FCC Revives Common Carriage for the Internet
After five years without net neutrality rules, the fix for a problem that doesn’t exist is back.
Until Monday, the Federal Communications Commission (FCC) had been deadlocked for 2.5 years. It took President Joe Biden six months to nominate a third Democratic commissioner—and after moderate Democrats balked, it took another 17 for him to nominate someone else. The swearing-in of Anna Gomez gave Democrats a majority—two-thirds of the way into President Joe Biden's presidential term. With so much to cram into so little time, the next year will be the most frenzied in the FCC's nearly 100-year history.
The key issue is broadband regulation. It's been five years since the Republican FCC supposedly "killed net neutrality"—yet even after the pandemic's shift towards remote work, remote school, and remote everything broadband service is better than ever thanks to $2 trillion in private investment since 1996. That's by far the largest source of capital expenditures in the U.S., dwarfing public subsidies, even the generous grants included in pandemic stimulus bills.
On Thursday, the Commission released a draft proposal to bring back net neutrality rules by reinstating the 2015 Open Internet Order, a fix for a problem that doesn't exist. Expect the Commission to vote out the proposal for public comment at its next meeting on October 19.
As in 2015, the FCC promises not to impose rate regulation, build-out requirements, or other heavy-handed aspects of common carriage regulation—lest these sap private investment in broadband. But as in 2015, the FCC won't "forbear" from the core provisions of Title II of the Communications Act, which are essentially the same provisions imposed on railroads in the 1880s: regulators get broad discretion over what is "just and reasonable."
Despite promises of a "light touch," the FCC may also impose common carriage regulation upon broadband in another rulemaking. The Infrastructure Act of 2020 included $65 billion in spending on broadband (still less than the $86 billion private providers spent that year). Tucked into this massive spending bill was Section 60506, a provision requiring the FCC to write rules "to facilitate equal access to broadband internet access service…including preventing digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin." Last year, the FCC proposed draft rules that would allow it to do exactly what it promised it wouldn't do in its 2015 Open Internet Order: impose build-out requirements, regulate rates, etc. The rules are due by the FCC's November 15 meeting.
Just as blocking and throttling lawful traffic wasn't a problem in 2015 (and still isn't today), there's no hard evidence of "digital discrimination." Yet breathless claims are made to justify prophylactic regulation in both contexts. Under the FCC's proposed rules, plaintiffs needn't prove any intentional discrimination. "Disparate impact" alone would suffice to make a claim, and broadband providers would bear the burden of proving a negative—of explaining why they didn't deploy service, or the same service, in some areas. That burden amounts to common carriage regulation, and it won't be easy to bear. Broadband service offerings vary geographically for a host of reasons, including natural impediments like bodies of water and topography; man-made impediments like highways and railroads; regulatory impediments like zoning issues, rights-of-way, and pole attachment problems; and economic realities like population density and the cost of wiring older buildings.
The FCC is likely to lose in both proceedings. In 2017, the D.C. Circuit upheld the FCC's reclassification of broadband service under Title II. Two Republican judges dissented, arguing that whether to treat broadband like railroads was a "major question" for Congress, not the FCC, to decide. One of those judges was Brett Kavanaugh. Six years later, the Supreme Court has embraced the "major questions" doctrine in a series of "cases in which the 'history and the breadth of the authority that [the agency] has asserted,' and the 'economic and political significance' of that assertion, provide a 'reason to hesitate before concluding that Congress' meant to confer such authority.'" Even President Barack Obamaʼs former solicitors general agree: Title II reclassification "will not survive a Supreme Court encounter with the major questions doctrine."
The FCC is on even weaker ground in the digital discrimination proceeding.
