Toward Sustainable Network-Openness Obligations on Broadband in the U.S.: Surviving Providers’ First Amendment Challenges

Abstract

On January 14, 2014, the D.C. Circuit Court of Appeals decided Verizon v. FCC, vacating and remanding parts of the FCC’s network neutrality rules released on December 23, 2010 in the Open Internet Order. The court affirmed the FCC’s authority to regulate broadband Internet access service under Sec. 706 of the Telecommunications Act of 1996, but vacated the FCC’s no-blocking and no unreasonable-discrimination rules as impermissible common carrier regulation of an information service. In response, the FCC has declined to seek appeal before the U.S. Supreme Court. Instead, the FCC has established a new docket, GN Docket no. 14-28, within which to consider how the FCC should proceed in light of the court’s guidance in Verizon v. FCC.

Our paper suggests strategies for providing sustainable legal obligations in terms of network openness, such as no blocking and no unreasonable discrimination, on broadband service providers. We consider two strategic options the FCC may pursue upon remand. Option 1 is for the FCC to proceed to promulgate new rules under its Sec. 706 authority that was affirmed in Verizon v. FCC. Likely legal challenges to an FCC order pursuant to this option are: (1) challenge to the FCC’s exercise of its Sec. 706 authority; and (2) challenge of unconstitutionality under the First Amendment. In Verizon v. FCC, Verizon challenged the unconstitutionality of the FCC’s 2010 network neutrality rules under the First Amendment; however, the D.C. Circuit did not rule on this constitutional challenge, leaving this issue open.

Option 2 is for the FCC to reclassify broadband Internet access service as a Title II telecommunications service (i.e. as a common carriage service) under the Communications Act of 1934. Upon reclassification, the FCC could then issue new network neutrality rules – in the same or a subsequent docket – under Title II as well as its Sec. 706 authority. Likely legal challenges to an FCC order pursuant to this option are: (1) challenge to the FCC’s reclassification of broadband Internet access service; (2) challenge to the FCC’s exercise of its Title II and Sec. 706 authority; and (3) challenge of unconstitutionality under the First Amendment.

Our paper asserts that the legal challenges to an FCC order are less likely to succeed under Option 2 than under Option 1. First, the courts give great deference to FCC expertise in interpreting existing statutory language, with such deference applicable to an FCC reclassification of service based on a reassessment of circumstances under Option 2. Second, as to the same legal challenges under Options 1 and 2 of Sec. 706 authority and unconstitutionality under the First Amendment, we explain how the reclassification of broadband Internet access service as a Title II telecommunications service (common carriage service) not only expands the permissible scope of the FCC’s regulatory authority in conjunction with Sec. 706 – as compared to the scope of regulatory authority under Title I in conjunction with Sec. 706 – but also strengthens the FCC’s ability to defeat a constitutional challenge to its regulatory authority under the First Amendment. Thus, critical to the differences between Option 1 and 2 are the differing levels of First Amendment rights of common carriers relative to non-common carriers. Therefore, although requiring an additional administrative step of service reclassification, we conclude that Option 2 is a superior strategy to Option 1 for providing sustainable legal obligations in terms of network openness on broadband service providers given its greater likelihood of withstanding – highly inevitable – constitutional challenge.

Keywords: Broadband, Common Carrier, Common Carriage, Network Openness, Free Speech, First Amendment, FCC, Telecommunications Act, Sec. 706