//  5/2/17  //  Quick Reactions

It’s official: FCC Chairman Ajit Pai has released a Notice of Proposed Rulemaking that would rollback the FCC’s 2015 rule that placed Internet service providers under Title II of the Communications Act.  In a prior post, I described this as the “more extreme” of the two options facing the Republican-majority Commission, the more modest being keeping the Title II framework in place while pruning it back in various ways.

I have a somewhat boringly middle-of-the-road (or shall we call it “refreshing”) take on all this.  I wasn’t sure the Obama-era FCC needed to resort to Title II to sensibly regulate ISPs but, now that the Title II framework is in place, I’m not sure it makes sense for the Commission to get rid of it either. Mostly, I think the debate over the classification of ISPs distracts attention from the substance of the policy issues in the area.  Explaining a bit about why may also illuminate some potential legal vulnerabilities in Chairman Pai’s “re-reclassification” proposal.

Whether ISPs are subject to regulation under Title II of the Communications Act depends on if they offer “telecommunications,” which the Act defines as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” As the Supreme Court explained in Brand X, whether an entity offers such a service depends on consumer perception: When a customer buys Internet access from an ISP, does she perceive herself to be purchasing a pure transmission service or instead a service that includes transmission but that also provides closely integrated “information-processing capabilities” such as ISP-provided e-mail functions, network security features, and “reverse DNS lookup”?

Although the courts have afforded the FCC Chevron deference in making the ultimate classification decision, answering this question also clearly involves factual determinations.  Thus, when the Obama-era FCC decided that ISPs did offer a pure transmission service, reversing the Bush Administration position, it explained that it was doing so because, among other things, fewer customers were using “add-on” services (like e-mail) provided by their ISPs, thus suggesting that those services were no longer “integral” to the service offering.

The problem is that answering these kinds of questions does little to illuminate the policy disagreements infecting the area. The fact that fewer customers use their ISP-provided e-mail addresses today than in 2002 does not tell us very much about whether ISPs should be subject to more or less heavy-handed forms of regulation.  To focus on the right set of questions, I think the FCC should consider leaving Title II in place while relying on the Commission’s statutory “forbearance” authority to eliminate what it considers to be regulatory overreach by the prior FCC. That authority essentially allows the Commission to say, even assuming ISPs are telecommunications carriers, we don’t think this or that requirement should apply.  And in doing so, the Commission generally must focus on issues such as whether there is sufficient competition, whether consumers are helped or harmed by the requirement in question, etcetera.  In other words, the very questions that should drive policy in the area.

Going whole hog against Title II also puts the FCC in more dangerous legal waters for much the same reason. As a matter of black-letter law, the FCC has the authority to move back and forth between reasonable interpretations of its statute, including on the classification question. However, as Leah Litman and I explained in a prior post, these kinds of cases are often driven by background factors as much as black-letter doctrine. And the FCC reversing course only two years after its last statement on the topic may appear fishy to some judges, especially since whether an ISP offers “telecommunications” or something else does not obviously depend on how many Republicans are on the Commission at any given time.

Critics of Title II are likely to respond with something like, “c’mon, we all know that it was the Obama FCC that ‘reverse engineered’ the facts surrounding the classification question in order to reach its preferred regulatory outcome.  We are just going back to the status quo ante.”  I do think there’s something to that response. But given the time that had elapsed between the Bush FCC’s original pronouncement and the Obama reclassification, the Obama-era FCC could at least plausibly claim that its decision was driven by factual changes.  The current FCC will presumably have to say that the prior FCC, just two years ago, flat got it wrong.  And that is an inherently more difficult place for an agency to be.


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