//  3/21/17  //  Commentary

Among the communications law initiatives undertaken by the Obama-era FCC, none grabbed the public’s attention like the fight over net neutrality.  Indeed, the last time the Commission sent the issue out for public comment, it received over 4 million responses, many of them texted in by members of the public.  Now that Republicans constitute a majority of the Commission, the natural question is:  What’s next?

First, a quick recap of where we are and how we got here.  Briefly, net neutrality regulation refers to a set of obligations placed on broadband ISPs (companies like Comcast and Verizon) regarding the treatment of traffic traversing their networks.  Under nearly all net neutrality proposals, ISPs would have an obligation not to block or unilaterally degrade traffic originating from certain sources (say, Hulu).  More controversially, most proposals also limit ISPs’ ability to prioritize certain traffic in exchange for payment—imagine Netflix paying to prioritize its own traffic over Comcast’s network at the expense of rival services, for example.

The FCC struggled for many years to find a strong legal basis for net neutrality requirements, losing twoprominent D.C. Circuit cases in the process.  In 2015, partially in response to these losses, the FCC took the dramatic step of reclassifying broadband ISPs as “telecommunications carriers” under Title II of the Communications Act.  The result is that the FCC currently has broad jurisdiction over ISPs’ practices—similar to the jurisdiction that the Commission has traditionally exercised over telephone companies.  And, in a major victory for the FCC, the D.C. Circuit upheld both the Commission’s reclassification and the use of its new Title II authority to impose net neutrality obligations.  The ISPs thereafter filed petitions for rehearing to challenge that decision.

That’s where things stood on the eve of the election.  Not surprisingly, the incoming FCC majority is expected to change things.  Indeed, both of the current Republican members of the Commission dissented from the FCC’s reclassification decision and have been critical of the substance of net neutrality regulation.  The outstanding question is just how dramatic the changes will be.

Assuming that there are no further developments in the courts (an issue I’ll revisit if and when we see judicial movement), there are two major possibilities, one more modest and the other more extreme. 

The more modest possibility is that the FCC leaves the Title II framework in place but chips away at it in various ways.  The Title II order itself left many details affecting the stringency of the new rules unresolved.  The FCC could, if it chose, simply resolve many of these details in an ISP-friendly manner.  In addition, the FCC could use its rulemaking authority (in conjunction with its statutory “forbearance” authority) to lessen or eliminate obligations contained in the Title II order, even while keeping the Title II framework in place.  The Commission has signaled it will pursue this route in connection with the recently issued broadband privacy rules, which are themselves rooted in Title II.  Finally, and this is still within a more modest course, the FCC could simply fail to enforce many of the requirements currently on the books, especially in situations where the requirements themselves do not obviously require a particular result.  The FCC’s abandonment of its inquiries into several mobile carriers’ “zero-rating” plans is one example where this has already occurred.

The more extreme possibility, of course, is that the FCC will seek to do away with the Title II framework entirely.  To see why this is a real possibility, it’s important to understand that ISPs view Title II as standing for more than net neutrality or any particular set of requirements.  Rather, many ISPs view Title II as an existential threat hanging over the industry.  That is because Title II puts the full panoply of common-carrier-style regulation—including regulation of the prices that consumers pay for broadband service—on the table.  And although the Obama-era FCC publicly disclaimed interest in such forms of heavier regulation, ISPs fear that a future FCC (presumably one back in Democratic hands) will sing a different tune.

Not surprisingly, the more extreme possibility carries with it greater legal risk.  Legally, in order to remove ISPs from Title II, the Commission would have to “re-reclassify” ISPs by determining that they offer an “information” and not a “telcommunications” service.  On this question, the FCC receives Chevron deference.  And for that reason, it has thus far enjoyed relatively broad authority to move ISPs from one box to the other, as the Obama-era Commission did.

That said, I could imagine a day will come when the courts balk at the FCC flipping back and forth on this core question.  This is partly because, although the ultimate issue is a legal one on which the FCC enjoys deference, there are underlying factual questions that bear on it.  In its 2015 order, the FCC had to explain why it was resolving these factual issues differently than it had resolved them in 2005, when it had first decided that ISPs were not telecommunications carriers.  Presumably the Trump FCC will have to do the same but without the benefit of ten years of technological evolution to support its flip-flop.  Does that make re-reclassification impossible?  I don’t think so.  But it does make it substantially trickier.

Ultimately, as will be true of many agencies, the next four years are likely to see a marked turn toward deregulation at the FCC.  The important questions are how big that turn will be, how it will be achieved, and to what extent the courts will go along with it. 

On those questions, stay tuned.


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