Net Neutrality Survives For Today, But The Legal Battle Is Far From Over

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The metaphorical ink on today’s mammoth 184-page ruling upholding net neutrality was barely even dry before everyone with a stake in the matter came out swinging with statements. And while the decision earned praise from consumer advocates and some lawmakers, the telecom industry has vowed to continue the fight.

We all knew that whatever the D.C. Circuit Court of Appeals ruled, the losing party — either the FCC or the industry groups that sued to block — would likely appeal to the Supreme Court. And within moments of today’s ruling becoming public, that promise of escalation was in the air.

MORE: Court Upholds FCC’s Net Neutrality Rules

AT&T EVP and General Counsel David McAtee was the first out of the gate, saying: “We have always expected for this issue to be decided by the Supreme Court, and we look forward to participating in that appeal.” However, he was not alone in promising to continue the legal fight.

TechFreedom, a think tank that has long advocated for paid prioritization and against neutrality, also had harsh words for the Commission and the Court.

“The FCC’s victory merely begins the next stage in this decade-long melodrama,” TechFreedom president Berin Szoka wrote in a statement. “That legal process could take years.”

Szoka accused the FCC of trying to bend the rules in order to grab regulatory authority it should not have, for some reason. “The FCC now has a blank check to regulate the Internet however it sees fit,” he said. “Do not believe their promises of forbearance.”

“The only way to end this madness,” Szoka concluded, “is a legislative solution that gives the FCC clear but narrow authority over the core of its rules — but stops the FCC’s other power grabs.”

Although broadband investment has continued on its merry way, it’s easy to see why Szoka might well be upset about today’s ruling: TechFreedom’s arguments were specifically called out several times in the majority opinion (PDF), and not in a good way.

Szoka, in his statement, said that “the court simply did not understand our argument.” Whether or not the Court understood what TechFreedom meant to say is up for debate, but the opinion straight-up denied the arguments the organization made. Specifically, the court rejected the think tank’s interpretations of two prior Supreme Court cases, known as Brand X and Chevron, upon which most of the net neutrality arguments were based.

The NCTA, a trade group that represents all the big cable and internet companies you’ve heard of as well as a bunch of small ones you haven’t, was likewise displeased with the ruling.

“We are reviewing today’s split decision by the DC circuit panel, and will carefully review the majority and dissenting opinions before determining next steps,” the NCTA said in a statement. “Though disappointed in today’s result, we are particularly gratified by Judge Williams’ recognition of the ‘watery thin and self-contradictory’ nature of the FCC arguments used to justify the imposition of common carriage laws on Internet networks. While this is unlikely the last step in this decade-long debate over Internet regulation, we urge bipartisan leaders in Congress to renew their efforts to craft meaningful legislation that can end ongoing uncertainty, promote network investment, and protect consumers.”

And indeed, the industry’s Congressional allies plan to stay by its side as the appeals go on. Sen. John Thune, chair of the Senate Commerce Committee — one of the many committees that has grilled the FCC over net neutrality before — issued a statement saying that it’s time for Congress to take action.

“Today’s 2-1 court ruling upholding the FCC’s partisan decision to saddle the internet with restrictions designed for the monopoly telephone era says more about our outdated telecommunications laws than anything else,” said Thune.

“Rather than providing internet users and companies alike with the regulatory certainty they need to thrive, we instead now have a highly political agency micromanaging the internet ecosystem. Today’s decision is a clear signal that my colleagues and I need to reestablish Congress’ appropriate role in setting communications policy on a bipartisan basis. As Judge Williams warns in his dissent, by ‘shunt[ing] broadband service onto the legal track suited to natural monopolies,’ the FCC’s order may actually foster ‘the prevalence of incurable monopoly.’ Congress must not allow that to happen.”

But what, exactly, will an appeal look like? What strategy is it likely to take?

Hints can be found in Judge Williams’ 69-page dissent, as the NCTA and Thune observed. While Williams concurred with his two fellow judges that the FCC’s statutory authority did allow it to reclassify broadband as a Title II service, that was about the end of his agreement.

Williams, in his dissent, wrote that the Commission’s justification for reclassification “fails for want of reasoned decisionmaking,” and called the FCC’s explanation “watery thin and self-contradictory.”

Williams begins by “acknowledging that the Commission is under a handicap in regulating access,” because the Telecommunications Acts of 1934 and 1996 don’t give it the framework it needs.

“I agree with the majority that the Commission’s reclassification of broadband internet as a telecommunications service may not run afoul of any statutory dictate in the Telecommunications Act,” Williams writes. But, he continues, the FCC also didn’t meet the requirements for switching policy that exist from previous case law.

The requirements, from the 2009 Supreme Court ruling in FCC v Fox Television (PDF), are that an agency must “show that there are good reasons for the new policy” when it makes a significant change. Williams argues that the FCC did not demonstrate sufficient reasoning for why the Open Internet Order was necessary.

Williams also inveighs against the FCC’s 2015 decision to hike the minimum standard for “broadband,” and uses that report as proof that the internet access market is currently in good health. “If the Commission were the least bit serious about the market dysfunction that might provide support for its actions,” Williams writes, “it would consider competition between [fixed and mobile service].” (Even though, he adds, “to a degree the statute requires” that they be considered separately.)

Throughout his dissent, Williams digs deep into the weeds of the FCC’s past and present rulemaking procedures, and highlights every time when he feels that a past decision is in conflict with the reading of the statute that the FCC used in their defense of the Open Internet rule. He concludes, “The Commission’s hypothesis that paid prioritization has deleterious effects seems not to rest on any evidence or analysis,” before presenting the FCC’s arguments and calling them a “parade of irrelevancies.”

In the end, Williams concludes, the FCC has undermined itself. “Even if the Commission’s forbearance itself were reasonable standing alone, that forbearance, paired with the reclassification decision, was arbitrary and capricious,” the dissent reads. “Or, to note the refers implication, the massive, insufficiently justified forbearance infects stye decision to apply (or purport to apply) Title II. The logical inconstancy is fatal to both.”

That dissent will provide plenty of fodder for the businesses, think tanks, and trade groups that continue to oppose the Open Internet rule.

The next step is for the parties who lost to ask for two things: one, they can ask for an en banc hearing from the full 9-member DC Circuit Court of Appeals. Or two, they can appeal to the Supreme Court by filing a Writ of Certiorari asking SCOTUS to hear their case.

In the meantime, the Open Internet Order has been the law of the land for just over a year — it went into effect on June 12, 2015. And during that time, the sky has so far failed to fall. In fact, deployments of new technology continue, as do all kinds of mergers and acquisitions.

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