Public Safety Served by Enterprise Communications Networks, Not Public Utility Regulation

On March 31, AT&T and the FirstNet Authority announced that total connections to the FirstNet nationwide public safety broadband network increased to 7.1 million across 30,000 law enforcement and first responder agencies during the first quarter of 2025. FirstNet was constructed and is operated by AT&T, and it is overseen by FirstNet Authority, an agency in the NTIA.

As explained in my February 2024 blog post, "FirstNet's Public Safety Communications Network Continues to Grow,"widespread adoption by law enforcement and first responder agencies of FirstNet – as well as competing enterprise networks, such as VerizonFrontline and T-Mobile's T-Priority – undermines the Biden FCC's public safety rationale for its now-vacated public utility regulation of broadband Internet access services. 

 

In the Securing and Safeguarding the Open Internet Order (2024), the Commission officially rebranded public utility regulation as a public safety measure. Public utility regulation has a long history. However, the idea that public utility regulation was vital to public safety and national security appears to have been entirely unknown until late 2023, when the Biden FCC launched its efforts to impose such regulation on high-speed broadband Internet services under Title II of the Communications Act. What a coincidence!

 

The Securing and Safeguarding the Open Internet Order was vacated by the U.S. Court of Appeals for the Sixth Circuit on January 2 of this year. In MCP No. 185 (2025), the court concluded that broadband Internet services are best understood as lightly regulated "information services" under Title I of the Act and not "telecommunications services" under Title II.

 

On April 28, the Free State Foundation filed reply comments in the FCC's Delete, Delete, Delete proceeding. In those reply comments, FSF President Randolph May and I recommended that the newly constituted FCC, under Chairman Brendan Carr's leadership, delete the now-vacated public utility rules from the Code of Federal Regulations. FSF's reply comments also recommend that the Commission delete many other outdated, harmful, and unnecessary regulations of communications services and close proceedings in which the agency previously had recommended additional regulations. FSF's initial comments in the Delete, Delete, Delete proceeding – focused on outdated, harmful, and unnecessary regulations of video services – were filed on April 11.

Court Sets Aside FCC's New Title II Order

On January 2, the U.S. Court of Appeals for the Sixth Circuit issued a decision on the merits in MCP No. 185. The three-judge panel's decision set aside the FCC's 2024 Securing and Safeguarding the Open Internet Order. The court wrote:   

Using "the traditional tools of statutory construction," id., we hold that Broadband Internet Service Providers offer only an "information service" under 47 U.S.C. § 153(24), and therefore, the FCC lacks the statutory authority to impose its desired net-neutrality policies through the "telecommunications service" provision of the Communications Act, id. § 153(51).

The Sixth Circuit's decision in MCP No. 185 presents a straightforward reading of the Communications Act. It thus reaches a relatively easy conclusion that broadband Internet access services are best understood as fitting the definition of lightly regulated "information services" under Title I of the Act. This decision is welcome because it means that innovative broadband networks will remain free from unjustifiable public utility regulation that Congress never authorized. 

The Sixth Circuit's opinion is refreshing because it shows how the traditional tools of statutory interpretation can be used to resolve even seemingly technical questions like the regulatory classification of broadband. It's the type of decision that eluded us so long as lower courts were subject to the "Chevron doctrine" and effectively required to rationalize even far-fetched agency interpretations or re-interpretations of supposed ambiguous statutory provisions. 

The Sixth Circuit's commendable decision was made possible by the Supreme Court's overruling of the "Chevron doctrine" in its 2025 Loper Bright Enterprises v. Raimondo decision, which signaled a return to principles of judicial review based on the best reading of statutes rather than elastic deference to regulatory agencies. 

 

The August 2024 stay order issued by a different Sixth Circuit panel in an earlier stage of the litigation presented a persuasive analysis that the FCC's order is contrary to the Supreme Court's Major Questions Doctrine. However, the merits panel's decision that was issued on January 2 rightly takes a first-things-first approach by concluding the FCC's order exceeded the terms of the Communication Act. Recourse to the Major Questions Doctrine is unnecessary to reach that conclusion. 

 

P.S. In December 2023, the Free State Foundation filed public comments with the FCC opposing the agency's proposed Title II reclassification decision. And in January 2024, the Free State Foundation filed reply comments in the Commission's Securing and Safeguarding the Open Internet proceeding. Those comments and reply comments predated the Supreme Court's decision in Loper Bright. For a defense of the Loper Bright decision, see FSF President Randolph May's July 2024 Perspectives from FSF Scholars, "Chevron's Demise Re-Aligns Administrative State With Founders' Vision."

