleland wrote on his blog (http://xrl.us/bnto8f). “FCC-watchers know that ‘Chevron’ has been an amorphous source of exceptional grey-area legal power that the unelected FCC commissioners frequently have tapped into in order to self-augment their perceived power to accomplish its many policy goals.” Cleland said the FCC “probably needs very generous Chevron deference,” if the net neutrality order is to survive a pending challenge in the U.S. Court of Appeals for the D.C. Circuit.

But John Nakahata, a telecom lawyer at Wiltshire & Grannis and former FCC chief of staff under William Kennard, cautioned against making too much of the Supreme Court’s decision to take the case. “There is no doubt that a Supreme Court decision on whether Chevron applies to an agency’s interpretation of an ambiguous statute in determining it own jurisdiction will be significant. This is especially true as the FCC has had to struggle to apply a pre-Internet statute to the post-Internet world,” Nakahata told us. “But one can also read too much into the Supreme Court’s decision to take the case. On this question, the lower appellate courts had split, which made it much more likely for the Supreme Court to take the case. The Supreme Court has also strongly advanced Chevron, including most recently according deference to agency amicus briefs."

"This case is much bigger than the FCC,” said communications lawyer Andrew Schwartzman. “Chevron deference is the centerpiece of how courts analyze federal agencies’ statutory interpretations. Academics and courts endlessly debate Chevron, and the Supreme Court has repeatedly revisited Chevron issues, often splitting in ways that cut across normal liberal/conservative lines. While I agree with Scott Cleland that this case will affect cases where the issue turns on FCC jurisdiction, I must add a cynical note. There is enough wiggle room in the Chevron doctrine that lower courts can often justify the outcome they prefer. While I would say that it is somewhat more likely than not that the FCC will lose this case in the Supreme Court, I don’t think it would necessarily presage a major turning point in trimming the FCC’s jurisdictional claims because lower courts will still find a way to come out in favor of the FCC if they want to do so."

Schwartzman, a net neutrality supporter, questioned whether the case has many implications for whether the D.C. Circuit will uphold the 2010 order. “The FCC always had an uphill battle,” he said. “Thus, a loss in the City of Arlington case is unlikely to have a significant impact on the FCC’s chances."

Free State Foundation president and ex-FCC associate general counsel Randolph May agreed with Cleland that the zoning challenge has net neutrality implications. “The court’s decision could well impact the sustainability of the FCC’s net neutrality order, because the agency was certainly acting at the outer bounds of its jurisdictional authority,” May said. “The court has never decided whether an agency’s decision concerning its own jurisdiction is entitled to Chevron deference. This could be that case and, if so, it will have important implications for all agencies.” A lawyer who represents cities said he also agrees with Cleland. “The only other point I would make is that it will not be limited to FCC,” the lawyer said. “I think there are a lot of other regulations that could be in trouble too."

The case has potentially big implications for tower companies, but more could be in play, Jeff Silva, analyst at Medley Global Advisors, said in a research note. “There are indications the conservative-bent Supreme Court wants this case not only with respect to the FCC shot-clock rule governing antenna siting but perhaps also to address a potentially far-reaching, unsettled legal question regarding the extent to which a federal agency can establish its own jurisdiction,” he said. “In other words, conservative justices on the bench may see an opportunity ... to respond to what they may regard as a systemic problem sometimes called government overreach."

"People sometimes confuse ancillary authority and Chevron deference, which is not a tool that the FCC uses but a precedent for courts that are reviewing agency decisions,” said Free Press Policy Director Matt Wood. “The D.C. Circuit found in the BitTorrent case that the FCC had failed to demonstrate ancillary authority over Comcast’s traffic blocking practices, but said nothing about Chevron. In Brand X, however, the Supreme Court confirmed that deference should be given to the FCC’s reading of definitions in the Communications Act when there is any ambiguity there to resolve. In our view, it’s not ambiguous at all. The FCC has clear authority over the transmission of communications by wire and radio in this country, even as the technologies for access change over time.”

"This case will certainly be interesting,” said Public Knowledge staff attorney John Bergmayer. “But it’s important to realize that the Supreme Court has generally been more likely to defer to expert agencies than the D.C. Circuit, which has built up a somewhat activist jurisprudence.”