Addressing challenges to the Federal Communication Commission’s (FCC’s) 2015 Open Internet Order, the US Court of Appeals for the District of Columbia Circuit concluded that the FCC acted with proper authority when it reclassified broadband internet service as a telecommunications service, subject to common carrier regulation under Title II of the Communications Act. In a lengthy opinion, the Court rejected multiple petitions for review, and determined that the FCC permissibly forbore from applying certain provisions of the Act and lawfully promulgated new rules promoting internet openness. United States Telecom Association, et al. v. Federal Communications Commission and United States of America, Case No. 15-1063 (DC Cir., June 14, 2016) (Tatel, J).
Under Title II of the Communications Act of 1934, the FCC enjoys broad authority to regulate wireline and wireless communication. Title II mandates that common carriers offering telecommunication services cannot “make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services.”
The DC Circuit has examined FCC efforts to regulate broadband services on two prior occasions. In Comcast v. FCC (2010), the Court found that the FCC failed to cite any statutory authority that would justify its order compelling a broadband provider to adhere to certain open internet practices. In response to Comcast, the FCC relied on § 706 of the Telecommunications Act of 1996 to issue an order imposing transparency, anti-blocking and anti-discrimination requirements on broadband providers. Later, in Verizon v. FCC (2014), the DC Circuit vacated the order because the FCC had previously determined that broadband service was not a telecommunication service, and the Communications Act prohibits the FCC from applying Title II regulations to non-telecommunication services.
Following guidance from the DC Circuit in Verizon, the FCC issued the 2015 Open Internet Order, which reclassified mobile and wireline broadband, including interconnection agreements between broadband and edge providers, as a telecommunication service subject to Title II provisions.
Shortly after the 2015 Order was released, several parties filed petitions for review in multiple circuits. These cases were eventually consolidated in the DC Circuit. The petitioners, primarily comprising broadband providers and their associations, challenged the 2015 Order on statutory grounds, impermissible application of the regulatory framework to provisions in the Order, and First Amendment grounds.
The DC Circuit found that all of the petitioners’ challenges to the reclassification were without merit. First, the Court confirmed that the FCC had statutory authority and noted extensive evidence showing how consumer perception of broadband service offerings justified the decision to reclassify. Second, the Court rejected both the petitioners’ procedural and substantive challenges to the FCC’s decision to regulate interconnection arrangements under Title II. Third, the Court found that the FCC’s reclassification of mobile broadband as a “commercial mobile service” was reasonable and supported by evidence demonstrating the “rapidly growing and virtually universal use of mobile broadband service” today.
On the issue of forbearance, the DC Circuit disagreed with the petitioners, pointing out that the FCC followed an express statutory mandate requiring it to “forbear from applying any regulation or any provision” of the Communications Act if certain criteria were met. The DC Circuit upheld the FCC’s inclusion of new rules, citing Verizon as having established precedent on the existence of the FCC’s rulemaking authority under § 706.
Addressing the speech challenge, the Court held that because a broadband provider does not and is not understood by users to “speak” when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules. The new rules formally took effect in June 2015.
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