Chevron Undermined Legal Stability, Loper Bright Will Help Restore It

On December 27, Free State Foundation President Randolph May published "Demise of Chevron Deference Promotes Regulatory Certainty," a Perspectives from FSF Scholars. In the Perspectives, President May defended the Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo – which overturned the "Chevron doctrine" – against the claim that the decision would undermine stability or certainty in the law and undermine economic activity such as that private investment. 

In reality, the "Chevron doctrine" that required courts to defer to agency interpretations of statutory terms claimed to be ambiguous created a tremendous lack of stability and uncertainty in the law. 

 

To reinforce the points made in President May's Perspectives, the opinion of the court in Loper Bright is worth quoting: 

Nor has Chevron been the sort of "'stable background' rule" that fosters meaningful reliance. Post, at 8, n. 1 (opinion of KAGAN, J.) (quoting Morrison v. National Australia Bank Ltd., 561 U.S. 247, 261 (2010)). Given our constant tinkering with and eventual turn away from Chevron, and its inconsistent application by the lower courts, it instead is hard to see how anyone-Congress included-could reasonably expect a court to rely on Chevron in any particular case. And even if it were possible to predict accurately when courts will apply Chevron, the doctrine "does not provide 'a clear or easily applicable standard, so arguments for reliance based on its clarity are misplaced.'" Janus, 585 U.S., at 927 (quoting South Dakota v. Wayfair, Inc., 585 U.S. 162, 186 (2018)). To plan on Chevron yielding a particular result is to gamble not only that the doctrine will be invoked, but also that it will produce readily foreseeable outcomes and the stability that comes with them. History has proved neither bet to be a winning proposition.

 

Rather than safeguarding reliance interests, Chevron affirmatively destroys them. Under Chevron, a statutory ambiguity, no matter why it is there, becomes a license authorizing an agency to change positions as much as it likes, with "[u]nexplained inconsistency" being "at most . . . a reason for holding an interpretation to be . . . arbitrary and capricious." Brand X, 545 U.S., at 981. But statutory ambiguity, as we have explained, is not a reliable indicator of actual delegation of discretionary authority to agencies. Chevron thus allows agencies to change course even when Congress has given them no power to do so. By its sheer breadth, Chevron fosters unwarranted instability in the law, leaving those attempting to plan around agency action in an eternal fog of uncertainty. Chevron accordingly has undermined the very "rule of law" values that stare decisis exists to secure. Michigan v. Bay Mills Indian Community, 572 U.S. 782, 798 (2014).

In his Perspectives, President May included a brief quotation from Justice Neil Gorsuch's concurring opinion in Loper Bright. A fuller quotation is also worth reading:  

Far from engendering reliance interests, the whole point of Chevron deference is to upset them. Under Chevron, executive officials can replace one "reasonable" interpretation with another at any time, all without any change in the law itself. The result: Affected individuals "can never be sure of their legal rights and duties." Buffington, 598 U.S., at__ (slip op., at 12).

 

How bad is the problem? Take just one example. Brand X concerned a law regulating broadband internet services. There, the Court upheld an agency rule adopted by the administration of President George W. Bush because it was premised on a "reasonable" interpretation of the statute. Later, President Barack Obama's administration rescinded the rule and replaced it with another. Later still, during President Donald J. Trump's administration, officials replaced that rule with a different one, all before President Joseph R. Biden, Jr.'s administration declared its intention to reverse course for yet a fourth time. See Safeguarding and Securing the Open Internet, 88 Fed.Reg. 76048 (2023); Brand X, 545 U.S., at 981-982. Each time, the government claimed its new rule was just as "reasonable" as the last. Rather than promoting reliance by fixing the meaning of the law, Chevron deference engenders constant uncertainty and convulsive change even when the statute at issue itself remains unchanged.

 

Nor are these antireliance harms distributed equally. Sophisticated entities and their lawyers may be able to keep pace with rule changes affecting their rights and responsibilities. They may be able to lobby for new "'reasonable'" agency interpretations and even capture the agencies that issue them. Buffington, 598 U.S., at__,__ (slip op., at 8, 13). But ordinary people can do none of those things. They are the ones who suffer the worst kind of regulatory whiplash Chevron invites.

Notably, Justice Gorsuch's concurring opinion in Loper Bright identified the FCC's flip-flopping on the regulatory classification status of broadband Internet access service under the Court's 2005 NCTA v. Brand X Internet Services decision as a prime example of how the “Chevron doctrine” warped the rule of law and undermined legal certainty.  The legal challenge to the FCC's decision to reclassify broadband Internet services as a Title II "telecommunications service" and subject it to public utility regulation is presently before the Sixth Circuit, and a decision is expected in 2025.

