Showing 9 of 184 Publications for "net neutrality"

Amicus Brief, DANIEL BERNINGER v. FEDERAL COMMUNICATIONS COMMISSION, SCOTUS

Amicus Brief This case raises significant questions about the thoroughness with which a court must review agency decisionmaking—or the extent to which a court may instead defer to that decisionmaking—when the agency has reversed a prior policy determination in the absence of a change in applicable law.

Summary

This case raises significant questions about the thoroughness with which a court must review agency decisionmaking—or the extent to which a court may instead defer to that decisionmaking—when the agency has reversed a prior policy determination in the absence of a change in applicable law.

The Open Internet Order (“OIO”) issued by the Federal Communications Commission (“FCC” or “Commission”) presents such a policy reversal. The FCC ostensibly rooted the OIO in sufficient factual and legal analysis, but closer examination reveals that the OIO is based upon implausible factual assertions, questionable factual reinterpretations, and the strategic disavowal of long-defended statutory interpretation, all in support of a radical change in federal telecommunications policy that raises questions of vast economic and political significance.

Nevertheless, as discussed in Part I, the D.C. Circuit opinion affirming the OIO reflexively afforded substantial deference to the FCC, declining to consider serious questions about the reasonableness or permissibility of the FCC’s decisionmaking process. That decision is both in tension with this Court’s precedents and, more, raises exceptionally important and previously unaddressed questions about this Court’s precedents on judicial review of agency changes of policy.

As discussed in Part II, recent empirical work suggests that there are systematic problems with judicial review of agency changes in policy. These problems—respecting the substantive quality of agency and judicial decisions as well as judicial understanding of, or compliance with, this Court’s precedents governing such review—have led to consistently inconsistent review of agency policy changes in the circuit courts. Judicial review of agency policy changes thus presents a certiorari doublewhammy: there is a need for this Court to clarify existing precedent regarding judicial review of such policy changes and to address inconsistent application of that precedent, as well as for this Court to consider whether evidence of systematically problematic decisionmaking when agencies change policies militates in favor of a more searching standard of review.

Part III discusses how the D.C. Circuit and the Commission’s OIO implicate these concerns.

A new article by Professors Cass Sunstein and Adrian Vermeule highlights the exceptional significance of this issue. See Cass R. Sunstein & Adrian Vermeule, The Morality of Administrative Law, HARV. L. REV. (forthcoming 2018). In discussing empirical evidence collected by Professors Kent Barnett and Christopher Walker (discussed in Part II), Sunstein and Vermeule note that there is a “discrepancy between the law on the books and the law in action” when it comes to how courts review changes in agency policy. Id. (manuscript at 24) (https://papers.srn.com/abstract_id=3050722).

In National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005), this Court held that an agency’s alteration of policy is not grounds for heightened scrutiny. Id. at 981 (“Agency inconsistency is not a basis for declining to analyze the agency’s interpretation under the Chevron framework. Unexplained inconsistency is, at most, a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act.”). But, as Sunstein and Vermeule observe, “Brand X notwithstanding, the Court just isn’t particularly clear or consistent about the role of consistency under Chevron.” Sunstein & Vermeule, supra (manuscript at 23-24 n.159).

Indeed, “[a]t the level of individual cases, although no subsequent case has denied the rule expressly laid out in Brand X, opinions have occasionally adverted to consistency as a Chevron factor—including opinions for the Court.” Id. (ms. at 23). Moreover, contrary to the rule laid out in Brand X, “[a]t the level of large-N research, recent work by Chris Walker and Kent Barnett shows that judges in fact tend to defer more heavily to consistent agency interpretations.” Id. (ms. at 23-24).

In this instance, it seems likely that the policy under review will reverse course yet again, with the agency returning to the pre-OIO interpretation of the
law and issuing new rules consistent with that interpretation. Indeed, it must be acknowledged that the FCC could reverse the OIO as soon as December of this year. Under ordinary circumstances this would appear to moot, or at least substantially lessen, the concerns raised by petitioners here.

But the foreseeability of significant administrative policy changes—in this case and elsewhere—abetted by the precedent of substantial deference established in this case, militates in favor of the Court granting
certiorari. Should the FCC reverse the OIO, it is a foregone conclusion that supporters of the current order will challenge that reversal in a proceeding that will raise many of the same legal concerns currently at issue. The issuance of a new rule will thus not moot the issues in this case, but simply raise the precise issues yet again. Indeed, without clear guidance from this Court, there is every reason to believe the process will become an endless feedback loop—in the case of this regulation and others—at great cost not only to regulated entities and their consumers, but also to the integrity of the regulatory process.

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Telecommunications & Regulated Utilities

Privacy Comments, Restoring Internet Freedom NPRM

Regulatory Comments As the Commission’s NPRM notes, the 2015 Open Internet Order “has weakened Americans’ online privacy by stripping the Federal Trade Commission — the nation’s premier consumer protection agency — of its jurisdiction over ISPs’ privacy and data security practices.”

