Amicus brief of ICLE and Administrative Law Scholars, US Telecom v. FCC, D.C. Circuit
The Order represents a substantial and unprecedented expansion of the FCC’s claimed authority. The Commission asserts authority to implement agency-defined policy by any means over the entire broadband communications infrastructure of the United States—in the words of FCC Chairman Wheeler, “[t]he most powerful network ever known to Man”[1]—under the auspices of FCC regulation; and it assumes the ability to regulate even beyond this already incredibly broad scope on an “ancillary” or “secondary” basis so long as such regulation has at least a Rube-Goldberg-like connection to broadband deployment. In the Order, the Commission claims authority that it has consistently disclaimed; it ignores this court’s holding in Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) (“Verizon”); and it bends to the point of breaking the statutory structure and purpose of the Communications and Telecommunications Acts. For all of these reasons, the Order should be rejected as exceeding the Commission’s statutory authority and as presenting and addressing major questions—questions of “deep economic and political significance,” see, e.g., King v. Burwell, No. 14-114, slip op. at 8 (2015)—that can only be addressed by Congress. See Randolph May, Chevron Decision’s Domain May Be Shrinking, THE HILL (Jul. 7, 2015).
The Commission’s authority is based in the 1934 Act, as modified by the 1996 Act. The general purpose of the 1934 Act was to establish and maintain a pervasively-regulated federal telephone monopoly built upon a relatively simple and static technology. This was the status quo for most of the 20th century, during which time the FCC had authority to regulate every aspect of the telecommunications industry—down to investment decisions, pricing, business plans, and even employment decisions. As technology progressed, however, competition found its way into various parts of the industry, upsetting the regulated monopoly structure. This ultimately led to passage of the 1996 Act, the general purpose of which was to deregulate the telecommunications industry—that is, to get the FCC out of the business of pervasive regulation and to rely, instead, on competition.[2] This objective has proven effective: Over the past two decades, competition has driven hundreds of billions of dollars of private investment, the telecommunications capabilities available to all Americans have expanded dramatically, and competition—while still developing—has increased substantially. The range of technologies available to every American has exceeded expectations, at costs and in a timeframe previously unimagined, and at a pace that leads the world.[3]
Today, many Americans are continuously engaged in online interactions. The Internet is the locus of significant political and educational activity; it is an indispensable source of basic and emergency news and information; it is a central hub for social interaction and organization; it is where people go to conduct business and find work; it is how many Americans engage with their communities and leaders; and it has generated hundreds of billions of dollars of annual economic activity.
Regulation of the Internet, in other words, presents questions of “vast ‘economic and political significance,’” Utility Air Regulatory Group v. Envtl. Prot. Agency, 134 S. Ct. 2427, 2444 (2014) (“UARG”), as substantial as any ever considered by a federal agency.
While the Commission disclaims authority to regulate significant swaths of the Internet ecosystem, the Order is nonetheless premised on interpretations of the 1934 Act that do give it authority over that ecosystem. This court should greet the Commission’s claimed authority with substantial skepticism. See UARG, 134 S. Ct. at 2444 (“When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy,’ we typically greet its announcement with a measure of skepticism.”) (emphasis added) (quoting Brown & Williamson v. Food & Drug Admin., 529 U.S. 120, 159 (2000) (“Brown & Williamson”). This is especially true given the statutory structure and purpose of the 1996 Act and the Commission’s historical, hands-off approach to the Internet. See King v. Burwell, slip op. at 15 (courts “must turn to the broader structure of the Act to determine the meaning” of language within a statute). Although this court addressed and rejected a challenge to the 2010 Order on these grounds, the Supreme Court has in the intervening months decided two cases—UARG and King v. Burwell—that revitalize the challenge, especially given the 2015 Order’s more aggressive posture.
The FCC claims that new rules were needed to prevent blocking, throttling, and discrimination on the Internet. But the poor fit between the Commission’s preferred regulatory regime and the statutory authority upon which it rests is manifest. This disconnect is made clear by the numerous effects of the regulations that the Commission must describe as “ancillary” or “secondary,” and the numerous statutory provisions that must be forborne from or otherwise ignored in order to make the Order feasible.
In short, the Order rests upon a confusing patchwork of individual clauses from scattered sections of the Act, sewn together without regard to the context, structure, purpose, or limitations of the Act, in order to “find” a statutory basis for the Commission’s preferred approach to regulating the Internet. As such, it fails to “bear[] in mind the ‘fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.’” UARG, 134 S. Ct. at 2441 (quoting Brown & Williamson, 529 U.S. at 133).
Accordingly, the court should vacate the Order
[1] See Remarks of FCC Chairman Tom Wheeler, Silicon Flatirons Center (Feb. 9, 2015) at 5, available at https://www.fcc.gov/document/chairman-wheeler-siliconflatirons-center-boulder-colorado.
[2] See, e.g., FCC Chairman William Kennard, A New Federal Communications Commission for the 21st Century, I-A (1999), available at http://transition.fcc.gov/Reports/fcc21.html. (“With the passage of the Telecommunications Act of 1996, Congress recognized that competition should be the organizing principle of our communications law and policy and should replace micromanagement and monopoly regulation.”).
[3] See id. (“[A]s competition develops across what had been distinct industries, we should level… regulation down to the least burdensome level necessary to protect the public interest. Our guiding principle should be to presume that new entrants and competitors should not be subjected to legacy regulation.”)