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Media Alerts - Verizon v. FCC
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January 14, 2014
  Verizon v. FCC
Headline: D.C. Circuit upholds FCC's general authority to regulate broadband providers' treatment of internet traffic but vacates net neutrality rules.

Area of Law: Telecommunications Act, Administrative Law

Issue Presented: Whether the FCC has the authority to promulgate rules governing broadband providers' treatment of internet traffic and whether it can impose disclosure, anti-blocking, and anti-discrimination requirements on internet service providers.

Brief Summary: As part of an ongoing effort to foster Internet openness, commonly referred to as "net neutrality," the Federal Communications Commission promulgated the Open Internet Order (OIO), which obligates broadband providers to treat all Internet traffic the same regardless of its source. The order has three parts: 1) it requires disclosure of accurate information regarding practices, performance, and terms of broadband services; 2) it prohibits broadband providers from blocking content, applications, services, and non-harmful devices other than for reasonable network management; and 3) it imposes an anti-discrimination requirement, prohibiting broadband providers from granting preferred status to some content providers. In support of its order, the Commission relied on section 706 of the Telecommunications Act, directing it to encourage the deployment of broadband telecommunications capability. Verizon challenged the Order, claiming 1) that the FCC lacked the statutory authority to promulgate the rules, 2) that the rules were arbitrary and capricious, and 3) that they violated the Communications Act by treating broadband providers as common carriers.

A divided panel of the United States Court of Appeals for the District of Columbia Circuit upheld the FCC's authority to enact measures encouraging the deployment of broadband infrastructure and held that the FCC reasonably interpreted section 706 of the Telecommunications Act as empowering it to promulgate rules governing the treatment of internet traffic. Applying Chevron, the court found that the FCC had adequately justified its conclusion that section 706 constituted an affirmative grant of regulatory authority and that the Commission had offered a reasoned explanation for the change in its long-standing interpretation of that section.

Turning to Verizon's third argument, however, the court noted that the FCC's general authority does not allow the Commission to impose requirements that contravene express mandates in the statute. The court observed that the FCC classifies broadband providers not as providers of "telecommunications services" but as providers of "information services." Because 47 U.S.C. ยง 153(51) permits telecommunications carriers to be treated as common carriers only to the extent they provide telecommunications services, the FCC's still-binding classification precludes treating broadband providers as common carriers. Examining the operation of the OIO, the court concluded that the anti-discrimination and anti-blocking provisions in fact regulated broadband providers as common carriers because they prevented providers from making individualized decisions regarding whether and on what terms to deal, compelling them instead to "serve the public indiscriminately." The court found that disclosure rules, which did not constitute per se common carrier obligations, were severable and operated independently.

Judge Silberman concurred in part and dissented in part, agreeing with the majority that the anti-discrimination and anti-blocking provisions of the OIO treated broadband providers as common carriers but disagreeing that section 706 otherwise provides the FCC with authority to promulgate the rules. Judge Silberman noted that his disagreement with the majority is "important since the majority opinion suggests possible regulatory modifications that might circumvent the prohibition against common carrier treatment."

For the full text of this opinion, please visit
http://www.cadc.uscourts.gov/i...le/11-1355-1474943.pdf.

Panel: Rogers, Tatel, and Silberman

Argument Date: September 9, 2013

Date of Issued Opinion: January 14, 2014

Docket Number: 11-1355

Decided: Affirmed in part, Reversed in part

Case Alert Author: Joseph T. Maher, Jr.

Counsel (if known): Helgi C. Walker, Eve Klindera Reed, William S. Consovoy, Brett A. Shumate, Walter E. Dellinger, Anton Metlitsky, Samir C. Jain, Carl W. Northrup, Michael Lazarus, Andrew Morentz, Michael E. Glover, William H. Johnson, Stephen B. Kinnaird, and Mark A. Stachiw for appellant. Sean A. Lev, Catherine G. O'Sullivan, Nickolai G. Levin, Peter Karanjia, Jacob M. Lewis, Joel Marcus, and Matthew J. Dunne for appellee.
Author of Opinion: Tatel

Dissent by: Silberman

Case Alert Circuit Supervisor: Elizabeth Beske, Ripple Weistling

    Posted By: Ripple Weistling @ 01/14/2014 02:43 PM     DC Circuit  

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