The FCC’s Rulemaking Power

Joseph Feldman – On February 26, 2015, the Federal Communications Commission (“FCC”) decided to reclassify broadband under Title II of the Communications Act of 1934 with a 3-2 vote. This decision allows the FCC to regulate broadband services using rules originally created for telephone lines, where Internet Service Providers (“ISPs”) had otherwise been self-regulating. Before the February 26 decision, broadband was characterized as “Information Services.” Now, ISPs are classified under Title II as “common carriers,” meaning communications that are transferred through wire or radio.

The Classification of broadband services is the main issue regarding net neutrality because, under The Communications Act of 1934, the FCC only has complete authority over certain classifications, such as Common Carrier. However, under Title I of the act, the FCC does have ancillary authority to regulate other classifications. Part of the FCC’s ancillary power was taken away in Comcast Corp. v. F.C.C. In Comcast, the Court ruled that the FCC does not have ancillary authority to regulate ISPs management practices. The Courts main reason for their decision was due to the classification of broadband services as information services rather than telecommunication services, which would render ISPs as common carriers. In order for the FCC to be able to regulate ISP management practices they need to reclassify broadband services or may use authority other than ancillary to regulate ISPs, such as section 706 of the Act.

The FCC used its rulemaking power to make this reclassify broadband services. Under the terms of this power, the FCC must open the proceedings to public comment. News reports indicate that the agency received a total of 3.7 million comments from people all over the United States, which the commissioners used to make a more informed decision as to how to vote. Because most of the comments promoted a neutral Internet, the FCC had to plan a path that would allow it. During the first week of February, the FCC submitted a proposed plan: the path the FCC will take to achieve an Internet where ISPs cannot favor one website over another.

This issue of net neutrality has been a serious, ongoing debate in the United States. It has been discussed in presidential addresses, in comedy rants, and on websites. Even though the FCC voted to characterize ISPs as common carriers, the debate is not over.

There are two ways in which the FCC’s decision may be overruled—judicially or legislatively. In order for the judicial system to prevent the FCC from regulating broadband as a common carrier, interested parties, such as the ISPs and other telecommunication companies, would have to bring a preventative suit seeking to prevent that FCC from doing so. There is precedent for such action, as when Verizon brought a suit against the FCC in order to prevent regulating broadband services under the Open Internet Order. On Monday, April 13, 2015, the FCC published the Net Neutrality Rules in the Federal Register, paving the way for interested parties to begin filing lawsuits.

AT&T is a leader in the fight against the FCC’s elected plan. The day that the FCC’s decision was announced, AT&T’s Senior Executive Vice President for External and Legislative Affairs, Jim Cicconi, published thoughts on the decision on the company’s public policy blog.

Mr. Cicconi contends that the framework from the 1930’s–before the Internet existed–should not be used to regulate modern-day technology. Further, he argues  that the decision was “made without clear authorization from [C]ongress” and that Congress or the courts will nullify the FCC’s decision.

He believes that this argument is strong because the FCC decision was decided by a narrow margin. This is important because, not only did the FCC decide this issue, the commissioners also had to consider whether they have the authority to make this decision. AT&T reasons that a 5-0 decision would not leave room for argument, but that a 3-2 decision, “particularly on issues of such broad scope,” allows for room to examine the basis of the decision. Although a unanimous decision would not prevent AT&T from bringing a suit against the FCC, a split does make it more probable that the FCC does not have complete authority over this issue.

AT&T is adamant on its stance to overturn this decision. The corporation believes that the FCC’s decision, considering its repercussions, is the worst way to achieve a neutral Internet because it believes that there are better alternative means. Since 2010, AT&T has supported FCC former Chairman Genachowski’s proposed regulations, as well as the current FCC Chairman Tom Wheeler’s Section 706 regulatory framework. The 706 regulations would allow the FCC to regulate the “infrastructure” of broadband services, rather than the service they provide.  AT&T believes that this is a more reasonable and legally viable approach to net neutrality rather than the reclassification route that the FCC has chosen to take.

AT&T is not the only company to make a public announcement regarding the FCC’s decision. Verizon, in a more playful albeit serious tone, uploaded a statement in both Morse code and in old fashion typewriter format to make a point that the FCC is using dated regulations. Verizon’s argument is similar to AT&T’s argument that regulation from the 1930’s is an archaic way to standardize modern day Internet.

In order for the legislative branch to overrule the FCC, a law must be passed. Congress must adopt new legislation that would either necessarily limit the FCC’s power to make such decisions or codify the classification of the agency, if they believe it is enforceable. Because Congress was imparted to the FCC its agency powers, they have the authority to decide what the FCC can control under the Congressional Review Act.

Congresswoman Marsha Blackburn has already attempted to limit the FCC’s regulatory ruling by sponsoring a bill, the Internet Freedom Act, which would block the FCC’s net neutrality rules.  The Internet Freedom Act, introduced as H.R. 4070, simply states that the FCC may not reissue their open Internet Regulations.

As the net neutrality debate is approaching its close, there are only a few ways in which the FCC’s decision could be rendered invalid. With over 3.7 million people commenting to the FCC, it is clear that this is a significant issue in the public interest. Hopefully, either the legislative branch or the judicial branch will take quick action to resolve this seemingly never-ending controversy.

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