Chevron enabled Administrations to twist and abuse the law. Thankfully, the decision in Loper Bright ends the Court's runaway experiment with regulatory agency supremacy in statutory interpretation and brings those issues back within the wheelhouse of the judicial branch.  

Court Hears Arguments on Challenges to FCC's New Title II Order

On October 31, the U.S. Court of Appeals for the Sixth Circuit heard oral arguments in case MCP No. 185 Open Internet Rule. The case consolidates several legal challenges against the FCC's April 2024 Securing and Safeguarding the Open Internet Order. The Commission's order turned broadband Internet access services into a public utility and subjected broadband Internet service providers (ISPs) to rate regulation.

By an August 1, 2024, order, a three-judge panel of the Sixth Circuit stayed the Commission's order pending resolution of legal merits of challenges to that order. The court's decision to stay the agency's order was discussed in an August 23 Perspectives from FSF Scholars by FSF President Randolph May, "The Sixth Circuit Stays the FCC's Latest Net Neutrality Flip-Flop." A different panel was designated to decide the legal merits.

 

Oral arguments before the three-judge merits panel lasted approximately one hour. Judge Raymond M. Kethledge pressed legal counsel on the meaning of statutory terms – such as "information services" under Title I of the Communications and "telecommunications services" under Title II. Other judges expressed greater interest in the "major questions doctrine." They pointedly asked if the "major questions doctrine" is still operative following the Supreme Court's decision in Loper-Bright v. Raimondo and whether reclassifying broadband Internet access services under Title II and subjecting it to public utility regulation and rate controls amounts to a matter of economic and political significance under the "major questions doctrine." 

 

The Free State Foundation's 2017 initial comments and reply comments in the FCC's Restoring Internet Freedom proceeding emphasized the statutory definitional case for why broadband Internet access services are Title I "information services." 

 

Moreover, FSF's 2023 initial comments and reply comments in the Safeguarding and Securing the Open Internet proceeding explained why reclassifying broadband Internet access services under Title II and thereby subjecting those services to a public utility regime with rate regulation triggers the "major questions doctrine." That is, turning broadband ISPs into public utilities and asserting control over their rates is a politically and economically significant matter. Congress nowhere provided the FCC clear authority to make such a momentous decision. 

 

The Sixth Circuit panel that issued the August 2024 stay decision in the MCP No. 185 Open Internet Rule concluded that the FCC's order likely violated the "major questions doctrine." But the Sixth Circuit's merits panel that just held oral arguments will offer its view in due time. The judges will more comprehensively answer the disputed questions about the Commission’s authority.

Oral Arguments on FCC's New Title II Order Set for End of October

According to news reports, the U.S. Court of Appeals for the Sixth Circuit has scheduled October 31, 2024, as the date for oral arguments on the merits in the pending legal challenge to the FCC's Safeguarding and Securing the Open Internet Order. It is reported that live-streaming audio of the arguments will be available to the public. 

The Commission's order changed the classification of broadband Internet access services from a lightly regulated "information service" under Title I of the Communications Act to a more heavily regulated common carrier "telecommunications service" under Title II. Lawsuits challenging the new Title II order have been consolidated before the Sixth Circuit. 

 

In an August 23 Perspectives from FSF Scholars, "The Sixth Circuit Stays the FCC’s Latest Net Neutrality Flip-Flop," Free State Foundation President Randolph May reviewed the court's per curiam order released August 1. That court order stays the Commission's order, pending a decision by the merits panel assigned to the case. FSF President May briefly analyzes the major questions doctrine (MQD) rationale for the court's stay order and Chief Judge Jeffrey Sutton's concurring opinion that addresses the best reading of the Communications Act. Both issues can be expected to receive more extensive judicial analysis by the Sixth Circuit's merits panel. 

 

For more on the new Title II Order and the MQD, see my April 2024 Perspectives from FSF Scholars, "The FCC's Internet Regulation Plan Fails the Major Questions Doctrine."

Joint Resolution in Senate Would Repeal FCC's New Title II Order

On July 23, Senator Marsha Blackburn introduced S.J.Res. 103, a Congressional Review Act (CRA) joint resolution of disapproval to overturn the FCC's Safeguarding and Securing the Open Internet Order. Senators Ted Cruz and John Thune are co-sponsors. S.J.Res. 103 was referred to the Senate Commerce, Science, and Transportation Committee. By a 3-2 vote in April of this year, the Commission reclassified broadband Internet access services as "telecommunications services" under Title II of the Communications Act, subjecting advanced broadband networks to public utility regulation.

Earlier this year – as described in a May 28 blog post – Rep. Bob Latta introduced in the 118th Congress H.J.Res. 153, a similar CRA joint resolution of disapproval.