Congress "does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not…hide elephants in mouseholes." If Congress had intended Section 60506 to transform broadband regulation, it would, at a minimum, have placed the provision inside the Communications Act—instead of leaving it a free-standing provision unconnected to the FCC's enforcement powers. Moreover, if Congress had intended the FCC to regulate broadband on the basis of disparate impact rather than intentional discrimination, it would have written a statute that looked more like civil rights laws the Supreme Court has recognized as creating disparate-impact liability; it would have clearly prohibited the denial of equal opportunities. Instead, Congress commanded the FCC only to "facilitate equal access"—which makes sense in a sprawling bill about infrastructure spending.
These are just two of likely dozens of items the FCC will rush to get done in the 16 monthly meetings that remain before the end of Biden's term. But they will dwarf the others in importance. Biden's dithering over his FCC nominee has created a real, but manageable, time crunch. If Republicans sweep the White House, House, and Senate in 2024, they'll likely do in January 2025 what they did in January 2021: use the Congressional Review Act to reverse rulemakings they don't like and bar the reissuance of any "substantially" similar rule without congressional approval. A prompt Congressional Review Act resolution could reach back, at most, to late August 2024. Thus, the FCC has slightly less than 11 months to finalize the Title II rulemaking and anything else controversial.
All of this puts FCC Chair Jessica Rosenworcel in a painful position. She's under enormous pressure to do things that probably won't stand up in court—and quickly. With progressives still convinced the open internet is somehow in peril—despite all evidence to the contrary—there's no chance Rosenworcel will back down from Title II reclassification.
At a minimum, she shouldn't rush the proceeding. In 2014, she had the courage to break with then-FCC Chairman Tom Wheeler on his rush to vote on draft neutrality rules. "Before proceeding," she said, joining Republican Ajit Pai, "I would have taken the time to understand the future" and "taken time for more input." Wheeler allowed the public just two months to file comments on what turned out to be, by far, the most commented-upon rulemaking in FCC history. Ultimately, he relented, allowing three months—plus another month for reply comments. Allowing the same window for comment now would protect Rosenworcel from charges of hypocrisy and set a precedent for good government.
It would also be the smart move. If the FCC has any chance of persuading increasingly skeptical courts that broadband reclassification isn't a "major question," it'll need all the help it can get.
Most helpful will be the back-and-forth on legal questions in reply comments. Allowing an extra month for those would help the FCC's allies help the agency. If, say, the FCC allowed three (or even two) months for comments plus two for reply comments, the final deadline would be around April 1 (or March 1), 2024. The agency would still have nearly five (or six) months to finish its final order—plenty of time to read and respond to comments—before late August.
On digital discrimination, all eyes will be on Gomez. She has more experience at the FCC and practicing communications law than any FCC commissioner in decades. She may well recognize how fundamentally Section 60506 differs from civil rights laws that the courts have interpreted to create liability for disparate impact rather than disparate treatment (discriminatory intent). As the first Latina commissioner in decades, she may also have the political capital to resist pressure from civil rights groups—especially if Commissioner Geoffrey Starks, an African-American, joins her. Approaching the end of a distinguished career, she may just care less about the politics of what the FCC does.
But if Gomez isn't quite ready to take a bold stance, there is a third option: the FCC could issue disparate-treatment rules at the November 15 meeting, as required by Section 60506, but punt on the question of disparate impact by splitting the proceeding with a further notice of proposed rulemaking on the legal questions of how to interpret the statute. As with Title II, the FCC would still have time to finalize whatever rules it writes by August.
Until now, Rosenworcel hasn't had a majority for any controversial item. In a very real sense, her chairmanship begins this week—and it will be defined principally by these two rulemakings and how she administers them.
If she's learned the right lessons from her 11 years on the FCC, she won't treat the public comment process as an inconvenience to be rushed through as quickly as possible. Moreover, she won't treat her fellow commissioners the way Tom Wheeler treated her and then-Commissioner Mignon Clyburn: as foot soldiers to be bullied when they dare to express an independent thought. And maybe, just maybe, Rosenworcel will think twice about when the FCC should defer to Congress.