Summary

As the Commission’s NPRM notes, the 2015 Open Internet Order “has weakened Americans’ online privacy by stripping the Federal Trade Commission — the nation’s premier consumer protection agency — of its jurisdiction over ISPs’ privacy and data security practices.”1 The Restoring Internet Freedom NPRM further notes that:

To address the gap created by the Commission’s reclassification of broadband Internet access service as a common carriage service, the Title II Order called for a new rulemaking to apply section 222’s customer proprietary network information provisions to Internet service providers. In October 2016, the Commission adopted rules governing Internet service providers’ privacy practices and applied the rules it adopted to other providers of telecommunications services. In March 2017, Congress voted under the Congressional Review Act (CRA) to disapprove the Commission’s 2016 Privacy Order, which prevents us from adopting rules in substantially the same form.

The Restoring Internet Freedom NPRM proposes to return to the status quo in place before the Commission adopted its 2015 Open Internet Order with respect to privacy rules: not to adopt any new FCC rules, and leave regulation of privacy to the FTC.3 We offer these comments in response to the Commission’s request regarding that proposal.

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Telecommunications & Regulated Utilities

Policy Comments, Restoring Internet Freedom NPRM

Regulatory Comments "Federal administrative agencies are required to engage in “reasoned decisionmaking” based on a thorough review and accurate characterization of the record. Their analysis must be based on facts and reasoned predictions; it must be rooted in sound economic reasoning: it must be logically coherent..."

Summary

“Federal administrative agencies are required to engage in “reasoned decisionmaking” based on a thorough review and accurate characterization of the record. Their analysis must be based on facts and reasoned predictions; it must be rooted in sound economic reasoning; it must be logically coherent; it must not entail subterfuge or misleading statements. On even these most basic grounds the 2015 OIO falls short.

The entire open Internet rulemaking enterprise is an exercise in post hoc rationalization — the formulation of policy, not statutory interpretation. Net neutrality was determined by certain activists to be “necessary;” proponents were unable to get it from Congress; the FCC was willing; and it tried at least three times to cobble together some statutory basis to justify its preference for open Internet rules, as opposed to determining that such rules were necessary to enforcing a particular statutory provision.

The post hoc/ultra vires problem with the 2015 OIO is disturbingly similar to the one at issue in State Farm, which sets the standard by which the sufficiency of the Commission’s analysis is judged. In that case, the Court held that an agency’s (NHTSA’s) decisionmaking did not follow from the anal- ysis it undertook, nor the statutory purpose it purported to further. The same is true here. If deployment really were the aim of the 2015 OIO, the FCC could have directly encouraged it through any number of more direct (and almost certainly more effective) means. Instead, the Commission concocted a regulatory Rube Goldberg apparatus to do so only, at best, indirectly — and in a way that happened also to further a different, arguably ultra vires objective. Perhaps most tellingly, the

Commission was forced to undertake a series of actions, superficially independent of the 2015 OIO, in order to engineer several of the factual predicates necessary to enable it to justify its rule under the statute. An agency properly acting within the scope of its au- thority would not have to work so hard to fit the round peg of its chosen policy into the square hole of its statute.”

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Telecommunications & Regulated Utilities

The Internet Conduct Rule Must Die

TOTM It’s fitting that FCC Chairman Ajit Pai recently compared his predecessor’s jettisoning of the FCC’s light touch framework for Internet access regulation without hard evidence . . .

It’s fitting that FCC Chairman Ajit Pai recently compared his predecessor’s jettisoning of the FCC’s light touch framework for Internet access regulation without hard evidence to the Oklahoma City Thunder’s James Harden trade. That infamous deal broke up a young nucleus of three of the best players in the NBA in 2012 because keeping all three might someday create salary cap concerns. What few saw coming was a new TV deal in 2015 that sent the salary cap soaring.

Read the full piece here.

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Telecommunications & Regulated Utilities

Clearing up the Senate’s confusion on FCC privacy rules

Popular Media At an oversight hearing on Wednesday, the Senate Commerce Committee confronted Federal Communications Commission Chairman Pai with questions over last week’s partial stay of the . . .

At an oversight hearing on Wednesday, the Senate Commerce Committee confronted Federal Communications Commission Chairman Pai with questions over last week’s partial stay of the commission’s broadband privacy order. While privacy rules are certainly highly complicated, comments from some senators telegraphed a fundamental misunderstanding of what has been done to date to protect consumers, and given the current ecosystem, what the FCC’s proper role should be going forward.

Read the full piece here.

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Telecommunications & Regulated Utilities

Class(less) Action: Undermining Consumers at the FCC

Popular Media Over the weekend, Sen. Al Franken and Federal Communications Commission Commissioner Mignon Clyburn issued an impassioned statement calling for the FCC to thwart the use of mandatory arbitration clauses in internet service providers’ consumer service agreements ...