 

Under the CRA, there is a fast-track process for Congress to vote on the repeal of new agency regulations. Helpful background information on the CRA, in the context of broadband regulatory policy, is contained in FSF Board of Academic Advisors Member Daniel Lyons' June 2018 Perspectives from FSF Scholars, "The Congressional Review Act and the Toxic Politics of Net Neutrality."

 

Many Perspectives from FSF Scholars papers have been published critiquing the new Title II order's imposition of public utility restrictions on broadband Internet networks. These include my May 21 Perspectives, "The FCC's New Title II Order Allows Harmful Rate Regulation" and my April 22 Perspectives, "Public Safety Rebrand Won't Save the FCC's Internet Regulation Plan From Unlawfulness." The most serious legal defect in the Commission's new Title II order comes under fire in my April 12 Perspectives, "The FCC's Internet Regulation Plan Fails the Major Questions Doctrine." 

Court Considering Whether to Extend Stay on FCC’s New Internet Regulation

July 22 was to be the date on which the FCC's new public utility rules for broadband Internet access services were to go into effect. But on July 15, the Sixth Circuit Court of Appeals issued an administrative stay order in the case of In re: MCP No. 185, postponing the effective date until at least August 5. The Sixth Circuit apparently is considering whether a further stay of the Commission’s new Internet regulation is warranted under the Major Questions Doctrine. In its July 15 order, the court invited supplemental briefings from broadband Internet service providers and the Commission regarding stare decisis and the court’s decision in 2005 NCTA v. Brand X Services. 

Pursuant to a June 28 order by the court, the parties filed briefings to the court regarding the legal authority of the Commission’s new Title II order in light of the Supreme Court’s June 28, 2024, decision in Loper Bright Enterprises v. Raimondo. In Loper Bright, the Supreme Court overruled its 1984 decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

The Free State Foundation filed comments and reply comments in the FCC’s Safeguarding and Securing the Open Internet proceeding. Those comments explained why the Commission lacked authority to impose public utility regulation on broadband Internet access services under the Supreme Court’s Major Questions Doctrine. In short, the new Title II order was a major rule of political and economic significance, and Congress never provided the agency with a clear statement of authority to impose such sweeping restrictions on private broadband networks. In April of this year, shortly before the order’s release, I wrote a follow-up, “The FCC’s Internet Regulation Plan Fails the Major Questions Doctrine.”

 

In its legal briefings filed with the Sixth Circuit, the FCC argues that it has not expressly relied on Chevron in adopting its new Title II order but on its inherent statutory authority and the Brand X. But a relevant short passage from FSF’s comments anticipated the agency’s position in the pending litigation:  

The Commission appears to put some hope in the D.C. Circuit’s determination in its 2016 decision in US Telecom v. FCC that Brand X conclusively gave the Commission the authority to determine the proper classification of Internet access service, that the agency’s determinations involved matters of statutory ambiguity and were entitled to deference, and that there was no need to consult the Major Questions Doctrine. But the D.C. Circuit’s determination predated the emergence of the Major Questions Doctrine in Supreme Court

jurisprudence as well as the eclipse of Chevron deference, and the appeals court’s decision now appears to be inconsistent with current jurisprudence.

FSF’s comments were filed in December 2023, months before the Supreme Court’s decision was issued in Loper Bright Enterprises v. Raimondo. Even if the agency did not rely on the now-overruled Chevron Doctrine as purported legal authority for its new Title II order, the Major Questions Doctrine still poses an insuperable obstacle to the order’s legal validity. 

 

It is reported that the Sixth Circuit panel is expected to issues a decision on or before August 5 on whether to issue a stay on the rules pending a decision on the merits.

 

Free State Foundation President Randolph May wrote about the Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo in a Perspectives from FSF Scholars published on July 2, “Chevron’s Demise Curbs Agency Power, Boosts Congress’s.” Today, July 23, RealClearMarkets published Mr. May's op-ed, "Chevron's Demise Re-Aligns Administrative State With Founders' Vision." Expect FSF Scholars to have more to say about the long-awaited judicial overturn of the Chevron Doctrine and its implications for future FCC activity as well for the chronically overreaching administrative regulatory state. 

State-Level Rate Regulation of Broadband Faces Reckoning with Title II Preemption

On June 17, the U.S. Court of Appeals for the Second Circuit issued its mandate reversing and vacating the District Court decision that enjoined enforcement of New York's Affordable Broadband Act, a state law regulating the rates of broadband Internet access services. The New York law at issue requires broadband providers offering Internet access services in the state to make available plans that are subject to rate ceilings. Apparently, as many as one-third of New York households would qualify for such rate regulated plans. The law was challenged under the FCC's 2017 Restoring Internet Freedom Order.

