High Court Should Throw Out FCC 2015 Net Neutrality Order as Unconstrained, Berninger Says

The Supreme Court should strike down the FCC's 2015 net neutrality order, said internet entrepreneur Daniel Berninger, who continues to pursue an appeal despite the current commission's rollback of the telecom regulation in that order. Without high court intervention, FCC authority over the internet won't be constrained by Congress or the Constitution, with its chairman effectively "a king," Berninger said at a Hudson Institute event Monday. Most legal experts we have heard from said they doubt justices will grant Berninger's cert petition seeking review of lower court rulings upholding the order (in Berninger v. FCC, 17-498, here), given the recent FCC net neutrality reversal (see 1712140039 and 1801050031). Some say he has a chance.

The previous FCC lacked delegated authority from Congress to issue its 2015 order imposing net neutrality regulation under Title II of the Communications Act, said Berninger, founder of Voice Communications Exchange Committee. The commission had some legal "theories," he said, but whatever lawmakers had in mind about the agency's authority in passing the 1934 Act or its 1996 Telecom Act update, "I don't think it was about the internet." The FCC also ignored a Telecom Act prohibition against regulating the internet, he said.

Berninger said the 2015 order violated free-speech rights, because the First Amendment basically says "government shall not mess with communications." He acknowledged there had been past First Amendment cases about FCC communications regulation, but he said it was "ridiculous" to argue those covered its intervention into the internet. He said the order was also problematic because it betrays "objective reality," akin to the government trying to regulate whether the sun will come up in the morning. Five FCC chairmen, from Michael Powell through Ajit Pai, had asserted various degrees of authority over the internet, he said.

The lack of high court oversight has led to a "Banana Republic mode of operation," Berninger said. Even though the Pai FCC repealed net neutrality regulation, the agency chairman isn't limited by the statute or the Constitution, said Berninger, who noted he's not a lawyer. The chairman becomes a "very powerful person" and "becomes a king," he said. An FCC spokesman didn't comment.

Most seem dubious of Berninger's prospects before the Supreme Court. “It’s very unlikely the Court would want to review an FCC Order that’s already been superseded by the Commission,” emailed Harris Wiltshire attorney Chris Wright, an ex-commission general counsel. Wright was recently on a panel where he and other speakers agreed the high court was unlikely to review cert petitions on the merits, though some suggested the justices could vacate the lower court rulings as moot (see 1712050035). CenturyLink and USTelecom, among other cert petitioners, said in September that if the FCC returned broadband to its "proper" Title I classification, they would file a supplemental brief explaining why the high court should vacate the lower court's affirmations of the 2015 order (see 1709280041). At the request of the DOJ and FCC, the government extended a briefing deadline until Feb. 2 for all respondents.

Free State Foundation President Randolph May is also skeptical of high court review, though he's "sympathetic" to Berninger's First Amendment argument. "I think, as I have maintained for over a decade now, that net neutrality regulations such as those adopted in the 2015 order, raise First Amendment issues with regard to the prohibitions applied to ISPs," he emailed. "The First Amendment issues are the unique part of his appeal that sets it apart from the others. All that said, I think it’s doubtful that the Supreme Court will take up his case now that the FCC has adopted a new regime.”

Others suggested Berninger's efforts shouldn't be dismissed. "It's possible the Supreme Court could decide to take up the issue," emailed Tech Knowledge Director Fred Campbell. "Given the decade-long back and forth between the FCC and the D.C. Circuit, Supreme Court guidance on the First Amendment issue would provide helpful clarification."

"Berninger’s appeal is potentially a huge wildcard, not just for telecom policy, but admin[istrative] law broadly," emailed Doug Brake, telecom policy director of the Information Technology and Innovation Foundation. "A grant of cert is far from certain, and even less clear where exactly the court would go. But from my telecom-policy perspective, beyond possibly vacating the USTelecom case (which the Court could do even if finding the issue moot), there really isn’t an awful lot of upside. We would still need long-term certainty and clarity -- we will only get that through legislation."

Network Neutrality Notebook

FCC Title II reversal is "irrelevant" to AT&T's statutory arguments against FTC oversight of the non-common carrier activities of common carriers, said the carrier's reply (in Pacer) Monday to a trade commission letter (in Pacer) to the 9th U.S. Circuit Court of Appeals in FTC v. AT&T Mobility, No. 15-16585 (see 1801050031). The FTC's concern about a "regulatory gap" is "baseless," AT&T said: "[T]he very disclosures at issue in this case were -- and remain -- 'subject to' FCC regulation. Indeed, the FCC investigated those disclosures and proposed a $100 million penalty under the agency’s transparency rule -- a rule the order upholds. ... [T]he FTC argues that the FCC could not order structural separation to preserve FTC authority over non-common carrier activities. But pursuant to its authority to ensure that license transfers are in the public interest as well as its authority over interstate communications by common carriers, the FCC has previously required structural separation of certain common carrier and non-common carrier services." By undoing Title II broadband classification, the FCC removed a statutory bar to FTC oversight of ISPs as common carriers, but their non-common carrier activities remain in dispute. The 9th Circuit is reviewing en banc a panel decision that sided with AT&T.

This is the year when the open internet battle "pits the three self-proclaimed wise men of the Federal Communications Commission against an overwhelming majority of the American people," blogged Michael Copps, ex-FCC commissioner now an adviser to Common Cause. "Every index I have seen -- be it popular poll, volume of pleas to Congress, or expressions of anger toward the FCC -- makes it crystal clear that we the people want an open internet and an end to ever-increasing monopoly control of our telecom and media markets. Most Americans would agree with the great Justice Louis Brandeis: 'We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.' Nowhere is this so true as in the communications infrastructure upon which our civic dialogue depends. When government itself aids and abets this corporate grab for power, fueled by the outrageous money and the Washington influence of the companies themselves, it is time to call a halt."

The FCC's "restoring internet freedom" order (RIFO) is on strong legal ground, said antitrust attorney David Balto in a paper called "Chevron Deference and Net Neutrality" (here). "It matters little to the courts that RIFO is a change from the Open Internet Order," said an email Monday summarizing the paper. "The Supreme Court has stated that '[a]gency inconsistency is not a basis for declining to analyze the agency's interpretation under the Chevron framework.' All the agency must do is 'adequately explain[] the reasons for a reversal of policy.'" The "RIFO has a good grounding in facts and analysis, or at least good enough to easily pass Chevron muster," the email said. "Generally speaking, the FCC just needs to articulate facts that demonstrate the reasonableness of their interpretation in order to receive Chevron deference."