Home First Challenge to FCC Net Neutrality: Is Splitting Hairs Legal?

First Challenge to FCC Net Neutrality: Is Splitting Hairs Legal?

Last week’s issuance by the Federal Communications Commission of rules to protect what some still call “net neutrality” was destined to be legally challenged by someone, on some grounds – that’s the nature of regulatory government. (In a pre-emptive strike, Verizon filed its challenge last January.) But in the first of what will probably be several challenges since the order, the advocacy group Free Press makes one and only one argument.

It cuts to the quick, and then stops: The FCC can’t adopt two sets of rules for a “mobile Internet” and a “fixed Internet,” while pretending to uphold “one Internet” to the public.

The technical argument Free Press makes in its Petition of Review to the First Circuit Court of Appeals, filed yesterday, is that it violates the Communications Act of 1934 – and that argument wasn’t actually very technical. The substantive argument, in its entirety, is this: “Petitioners seek review of the FCC’s decision to adopt one set of rules for broadband access via mobile platforms and a different set of rules for broadband access via fixed platforms.”

It would not be the first formal argument to an appeals court that was appreciably shorter than the corresponding argument to the public at large. The group’s policy director, Matt Wood, said this as part of a longer public statement yesterday: “Our challenge will show that there is no evidence in the record to justify this arbitrary distinction between wired and wireless Internet access. The disparity that the FCC’s rules create is unjust and unjustified. And it’s especially problematic because of the increasing popularity of wireless, along with its increasing importance for younger demographics and diverse populations who rely on mobile devices as their primary means for getting online.”

“Would you like to shake hands with Thing 1 and Thing 2?”

Free Press’ arguments (both the short and long versions) point to a serious problem that FCC Chairman Julius Genachowski has faced with this topic ever since his appointment by Pres. Obama: It isn’t exactly clear in the law whether the FCC has the authority to regulate how Internet service providers manage transactions and manage their own assets. That authority should be bestowed on the FCC – if there’s to be any bestowing at all – by Congress.

That the FCC has even issued such an order at all indicates that, rather than amending the Communications Act as only it can do, Congress punted, directing the agency with public statements rather than with laws to declare how it plans to regulate Internet fairness. That Act gives the Federal Trade Commission authority to regulate so-called “information services” under Title I, and the FCC authority to regulate “telecommunications services” under Title II. The law has not determined whether the Internet falls under Title I or Title II, and Congress is unwilling to make new law declaring what space it does fall in.

In April 2010, the DC Court of Appeals found against the FCC and in favor of Comcast. The decision underscored the fact that Congress never granted the FCC the authority to tell Comcast, or anyone else, how it can manage the traffic of its own customers over its own equipment.

The following month, Chairman Genachowski (over the objections of Republican commissioners) boldly attempted declaring a “third way,” suggesting that it was possible to regulate the Internet as a telecom service when it behaved like a telecom service and like an information service when it was more like that instead. But amid the likelihood of strong challenges from Comcast, Verizon, and others, the FCC backed down, eventually arriving at a draft which evolved into last week’s final order.

No unreasonable discrimination (where applicable)

The Commission’s current strategy is to draw a line around every aspect of the Internet that has survived challenges, or not been challenged, to this point. That line does not form a perfect square, as indicated by its reinterpretation of the “basic principles” first set forth by former chairman Michael Powell. As Free Press undoubtedly noted, with almost the same breath, the FCC under Genachowski says there is one Internet while defining it to be two:

To provide greater clarity and certainty regarding the continued freedom and openness of the Internet, we adopt three basic rules that are grounded in broadly accepted Internet norms, as well as our own prior decisions:

i. Transparency. Fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and terms and conditions of their broadband services;

ii. No blocking. Fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful Web sites, or block applications that compete with their voice or video telephony services; and

iii. No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic.

We believe these rules, applied with the complementary principle of reasonable network management, will empower and protect consumers and innovators while helping ensure that the Internet continues to flourish, with robust private investment and rapid innovation at both the core and the edge of the network.

Genachowski certainly knows he is treading on dangerous territory. The Appeals Court in the Comcast case explicitly ruled that principles outlined by the FCC are not, by definition, rules; here, the Commission has taken three of Powell’s four principles, declared them to be rules, and attached the fourth as a “principle” in hopes that it will just slip right by. There’s also the problem at the crux of Free Press’ argument: The order establishes “fixed broadband” as the alternate flavor of “mobile broadband,” leverages the FCC’s authority to regulate fixed on its authority to regulate mobile, and then establishes some “rules” to fixed that do not extend to mobile (rule iii).

“At this time”

The justification for the FCC making this distinction is provided on page 32 of the order. It’s a leap of logic that must have attorneys everywhere salivating. Having established that cable companies provide more Internet service to the home, and carriers more service to the phone, the Commission declares that it has a special duty to regulate all traffic on fixed and mobile tiers separately, precisely because it’s so difficult to distinguish the two from one another once they’re on the same network:

Although one purpose of our open Internet rules is to prevent blocking or unreasonable discrimination in transmitting online traffic for applications and services that compete with traditional voice and video services, we determine that open Internet rules applicable to fixed broadband providers should protect all types of Internet traffic, not just voice or video Internet traffic. This reflects, among other things, our view that it is generally preferable to neither require nor encourage broadband providers to examine Internet traffic in order to discern which traffic is subject to the rules. Even if we were to limit our rules to voice or video traffic, moreover, it is unlikely that broadband providers could reliably identify such traffic in all circumstances, particularly if the voice or video traffic originated from new services using uncommon protocols. Indeed, limiting our rules to voice and video traffic alone could spark a costly and wasteful cat-and-mouse game in which edge providers and end users seeking to obtain the protection of our rules could disguise their traffic as protected communications.

We recognize that there is one Internet (although it is comprised of a multitude of different networks), and that it should remain open and interconnected regardless of the technologies and services end users rely on to access it. However, for reasons discussed… below related to mobile broadband – including the fact that it is at an earlier stage and more rapidly evolving – we apply open Internet rules somewhat differently to mobile broadband than to fixed broadband at this time.

The three words that could get the Commission into the deepest trouble are perhaps the most seemingly innocuous: “at this time.” They appear to reserve the right for the FCC to extend and revise its remarks, to borrow a phrase from Congress, and also to concede that these rules are but temporary provisions in lieu of broader and more definitive law. Since that law is unlikely to come from Congress for at least two more sessions, the word “open” as it refers to the FCC’s interpretation of the Internet may very well mean “open question.”

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