In a May 10 Perspectives from FSF Scholars titled "Second Circuit Preemption Decision Won’t Save New York Broadband Rate Regulation Scheme," Law Professor Daniel Lyons – a member of the Free State Foundation’s Board of Academic Advisors – analyzed Second Circuit’s decision in NYSTA v. James. Prof. Lyons critiqued the court's narrow understanding of conflict preemption, while recognizing the court's acknowledgment that the decision would be short-lived because of a change in law. Just a day before the Second Circuit’s decision, the FCC's 2024 Safeguarding and Securing Order reclassified broadband Internet access service from a Title I "information service" to a Title II "telecommunications service." Prof. Lyons explained that the Commission's decision to forbear from ex ante and ex postrate regulation in its new Title II order preempts similar rate regulation at the state level. 

By a June 14 letter to the Second Circuit the broadband providers challenging the New York Affordable Broadband Act declined to seek a rehearing en banc. They similarly declined to file a motion to reconsider the court's decision based on the change in law from Title I to Title II. In his Perspectives, Prof. Lyons wrote that if a motion to reconsider proves unavailing that broadband providers "should seek relief from the Commission and hold it to its promise that it 'will not hesitate to exercise…authority' to preempt state laws that 'interfere or are incompatible with the federal regulatory framework' established under the order."

Will there soon be a petition filed at the FCC seeking a declaratory order preempting state-level rate regulation of broadband Internet access services under Title II? Whether it's the Commission or a future court decision, one should expect that the state-level rate regulation of broadband services will face a reckoning under the new Title II order. Stay tuned. 

For further background on the case and the likely bad effects of the FCC's new Title II order, see the summary of the Second Circuit's decision in NYTSA v. James in my May 3 Perspectives from FSF Scholars, "Second Circuit Rejects Preemption Challenge to New York's Broadband Rate Regulation" as well as my May 24 Perspectives, "The FCC's New Title II Order Allows Harmful Rate Regulation." 

Joint Resolution in House Would Repeal FCC's New Title II Order

On May 23, Rep. Bob Latta announced that he had introduced a Congressional Review Act (CRA) joint resolution of disapproval to overturn the FCC's Safeguarding and Securing the Open Internet Order. By a 3-2 vote, the Commission reclassified broadband Internet access services as "telecommunications services" under Title II of the Communications Act, subjecting advanced broadband networks to public utility regulation. 

Rep. Latta deserves credit for introducing this CRA joint resolution. The House of Representatives should give the legislation due consideration. 

 

The CRA provides a fast-track process for Congress to repeal new agency regulations. For helpful background on the CRA in the context of broadband regulatory policy, see FSF Board of Academic Advisors' Member Daniel Lyons' June 2018 Perspectives from FSF Scholars, "The Congressional Review Act and the Toxic Politics of Net Neutrality."

 

The Free State Foundation filed public comments and reply comments with the FCC in opposition to public utility regulation. Several Perspectives from FSF Scholars have been published critiquing the imposition of public utility restrictions on broadband Internet networks," including my May 21 Perspectives, "The FCC's New Title II Order Allows Harmful Rate Regulation."

FCC Releases Text of New Title II Order

On May 7, the FCC released the text of its Safeguarding and Securing the Open Internet Order – that is, the agency's new Title II Order. By a 3-2 vote on April 25, the Commission reclassified broadband Internet access services as "telecommunications services" under Title II of the Communications Act. It established a public utility regulatory regime for broadband. Under that regime, broadband Internet service providers are subject to bright-line restrictions on network management and a vague "catch-all" standard. Broadband providers will be subject to informal and formal complaint proceedings for alleged violations of the Commission's rules and "catch-all" standard.

The Free State Foundation filed comments and reply comments in the FCC's Safeguarding and Securing the Open Internet proceeding that opposed public utility regulation of broadband services. In the weeks and days leading up to the Commission's April 25 vote, Perspectives from FSF Scholars papers were published on the agency's empty national security and public safety rationales for Title II regulation, the legal problems with Title II reclassification under the Supreme Court's Major Questions Doctrine, and the harm to innovative 5G "network slicing" under Title II. Additionally, an April 25 Press Release by FSF President Randolph May and I provided a brief initial response to the Commission's vote to adopt its new Title II Order. 

My Federalist Society Blog post from May 3 analyzing the Second Circuit's decision in New York State Telecommunications Association, Inc. v. James, pointed to questions still needing to be directly sorted out regarding preemption and specific state-level rate regulation of interstate broadband Internet services. Now that the text of the new Title II Order has been publicly released, expect forthcoming analyses from FSF scholars about rate regulation as well as other law and policy issues and implications of the Order. 

