Legal Arguments Take Shape Against Title II

Through a sleepy August, the Title II imbroglio continues, extending along two main fronts: glimmers of a legislative solution possibly gaining traction when Congress returns, and the DC Circuit Court marching through its briefing schedule. On the latter, initial industry briefs are now in, along with those of their friends, and we can start to see the shape of the legal fight to come. The court has expedited the briefing schedule, with final briefs due the middle of October, and oral argument expected in December.

It is looking to be a fairly complex case, with multiple petitioners arguing in different directions, interveners on both sides, and plenty of amici weighing in. There are many ways in which the FCC’s order could unwind. Here I want to focus on a few of the most basic legal challenges that stakeholders have advanced.

First, a point that still seems lost on many—the major Internet service providers (ISPs) are not challenging the basic net neutrality rules; instead they are focused on the FCC’s decision to classify broadband as a common carrier service under Title II of the Communications Act. Op-eds that argue carriers should stop fighting net neutrality show a fundamental misunderstanding of what this dispute is about—the real issue is the FCC’s jurisdiction and all its baggage, not net neutrality.

There is widespread agreement on the general principles of net neutrality. Everyone agrees there should not be capricious blocking or throttling of any legal content on the Internet. ITIF will keep up the good fight for reasonable prioritization of applications that legitimately require it, even though most operators appear to have given up on that outcome. The real problems come with the parts of Title II that have nothing to do with net neutrality. While the FCC is rightly attempting to forbear from the law’s most onerous provisions, even the most basic provisions of Title II bring considerable uncertainty that we ought to avoid.

The main argument of industry’s brief is that the FCC cannot accurately claim that broadband Internet access is a “telecommunications service” as defined by the Communications Act. This is a key argument because only telecommunications services can be regulated as common carriers under Title II. Contrasted with telecommunications services are “information services,” which the FCC generally treats with a lighter touch. While the Verizon court made clear that the FCC retains broad jurisdiction over information services under section 706, the commission cannot regulate these services as common carriers, as it attempted to do with its 2010 no-blocking and non-discrimination rules. While there are numerous other arguments and many different threads the court could pull at to unravel the commission’s order, this issue is the most central: Is broadband Internet access a telecommunications service, or an information service?

This distinction, information versus telecommunication service, is a perennial issue in telecommunication policy, dating back, in one form or another, through the “Computer Inquiries” of the 1960s and 1970s. The line between the two services is a bit obscure, but more or less turns on whether there has been a change in the form or content of information between where it is sent and where it is received. Information services involve offering the capability of “generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information,” whereas telecommunications services are more akin to “pure transmission” of information.

Ever since the Brand X decision, there has been general agreement that these are mutually exclusive categories, and the FCC’s order did not change that assumption. The commission asserts that “broadband Internet access service as it is offered and provided today is a distinct offering of telecommunications and that it is not an information service.”

Not so fast, say the operators, arguing that the “whole point of Internet access is to offer the capability to obtain and manipulate the information stored on the millions of interconnected computers that comprise the Internet.” Moreover, ISPs are only able to offer access to the Internet by combining many different computer processing functions with data transport. Key examples here are caching, which involves the storing of data closer to the user, and the Domain Name Service capability, which connects URLs to IP address numbers, allowing users to navigate the Web.

While this is perhaps the most fundamental question to be addressed by the court, there are all sorts of other ways in which the order could fall. Notice is a huge issue: In the initial questions asked by the FCC, the possibility of Title II was an afterthought, referenced in passing on a few occasions. Whether this was a deliberative process based on evidence and analysis rather than a kludge of a solution forced by political pressure will be an important factor. The level of cost-benefit analysis will now be all the more salient in the wake of Michigan v. EPA, which the Supreme Court handed down in July. As Cass Sunstein writes, that case is “a kind of a rifle shot, with potentially major effects on a host of future regulations.” He points to the FCC likely finding itself “in legal jeopardy,” noting “many of their regulations have not been accompanied by careful cost-benefit analysis.”

Even more problematic for the commission are its rules around interconnection and the application of Title II to mobile broadband services. The FCC said explicitly that the rules would not touch interconnection, and, moreover, the way the FCC structured the interconnection rules flies in the face of the Verizon decision. The FCC’s treatment of mobile broadband, perhaps the most appalling legal maneuvers of the whole order, is on even shakier ground. The FCC attempted a complete redefinition of several key legal terms to gerrymander mobile broadband into Title II, all very clearly contravening congressional intent.

In the end, it is clear that key sections of the FCC’s order face what are likely insurmountable legal challenges. It is baffling that net neutrality advocates are not seizing this opportunity to lock in what is a high-water mark for their cause. A legislative fix that gives the FCC incontrovertible jurisdiction for widely agreed-upon open Internet principles while taking the controversial provisions of Title II off the table would be the best way to settle this issue.