FCC Net Neutrality Rollback Appears as Advertised, Clarifies Court Timing as Challenges Coming

The FCC's net neutrality deregulation ruling and orders closely track expectations, while clarifying the agency's view on the timetable for looming court challenges, according to our initial review of the 539-page item released Thursday evening (see 1801040059). The final "internet freedom" declaratory ruling, report and order, and order text appears mostly the same as a draft (see 1711220026). Several changes -- on transparency decisions and the item's effective date -- were announced when commissioners voted 3-2 along party lines Dec. 14 to scrap Communications Act Title II broadband classification and net neutrality rules (see 1712140039). Tech heavyweights said they will join the inevitable court challenge to the regulations.

Final modifications include "revising the effective date of the item to allow a smoother transition, clarifying the timeline for filing petitions for reconsideration or petitions for judicial review, providing additional description of the internet interconnection market, and eliminating reference to unnecessary statutory provisions regarding the legal authority for the transparency rule," said an FCC spokesman. The item's effective date won't occur until the commission publishes a notice in the Federal Register announcing Office of Management and Budget approval of revised information-collection duties for broadband ISPs, a process officials previously said was expected to take months.

The item ordered the period for filing challenges in court and reconsideration petitions at the FCC to begin on the date that an FR summary of the ruling and orders is published, likely to take weeks. Given questions about possible differences in the judicial timetable for challenging declaratory rulings and rulemaking orders, there has been speculation some litigants might file court petitions within 10 days of the release of the order to protect rights to influence venue selection (see 1712240001).

Clarification means such protective petitions likely would be premature, experts told us, though some said it was still possible they would be filed. “This FCC says in the final ordering clause of the order (para 359) that the period in which to seek judicial review of all parts of the order will commence on publication in the Federal Register," emailed Harris Wiltshire Attorney Chris Wright, an ex-FCC general counsel. "The applicable rule -- 47 CFR 1.4(b) -- is arguably unclear about that, but the FCC’s application of its rule is entitled to deference, so that statement ought to settle the question.”

The order "probably" settles the timing of filings, "but people will have to think this through," said Georgetown Law Institute for Public Representation senior counselor Andrew Schwartzman. "Protective petitions always can be filed, but I suspect that a court may not look favorably on this if it is just a strategic way to force a venue choice," said Stuart Brotman, University of Tennessee law professor. Asked if the issue were settled, another ex-FCC general counsel emailed: "I think practically yes (although technically no)." While parties may still file protective petitions, the lawyer said, "that seems less likely now."

Challenges

The Internet Association plans to "intervene in judicial action" to roll back FCC repeal of net neutrality rules. Tech companies plan a continued "push to restore strong, enforceable net neutrality protections through a legislative solution," said IA CEO Michael Beckerman. Netflix said it will join IA as intervenor, and tweeted: "The Internet is united in defense of net neutrality. As for the FCC, we will see you in court." Consumer advocates and state attorneys general said they'll challenge the agency actions, and others could join. Most believe the FCC has the upper hand, but critics remain hopeful (see 1712210012).

Sen. Ed Markey, D-Mass., “cannot introduce” his planned Congressional Review Act bid to undo the FCC’s rescission order until after the commission publishes the order in the FR or transmits it to Congress, whichever occurs later, an aide told us: It’s “unknown when that will happen.” Markey tweeted Thursday that “we know the only way to ensure a free Internet is to restore #NetNeutrality, and that’s exactly what we’re fighting to do.” Markey announced Tuesday he had almost enough support to clear a procedural hurdle to allow a Senate vote on the legislation (see 1801030051).

Markey views Sen. Susan Collins, R-Maine, as a strong potential supporter for the CRA resolution since she's “already on record as being opposed” to the FCC’s action, and he intends to talk with other Republicans “to garner support” for the proposal, a Markey aide said. Collins said last month she would “have to look at the specifics” of Markey’s resolution before committing to support it (see 1712220036). A Democratic aide and a telecom lobbyist tipped other Republican senators who could be potential “swing” supporters of the CRA resolution: Bob Corker, Tenn.; Orrin Hatch, Utah; Dean Heller, Nev.; and John McCain, Ariz. Their offices didn’t immediately comment.