FWA and Cable MVNO Services Make More Gains in Early 2024

The reality of cross-platform competition in today's communications marketplace is evidenced by the continued growth of fixed wireless access (FWA) residential broadband services as well as cable wireless mobile virtual network operator (MVNO) services.

On April 25, T-Mobile announced that it added 405,000 FWA subscribers during the first quarter of 2024, bringing its overall FWA subscriber total to over 5 million. Verizon announced that it added 203,000 FWA subscribers during the first quarter, resulting in a total of 3.4 million. AT&T announced that it added 110,000 subscribers to its new FWA service during the first quarter, increasing its total FWA subscriber count to more than 200,000. 

It is reported that T-Mobile set an initial target of having 7-to-8 million FWA subscribers in 2025 and that Verizon has set a target of 4-to-5 million FWA subscribers for next year. Additionally, New Street Research reportedly has predicted that AT&T will be adding approximately 180,000 FWA subscribers per quarter during the remainder of 2024, with potential increases over the quarters that follow. It is reported that there is some difference in outlook among market analysts such as TD Cowen and Moffett Nathanson regarding how much competitive pressure FWA will put on cable broadband in the near term. 

 

Meanwhile, cable broadband providers continue attracting new subscribers to their MVNO offerings. According to an April 26 announcement by Charter Communications, its Spectrum Mobile service added 486,000 subscribers during the first quarter of 2024. At quarter's end, Spectrum Mobile had 8.3 million subscribers. Additionally, Comcast announced that it had gained 289,000 subscribers to Xfinity Mobile, increasing its subscriber total to 6.9 million. 

 

The proper response by the FCC to the growth of FWA and cable MVNO in the communications market should be to emphasize market competition as a safeguard to consumer welfare rather than stringent government regulation. Unfortunately, the Commission took the latter approach on April 25 when it voted 3-2 to subject broadband Internet access services to public utility regulation. The Free State Foundation filed comments and reply comments in the FCC’s Safeguarding and Securing the Open Internet proceeding that opposed public utility regulation. 

PRESS RELEASE: The FCC's Democrat Majority Converts Internet Providers Into Public Utilities

Regarding today's action by the FCC classifying Internet providers as public utilities, the following statement may be attributed to Free State Foundation President Randolph May and Director of Policy Studies Seth Cooper:

The FCC's vote to convert broadband Internet providers into regulated public utilities is likely the most momentous power grab by the administrative state thus far in the 21st century. Without any evidence of present consumer or competitive harm, the FCC's Democrat majority has asserted far-reaching government control over Internet providers and the Internet's physical infrastructure. Rarely, if ever, has an administrative agency attempted to seize so much power based on so little evidence. The FCC's action is based only on empty claims of speculative harms. The result almost certainly will be a chilling of investment and innovation.

Unlike most claims for the imposition of public utility regulation, the FCC in this case does not even try to justify its action based on the claims of Internet provider market power. Indeed, it couldn't if it tried, because the high-speed broadband market has become effectively competitive, with cable, fiber, fixed wireless, mobile, and satellite platforms providing consumers with choices. And the record is unequivocal that broadband providers do not block or throttle their subscribers' free speech or access to content of their choice. 

 

The Commission's novel late-blooming invocation national security and public safety as a justification for asserting government control over Internet providers is disingenuous. The order fails to identify any specific security or safety harms or adopt any new targeted security or safety rules to address them.

 

Finally, and importantly, the FCC's action almost certainly is unlawful and will fail under the Supreme Court’s Major Questions Doctrine. Congress never clearly authorized such a politically and economically significant assertion of government control over the Internet.

Report IDs Key Stats on Wireless Infrastructure, But Regulatory Threat Looms

On April 16, the Wireless Industry Association (WIA) released its report, "Wireless Infrastructure By The Numbers: 2023 Key Industry Statistics." As the title indicates, WIA's report provides a high-level look at the overall number of cell towers, macro sites, and small cell facilities that mobile service providers use to offer mobile broadband Internet access services. According to WIA's report, as of 2023, there were 153,400 cellular towers in operation in the U.S., in addition to nearly 245,000 macrocell sites and 202,100 outdoor small cells in operation. The report found that there also were nearly 776,000 indoor small cell nodes in use as of last year. These figures surely have grown since 2023.  

