What a mess!
I am speaking, of course, of the “deliberation” concerning
FCC Chairman Tom Wheeler’s plans for the FCC to consider adopting a new net
neutrality rulemaking. I put “deliberation” in quotes, in part, because Free
Press is calling on its supporters to “bring pots and pans and
whatever else you can bang on” to make a lot of noise on the FCC’s doorstep.
Well, the “Pots and Pans” strategy is one way of thinking
about what influences the FCC’s decision-making process. And this way of
thinking doesn’t particularly go hand-and-hand with the notion of the agency’s
commissioners calmly trying to figure out how to employ their so-called
policymaking “expertise.”
As regular readers know, it has been my firm position
that, after the DC Circuit’s Verizon decision, absent convincing evidence
of market failure and demonstrable consumer harm, the FCC should not try to
reinstate the net neutrality regulations the DC Circuit tossed out.
Nevertheless, when Chairman Wheeler announced his intent to move forward with
yet another net neutrality rulemaking, this time one based on a “commercial
reasonableness” standard for assessing Internet providers’ practices, I said in
a statement
that “there appear to be elements in his proposal that may mitigate the
otherwise potential harmful effects of unnecessary government intervention.”
I understand the pressures that Chairman Wheeler
apparently felt as a result of the blowback and sloganeering from “consumer
advocacy groups” and even the media. But I wish that he had offered a
principled, consistent defense of his position regarding the commercial
reasonableness standard. Instead, he seemed, at least rhetorically, to back
away from articulating such a defense, rather quickly pivoting to a “get tough”
mode of threatening Internet providers with Title II common carrier regulation -- the regime devised early in the last century to regulate POTS, or "plain old telephone service."
Chairman Wheeler’s noticeable shift to “Title II talk” didn’t
at all mollify the net neutrality advocates. It only further fueled their Title
II fires and calls for pots and pans to bang on.
With almost a decade’s worth – yes, you read that right –
of pieces on the Free State Foundation website
explaining why, at least absent evidence of market failure and consumer harm,
adoption of net neutrality regulation is unwarranted, I don’t want to re-argue
the case here. I just want to suggest two
points for your consideration at this particular moment in time:
First, in my
view, it is not nearly as clear as the pro-net neutrality advocates seem to
believe that Title II classification of ISPs – that is, classifying them as
common carriers – would survive a judicial challenge. Indeed, I think the FCC’s
legal case would be fairly problematic.
While it is true enough that, under established
administrative law principles, an agency may change its mind, it nevertheless
must provide a well-reasoned explanation for such a change. Pointing to the
number of protesters banging on pots and pans outside the FCC’s doors is not
likely to suffice. Neither is pointing to the agency’s disappointment at
already having been twice rebuffed by the DC Circuit under alternative theories.
The main reason the FCC’s case for sustaining a Title II
challenge would be problematic is this: In defending its decision to classify
Internet service providers as information service providers – thereby removing
them from the ambit of Title II regulation – the Commission argued that, from a
consumer’s perspective, the transmission component of an information service is
integral to, and inseparable from, the overall service offering. This
functional analysis of ISPs’ service offerings was the principal basis upon
which the Supreme Court upheld the FCC classification determination in 2005 in its
landmark Brand X
decision.
I don’t think the integrated, inseparable nature of ISPs’
service offerings, from a functional standpoint, and from a consumer’s
perspective, has changed since the Brand
X decision, so it won’t be easy for the Commission to argue that it is
changing its mind about the proper classification based on changed consumer
perceptions of the service offerings’ functionality. And to the extent that the
Brand X Court cited favorably to the
FCC’s claims concerning the then-emerging marketplace competition and the
dynamism in the broadband marketplace, those factors, if anything, today argue
even more strongly for a non-Title II common carrier classification.
I understand the role that so-called Chevron deference can play in upholding agency decisions. Indeed,
it played an important role in the Court’s decision in Brand X. But invoking Chevron
deference won’t relieve the FCC of the need to provide persuasive reasoning in
support of an abrupt about-face on a point the agency litigated – successfully
– all the way up to the Supreme Court.
The second point
I wish to make is this: We have now come to a juncture where – again, assuming
no present convincing evidence of market failure and consumer harm – the FCC
ought to await further direction from Congress. I understand that in Verizon the majority, over a dissent,
interpreted Section 706 in a way that arguably gives the agency authority to
adopt new net neutrality rules, as long as they don’t, as a practical matter,
amount to imposing common carrier obligations on ISPs. And I understand the DC
Circuit’s decision represents the current “state of the law” on the question of
Section 706 authority. But I think Commissioner Michael O’Rielly makes a
persuasive argument – an argument that happens to reflect the Commission’s original position until it did a late switcheroo
– that Congress never intended Section 706 to be interpreted as an affirmative
grant of authority to allow the agency to adopt a net neutrality-like regime.
I’m glad Commissioner O’Rielly articulated his
position at the Free State Foundation’s annual conference.
Now that we’ve come to the present point – the “What a
mess!” point – the FCC ought to give Congress an opportunity to act before
moving forward. After all, the members of Congress actually were elected to
make important policy decisions. In order to agree with me, you don’t have to
believe the FCC couldn’t possibly succeed in adopting new net neutrality
regulations. You simply have to agree that it is a good time for Chairman
Wheeler and his colleagues to exercise a modicum of regulatory humility.