Over the weekend, Sen. Al Franken and Federal Communications Commission Commissioner Mignon Clyburn issued an impassioned statement calling for the FCC to thwart the use of mandatory arbitration clauses in internet service providers’ consumer service agreements — starting with a ban on mandatory arbitration of privacy claims in the chairman’s proposed privacy rules. Unfortunately, their call to arms rests upon a number of inaccurate or weak claims. Before the commissioners vote on the proposed privacy rules later this week, they should carefully consider whether consumers would actually be served by such a ban.

Read the full piece here.

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Telecommunications & Regulated Utilities

A Critical Assessment of the Latest Charge of Google’s Anticompetitive Bias

ICLE White Paper Late last year, Tim Wu of Columbia Law School (and now the White House Office of Management and Budget), Michael Luca of Harvard Business School (and a consultant for Yelp), and a group of Yelp data scientists released a study claiming that Google has been purposefully degrading search results from its more-specialized competitors in the area of local search.

Summary

Late last year, Tim Wu of Columbia Law School (and now the White House Office of Management and Budget), Michael Luca of Harvard Business School (and a consultant for Yelp), and a group of Yelp data scientists released a study claiming that Google has been purposefully degrading search results from its more-specialized competitors in the area of local search.  The authors’ claim is that Google is leveraging its dominant position in general search to thwart competition from specialized search engines by favoring its own, less-popular, less-relevant results over those of its competitors:

To improve the popularity of its specialized search features, Google has used the power of its dominant general search engine. The primary means for doing so is what is called the “universal search” or the “OneBox.”

This is not a new claim, and researchers have been attempting (and failing ) to prove Google’s “bias” for some time. Likewise, these critics have drawn consistent policy conclusions from their claims, asserting that antitrust violations lie at the heart of the perceived bias.

But the studies are systematically marred by questionable methodology and bad economics. The primary difference now is the saliency of the “Father of Net Neutrality,” Tim Wu, along with a cadre of researchers employed by Yelp (one of Google’s competitors and one of its chief antitrust provocateurs ), saying the same thing in a new research paper, with slightly different but equally questionable methodology, bad economics, and a smattering of new, but weak, social science.

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Antitrust & Consumer Protection

Our amicus brief supporting en banc review of the court’s Open Internet Order decision

TOTM Last week the International Center for Law & Economics and I filed an amicus brief in the DC Circuit in support of en banc review of the court’s . . .

Last week the International Center for Law & Economics and I filed an amicus brief in the DC Circuit in support of en banc review of the court’s decision to uphold the FCC’s 2015 Open Internet Order.

In our previous amicus brief before the panel that initially reviewed the OIO, we argued, among other things, that…

Read the full piece here.

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Telecommunications & Regulated Utilities

Comments, Protecting the Privacy of Customers of Telecom Services

Regulatory Comments The NPRM and many of the comments supporting it reflect an ill-considered approach to privacy regulation for ISPs.

Summary

The NPRM and many of the comments supporting it reflect an ill-considered approach to privacy regulation for ISPs. Getting regulation right is always difficult, but it is all the more so when confronting evolving technology, inconsistent and heterogeneous consumer demand, and intertwined economic effects that operate along multiple dimensions.

[S]ecuring a solution that increases social welfare[] isn’t straightforward as a practical matter. From the consumer’s side, the solution needs to account for the benefits that consumers receive from content and services and the benefits of targeting ads, as well as the costs they incur from giving up data they would prefer to keep private. Then from the ad platform’s side, the solution needs to account for the investments the platform is making in providing content and the risk that consumers will attempt to free ride on those investments without providing any compensation—in the form of attention or data—in return. Finally, the solution must account for the costs incurred by both consumers and the ad platform including the costs of acquiring information necessary for making efficient decisions.

The NPRM fails adequately to address these issues, to make out an adequate case for the proposed regulation, or to justify treating ISPs differently than other companies that collect and use data.

Perhaps most important, the NPRM also fails to acknowledge or adequately assess the actual market in which the use of consumer data arises: the advertising market. Whether  intentionally or not, this NPRM is not primarily about regulating consumer privacy; it is about keeping ISPs out of the advertising business. But in this market, ISPs are upstarts
challenging the dominant position of firms like Google and Facebook.

Placing onerous restrictions upon ISPs alone results in either under-regulation of edge providers or over-regulation of ISPs within the advertising market, without any clear justification as to why consumer privacy takes on different qualities for each type of advertising platform. But the proper method of regulating privacy is, in fact, the course that both the FTC and the FCC have historically taken, and which has yielded a stable, evenly administered regime: case-by-case examination of actual privacy harms and a minimalist approach to ex ante, proscriptive regulations.

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Telecommunications & Regulated Utilities