Can the FCC’s Net-Neutrality Rollback Hold Up in Court?

Advocates will force the FCC to explain its policy shift going back to 2005, which could complicate things for the Republican-led commission.

AP Photo/Toby Talbot
Brendan Bordelon
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Brendan Bordelon
Dec. 6, 2017, 8 p.m.

Despite a last-minute push from activists and lawmakers to delay the Federal Communications Commission’s scheduled vote, most net-neutrality supporters are privately resigned to passage next week of Chairman Ajit Pai’s plan to rescind rules prohibiting internet providers from blocking, throttling or prioritizing web traffic. But even as they brace for disappointment, advocates are already mapping out a strategy to knock down the FCC’s reversal in court—and they’re planning to drag the argument further back in time than the commission may have anticipated.

It’s virtually certain that Pai’s rollback will face a legal challenge in the early part of next year. Big-ticket items are almost always hauled before a judge, and the previous FCC spent two years successfully defending its own net-neutrality rules in court. This time around, plaintiffs will look to prove that the FCC’s about-face is “arbitrary or capricious,” based on a provision in the Administrative Procedure Act designed to prevent agencies from promulgating rule changes without sufficient evidence to back them up.

Whether the FCC can effectively defend its new framework will depend in part on whether judges defer to the agency’s analysis showing a slight drop in broadband-infrastructure investments since President Obama’s FCC passed strict net-neutrality rules in 2015. A significant portion of Pai’s draft order lays out those findings, which are based on a USTelecom study released this year, and their inclusion in such detail appears designed to head off a court challenge.

Net-neutrality supporters strongly dispute those findings, pointing to their own research showing that internet providers actually increased investments over the past two years. And the issue has become a bone of contention between the two sides. S. Derek Turner, a researcher with progressive tech group Free Press who authored a study claiming investment is up, knocked the FCC for relying on aggregate industry data instead of examining the cyclical investment flows of individual companies. But Hal Singer, an economist at George Washington University, said Free Press’s study is flawed due to its inclusion of investments outside the United States and business sectors not directly related to net neutrality.

Gus Hurwitz, a professor at the University of Nebraska College of Law, believes the focus on broadband investment by net-neutrality advocates is misplaced. He says courts won’t be looking to resolve that debate as much as simply confirm that the Republican-led agency did its due diligence. “The reality is the courts are almost certainly going to affirm the new order, for the same reasons that they affirmed the 2015 order,” Hurwitz said. “Courts are very deferential to agencies, particularly on factual issues.”

But broadband investment is unlikely to be the only issue raised by the plaintiffs. Tim Wu—a professor at Columbia Law School who coined the term “network neutrality”—says advocates will likely seek to push the debate back to at least 2005, when he says the FCC first adopted policies promoting net neutrality. If they’re successful in tying Pai’s reversal to steps taken by a Republican-led FCC 12 years prior, Wu believes net-neutrality advocates stand a good chance of defeating the measure in court.

Wu believes Pai would be on firmer legal footing if his draft order merely rolled back the 2015 classification subjecting internet providers to utility-style regulation, instead of also seeking to rescind the commission’s “bright line” rules prohibiting basic net-neutrality violations. He says a 2005 decision by President Bush’s FCC to sue local internet provider Madison River Communications over net neutrality means the commission may have to go much further back in the factual record to now justify scrapping the rules. The argument could even extend into the early 1970s; Wu points to rules put in place then to protect “over the top” data-processing services against what was then an AT&T telephone monopoly.

“The case may come down to whether the court buys the framing that this is about the ‘05 rules,” said Wu. “The FCC is going to say, ‘This is just about the 2015 rules and we’re just worried about [investment] incentives.’ And the plaintiffs are going to say, ‘No, this is a rule that’s been around in some version since 1970 and specifically been around since 2005, and where’s your explanation?’ And if [the FCC hasn’t] got anything, then they’re dead.”

Christopher Yoo, a professor at the University of Pennsylvania Law School, thinks the FCC has several arguments to choose from when explaining its reversal. “Part of the justification can simply be a new administration is in place that views these issues differently,” Yoo said. “And part of it can be evidence that the existing regime wasn’t working. But a third part of it can also be new market developments that suggest that a new policy is in order as well.”

It’s that last part where the FCC may have the most luck in pushing back on claims that it’s reversing a decades-long precedent on net neutrality without supporting evidence. With the advent of 5G wireless technology and autonomous vehicles, Yoo says, new technologies are coming online that could be hampered by hard net-neutrality rules. If the FCC argues that the internet marketplace has changed and innovation may be stymied, Yoo believes the courts will defer to the expert agency.

Wu disputes that notion, arguing that the 1983 Supreme Court decision Motor Vehicles Manufacturers Association v. State Farm holds that agencies must explain a rule reversal more thoroughly than a new rule. “I know other people are trying to spin it around,” Wu said. “They always say [courts] give deference … but State Farm is the precedent, and stuff gets struck down all the time. A lot of [Environmental Protection Agency] stuff is getting struck down right now, actually.”

In keeping with the increasingly tense back-and-forth over net neutrality, Yoo accused Wu and other net-neutrality supporters of engaging in their own legal spin. “They’re advocates trying to advance a position, and they believe they have a strong case,” Yoo said. “I think every advocate who backs a position believes that.”

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