Moreover, WIA's report found that "[t]he U.S. cellular industry spent $11.6 billion building additional capacity and coverage into the nation’s wireless networks in 2023." Another interesting observation in the report is that "[m]ore towers and cell sites are being deployed but the amount spent building networks is flat" because "[a]s wireless network technologies mature and evolve, network equipment becomes more efficient and cost effective." Also, "[t]he amount spent on maintaining and operating the cellular networks increased but build spending dropped" due to larger networks increasing the necessary maintenance costs.

 

The deployment and operation of 4G LTE and 5G wireless networks depends on private market investment remaining strong. Subjecting mobile broadband networks to public utility regulation – as the FCC proposes in its Draft Order to be considered for a vote at the agency’s April 25 meeting – would undermine the ability of wireless infrastructure owners and operators to use their property and generate returns. This would reduce incentives to build and upgrade such infrastructure. The 2018 Restoring Internet Freedom Order found that the imposition of public utility regulation under the now-repealed 2015 Title II Order inhibited investment: 

The Commission has long recognized that regulatory burdens and uncertainty, such as those inherent in Title II, can deter investment by regulated entities and, until the Title II Order, its regulatory framework for cable, wireline, and wireless broadband Internet access services reflected that reality. This concern is well-documented in the economics literature on regulatory theory, and the record also supports the theory that the regulation imposed by Title II will negatively impact investment. The balance of the evidence in the record suggests that Title II classification has reduced ISP investment in broadband networks, as well as hampered innovation, because of regulatory uncertainty. The record also demonstrates that small ISPs, many of which serve rural consumers, have been particularly harmed by Title II. And there is no convincing evidence of increased investment in the edge that would compensate for the reduction in network investment.  

Imposing restrictions on 5G network slicing – either by outright prohibitions or by regulatory uncertainty under the vague "general conduct" standard contained in the Draft Order – also would be detrimental to wireless innovation and investment, including investment in the physical infrastructure that supports 5G uses. For more on this topic, see Free State President Randolph May's and Senior Fellow Andrew Long's April 2 Perspectives from FSF Scholars, "The 'Network Slicing' Debate Exposes How Title II Will Kill Innovation." Also, check out FSF President May's FSF Blog post from April 18: "Don't."

FCC's Misleading Rehash of 2018 Fire Incident Doesn't Justify Title II

On Monday, April 8, FCC Chairwoman Jessica Rosenworcel is set to join the Santa Clara County Fire Chief in California for a media event to discuss the Commission's proposal to transform broadband Internet networks into public utilities. According to a media advisory, Chairwoman Rosenworcel "chose to travel to the Bay Area to highlight an incident involving the Santa Clara County Fire Department where their internet access was throttled in the midst of their public safety response to the largest fire on record in California history." 

But there is a problem with Chairwoman Rosenworcel's apparent attempt to turn that bygone matter into a media flash point for public utility regulation. The July 2018 "wildfire incident" involving the Santa Clara County Fire Department was not a "net neutrality" violation.

One of the major flaws of the Biden FCC's proposed Internet regulation plan is that there is no existing problem that would justify such heavy-handed government controls. All or nearly all broadband providers in the nation pledge, in legally enforceable terms of service, to not block or throttle their subscribers' Internet access. There is a lack of real-world examples of broadband providers engaged in discriminatory blocking or throttling. The July 2018 "wildfire incident" provides no such example and its occurrence certainly doesn't justify Title II reclassification of broadband services.

 

I wrote about the July 2018 "wildfire incident" back in an August 2018 FSF Blog post, "Attempt to Turn Usage-Based Pricing into Net Neutrality Issue Is Non-Starter." To briefly recap, the Santa Clara County Central Fire Protection District signed up for a lower-tiered mass-market retail broadband Internet service plan with a monthly so-called "data cap" that resulted in slower speeds when the cap was exceeded. Near the end of July 2018, while a massive fire was blazing, the Fire District experienced exceeded its service plan's data allotment. Although the broadband service provider had a policy of making exceptions for emergencies, a customer service employee did not execute that request and the Fire District experience slowed service for some time thereafter. The broadband provider later apologized for the mistake and changed their policy to prevent that sort of result from happening again.

Although supporters of public utility regulation almost immediately made noise about the 2018 wildfire incident, there was no underlying net neutrality violation. Even if the 2015 Title II Order had remained in force in 2018, the usage-based pricing plan that the Santa Clara County Central Fire District subscribed to would have been permissible. As I explained in my August 2018 blog post: 

Usage-based pricing with data allowances was affirmed under the now-repealed 2015 Obama FCC Title II Order. According to paragraph 122: "Because our no-throttling rule addresses instances in which a broadband provider targets particular content, applications, services, or non-harmful devices, it does not address a practice of slowing down an end user's connection to the Internet based on a choice made by the end user. For instance, a broadband provider may offer a data plan in which a subscriber receives a set amount of data at one speed tier and any remaining data at a lower tier."