The FCC beefed up its text on ending its Title II oversight of internet interconnection (internet traffic exchange), more than doubling the length of the section (paragraphs 163-173) with new explanations, justifications and citations. Some parties say the regulatory withdrawal could invite renewed problems in a key market segment over time as broadband providers use network leverage to extract concessions from others (see 1712120015). But the commission said competitive constraints are strong -- including from powerful edge providers such as Google, Netflix, Facebook and Amazon -- and government antitrust and consumer protections remain.

Further references to the record in the proceeding also were added to the text as justifications for FCC decisions. Consistent with Administrative Procedure Act obligations, "the Commission focused its review of the record on the submitted comments that bear substantively on the legal and public policy consequences of the actions we take today," said paragraph 344. "Our decision to restore Internet freedom did not rely on comments devoid of substance, or the thousands of identical or nearly identical non-substantive comments that simply convey support or opposition to the proposals" in a May NPRM. "We reject calls to delay adoption of this Order out of concerns that certain non-substantive comments (on which the Commission did not rely) may have been submitted under multiple different names or allegedly 'fake' names," added paragraph 345: Such comments "in no way impeded the Commission’s ability to identify or respond to material issues in the record."

The FCC added text after Chief Technology Officer Eric Burger reportedly warned elimination of no-blocking and no-throttling rules could be problematic. Burger then said right before the vote that he supported the item after clarification (see 1712140015). An FCC spokesman said the added language was in paragraph 265: "In the event that any stakeholder were inclined to deviate from this consensus against blocking and throttling, we fully expect that consumer expectations, market incentives, and the deterrent threat of enforcement actions will constrain such practices ex ante. To the extent that these incentives prove insufficient and any stakeholder engages in such conduct, such practices can be policed ex post by antitrust and consumer protection agencies."

FTC

The FTC could be one such agency.

The FTC's "deep expertise" in evaluating harm to competition and consumers positions the agency to effectively monitor a "diverse range of tech-heavy industries," acting FTC Chief Technologist Neil Chilson blogged. Internal expertise and ability to coordinate closely with outside experts and other government agencies enables the FTC to evaluate the effects of company practices on consumers and the competitive process, Chilson said Thursday.

Friday, the trade commission filed a letter with the 9th U.S. Circuit Court of Appeals saying the FCC net neutrality order "moots AT&T's argument" in FTC v. AT&T Mobility that the communications commission's previous 2015 Title II order "stripped the FTC of authority." The new order highlights the "regulatory gap" that would result from AT&T's interpretation of the common carrier exception, said the FTC. "In other words, the FCC intended that the FTC would have authority to bring cases like this one," the letter (in Pacer) said.

Other Changes, Clarifications

FCC officials said there were few big or unanticipated changes. Many were wording tweaks.

The text contained two changes Commissioner Mike O'Rielly highlighted Dec. 14, including a clarification that FCC pre-emption of state and local broadband regulation includes "any state laws" on broadband disclosure of network management practices that are inconsistent with the commission's transparency rule (footnote 729). It also removed Section 218 and Title III as legal grounds for the transparency rule.

Commissioners O'Rielly and Mignon Clyburn added considerably to the final statements they gave Dec. 14, with Clyburn attaching the entire text of the 2015 Title II net neutrality order. The statements of Chairman Ajit Pai and Commissioner Jessica Rosenworcel appeared to be the same, while that of Commissioner Brendan Carr contained some additional antitrust comments.

"There are no big surprise changes in the final order," agreed TechFreedom President Berin Szoka. The biggest change was that the order's procedural clarifications remove the need for "premature" lawsuits to preserve legal rights: “Still, don’t be surprised if someone does sue immediately, just to keep the cycle of outrage alive, and donations flowing in.”

Net Neutrality Notebook

A Democratic Nebraska state senator introduced a net neutrality bill Friday. LB-856 would ban fixed and mobile ISPs from impairing or degrading lawful Internet traffic “on the basis of content, application, or service or use of a non-harmful device, subject to reasonable network management.” It would ban paid prioritization and unreasonable interference with users’ ability to use or edge providers’ ability to make lawful content, devices, services and applications.

In the District of Columbia, the D.C. Council Government Operations Committee plans a Jan. 24, 11 a.m. public roundtable on a resolution condemning the FCC rescinding Title II regulation. That's what committee Chairman Brandon Todd (D) tweeted Thursday. Other legislatures will open 2018 sessions with Democrat-sponsored net neutrality bills (see 1801030023).