Wednesday, December 02, 2015

Oyez! Oyez! Oyez!: The Court Hears the Open Internet Case

If you’re at all interested in communications law and policy, and you don’t know that the oral argument in the Open Internet case will be held this Friday, December 4, then…well, I won’t even say it.
In any event, I bet 95% of you reading this now, do know.
And you almost certainly know that I oppose the FCC’s action in February of this year adopting new mandates governing the practices of Internet service providers. I especially object to that part of the Commission’s order classifying Internet providers as common carriers under Title II of the Communications Act. This allows them to be regulated in much the same way as railroads in the 19th Century or Ma Bell in the 20th Century. Most, but not all, of the FSF-affiliated scholars share my opposition to various aspects of the FCC’s Open Internet order on either policy or legal grounds, or both.
Over the last decade – yes, that’s how long the “net neutrality” since rebranded “Open Internet” fight has been going on – Free State Foundation scholars have published literally hundreds of book chapters, law review articles, academic papers and shorter pieces and blogs on the subject. Trust me, literally means literally.
If you want to prep for the December 4 oral argument, you can find these pieces on our website under the Publications tab or on our blog site.
Here – especially for the benefit of busy reporters and our other friends in the press – I only want to highlight and link to a very few of our Free State Foundation papers published this year that address the FCC’s Open Internet order. Beneath the link to the entire work, there is an excerpt from each. Each of these pieces provides insights into various aspects of the FCC’s decision that may well be discussed this Friday.   

  • Challenging the FCC’s Unlawful Open Internet Order, Justin (Gus) Hurwitz, August 13, 2015. (This Perspectives from FSF Scholars reviews an amicus curiae brief submitted by the International Center for Law and Economics and economics and administrative law scholars, including myself.)

“The brief’s basic argument is that the Order would expand the FCC’s authority far beyond what the Communications Act permits. This follows both because the FCC is asserting a massive expansion of its regulatory authority to encompass basically the entirety of the Internet, and because of the lengths to which the Commission must go in crafting its Order, picking and choosing among statutory provisions on the one hand and disclaiming various effects of the Order on the other. All in all, the brief demonstrates that the Commission has created a “Frankenorder” that bears no resemblance to Congressional intent.”

“As I discussed in Part I, a good case can be made that the Commission did not support adequately its reversal of policy regarding classification of Internet services, ‘when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy.’ And, as shown in Part II, it is arguable that President Obama’s explicit ‘asks,’ coupled with the agency’s abandonment of its primary proposal in the rulemaking notice, may cause courts to be less deferential than they otherwise would be if they consider political considerations to have trumped the Commission’s exercise of its supposed expertise. Either of these two lines of argument, separately, could mean the Commission’s order is not accorded Chevron deference or any deference, however denominated. Taken together, the chances that the FCC’s Open Internet order may not pass judicial muster are further increased.”

“Of the many potential land mines lurking in the Open Internet order, perhaps the most surprising is the Commission’s assertion of jurisdiction over interconnection agreements….[T]he 2014 Notice of Proposed Rulemaking tentatively concluded that the Open Internet rules should not affect agreements for the exchange of traffic between networks. Although the Commission invited comments on this conclusion, Chairman Tom Wheeler explained during the comment period that interconnection is ‘not a net neutrality issue’ and a Commission spokesman clarified that ‘[p]eering and interconnection are not under consideration in the Open Internet proceeding.’…In part because of this about-face, the interconnection provisions may be one of the portions of the Open Internet order most vulnerable to reversal on judicial review.”

“The Commission delegated authority in the ‘Open Internet Order’ to its Enforcement Bureau staff to enforce the new general conduct rule. This open-ended provision leaves agency bureaucrats with virtually unbridled discretion to penalize regulated parties for conduct the parties have no way of knowing in advance is prohibited. It doesn’t take an expert steeped in the Magna Carta’s history or our American rule of law norms to understand the problematic nature of this essentially standardless rule, which by its very nature invites arbitrariness and favoritism in its exercise.”

“Correspondingly, in reviewing agency action under the APA, a court is obliged to ensure that the agency record before it is adequate for judicial review. If that record is inadequate – if some material basis for the agency’s decision is not in the record – the court must remand the agency’s rule. All of which begs a few questions: Are net neutrality-favoring arguments made in secret White House meetings relied upon by the Obama Administration, and relied upon in turn by an agency that adopts the Administration’s position in full, adequately public? How might the D.C. Circuit, which will be hearing oral arguments on the net neutrality rule on December 4, adequately consider the quality of the agency’s reasoning in such a case?

The FCC and its advocates would likely laugh off an argument that a reviewing court might deem this agency record inadequate, pointing to literally millions of comments from the public, and the largest docket in the FCC’s history. But the one comment that was indisputably the most important to the agency in promulgating its final net neutrality rule was the product of a clandestine process that was in many ways the opposite of the transparent one that the APA requires. Under the APA, just one needle supporting the agency’s final rule can sometimes be enough, regardless of the size of the haystack. But here, this particular needle is not in the haystack at all.”

[NOTE - Professor Armijo said this in his FSF Perspectives: “Regardless of which side of the merits of the net neutrality debate you happen to fall on – and, in the interest of disclosure, if pressed, I personally would likely conclude that some form of net neutrality rules are a net benefit for Internet users, a view in contrast to that expressed by most Free State Foundation scholars – you should find this level of politicization of an independent agency rulemaking deeply troubling.”]

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The judicial appeal from the FCC’s Open Internet order certainly is one of the more important communications law and policy cases in the last half-century. The appeal involves fundamental questions regarding the extent of the FCC’s authority under the Communications Act to regulate in a public utility-like fashion important parts of the Internet ecosystem – the Internet service providers – and possibly the entire ecosystem, including the so-called “edge providers” like Google, Yahoo, and Facebook. And depending on the outcome of the judicial review, and the actions of a majority of present or future Commissioners, such regulation possibly could extend considerably beyond the messaging services of these Internet companies.

There are also important issues relating to compliance with Administrative Procedure Act requirements and the strictures of the First Amendment’s free speech guarantee.

In my view, the Open Internet order’s lawfulness ultimately may be determined by the Supreme Court. But, in the meantime, fasten your seatbelts: For come the morning of December 4, the U.S. Marshall will call out: “Oyez! Oyez! Oyez! All persons having business before this Honorable Court are admonished to draw near and give their attention, for the Court is now sitting. God save the United States and this Honorable Court."