Buried in footnote 13 of the legal brief challenging the 2017 Restoring Internet Freedom Order, Santa Clara County and other pro-regulatory advocates admit they are not attempting to argue that Verizon's usage-based pricing plan with the fire district would have violated the 2015 Title II Order. This makes the net neutrality theater act pretty obvious.

 

After an intermission, the theater act resumed last fall. Chairwoman Rosenworcel invoked the incident in her statement accompanying the FCC's September 2023 Notice of Proposed Rulemaking to reclassify broadband Internet access services under Title II. However, the Notice didn't mention it. (The Free State Foundation filed comments and reply comments in response to that Notice, recommending against Title II regulation.)

 

Now the Commission's April 2 draft order invokes the 2018 wildfire incident in seeming support for new agency rules. But the result is underwhelming. Paragraph 452 includes a brief summation of clashing views of public comments: 

Commenters reach differing conclusions regarding the significance of the 2018 Mendocino Complex Fire. Commenters who support reclassification point to the wildfire incident as an example demonstrating the need for the open Internet rules and for the Commission to have greater authority to examine and investigate such incidents, and ultimately, to prevent future harms from occurring. Without such rules, these commenters warn, BIAS providers will engage in conduct that could result in harm to public safety, and that voluntary commitments are insufficient to ensure public safety. Commenters who oppose reclassification contend that the wildfire incident is irrelevant to, and an unpersuasive example used in support of, reclassification and the open Internet rules, because “the data plan at issue was marketed to government users, and therefore not covered by the FCC’s 2015 rules, nor by the definition of BIAS contained in the NPRM” and that Verizon’s actions would not have violated the 2015 Open Internet Order.  In other words, they state that the type of data use plan that Verizon offered and that the Santa Clara fire department purchased did not violate the 2015 Open Internet Order. Opponents also argue that the Santa Clara fire department did not purchase a data plan that was appropriate for their needs.  

The paragraph next offers the Commission’s brief take on the matter: 

In our view the 2018 Mendocino Complex Wildfire incident demonstrates that given the high stakes at issue—the loss of life and property—reliance on the free market alone is insufficient in the area of public safety. 

For all the fuss over the 2018 wildfire incident, at the end of the day the draft order never deems the incident to be a violation of net neutrality principles or the no-throttling rule. Instead, the incident is again being used in a misleading way to kick up dust in support of the proposed regulation. 

 

Public safety is a primary function of government. But responsibility for public safety belongs primarily to agencies like the Department of Homeland Security – and not to the FCC. Congress never provided any clear statement of authority for the Commission to impose public utility regulation on broadband services for public safety purposes. The draft order faces a cliff because the Supreme Court's Major Questions Doctrine requires a clear statement of authority for the agency to undertake such a politically and economically significant action as imposing public utility regulation on broadband Internet access services. The Commission's attempt to rebrand Title II regulation as a public safety matter is an empty and likely doomed attempt to get around the agency's lack of authority problem. 

 

Moreover, there is a huge mismatch between public safety and Title II regulation of commercial mass-market retail broadband Internet access services offered principally to residences and small businesses. Law enforcement agencies and emergency responders rely substantially on enterprise or dedicated networks, including FirstNet. The Title II legacy telephone regulatory framework was designed for rate-regulating common carrier services, and it has almost nothing to do with public safety. There is no reason to think that Title II reclassification of broadband will improve public safety outcomes. 

FSF Scholars Warn Against the Title II Threat to Innovative 5G Network Slicing

On April 2, the Free State Foundation released a Perspectives from FSF Scholars by President Randolph May and Senior Fellow Andrew Long titled "The 'Network Slicing' Debate Exposes How Title II Will Kill Innovation." Their Perspectives paper provides a helpful descriptive overview of 5G mobile network slicing and how it can provide optimal service for different use cases, including broadband Internet access services, telemedicine, Internet-of-Things, and more. But as FSF President May and Mr. Long explain, the Commission's proposal to reclassify broadband Internet access services as a Title II "telecommunications service” under the Communications Act threatens to impede these breakthrough uses of next-generation broadband networks. Their paper concludes: "To encourage continued investment and innovation, the Commission should shelve its entire proposal to impose a public utility straitjacket on Internet providers and let technological advancements and marketplace competition do the job of enhancing consumer welfare."

FSF President May and Mr. Long's Perspectives paper is worthwhile reading on network slicing and the harm to innovation posed by Title II regulation. Also, an April 5 FedSoc Blog post by former NTIA Administrator John Kneuer, titled "Network Slicing and Net Neutrality" elaborates on these same matters and cites favorably to that paper.