A Quick Guide For The Upcoming Net Neutrality Rules Challenge

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Hey everyone, remember back at the end of last year when the Federal Communications Commission (FCC) adopted the better-than-nothing-but-still-painfully-disappointing Network Neutrality rules? Well, after a long and winding road, which included bouncing back and forth between the FCC and the Office of Management and Budget a few times and a premature challenge by Verizon, the rules were finally published in the Federal Register today. So without getting into the merits, here is what to expect procedurally.

Congressional Review Act

Publication in the Federal Register (or, as we policy wonks like to say, "Fed Reg") starts two important clocks running. On the legislative side, it starts the clock running for the Senate to take up the "Resolution of Disapproval" passed by the House awhile back under the Congressional Review Act. My colleague Ernesto Falcon wrote about that process over here back in February when the House voted out its Resolution of Disapproval. so we will expect to see action on this in the Senate, assuming they want to take time off from keeping the Federal Government from shutting down or dealing with the Jobs bill, the deficit, etc.

Court Challenges

Of greater urgency at the moment, however, publication in Fed Reg kicks off the timing for legal challenges. Because where the case gets heard can pretty much determine the outcome, folks who don't want any rule will file in the D.C. Circuit. Those who want the FCC to make rules but who think these rules are too wussy will file in other circuits. Under the rules for sorting out circuit conflicts, any Petitions for Review challenging an agency order filed within 10 days of when the order is final (which in this case is today). So everyone who wants to get their choice of circuit needs to file a Petition challenging the order by 10 days from now. That would normally fall on Saturday October 1, so the filing window actually closes on Monday October 3.

Assuming petitions are filed in more than one circuit, the Federal Rules require that the courts resolve the conflict by lottery. So we should know in two weeks which court will hear the case. Sorta.

Possible Procedural Pregame Show

Verizon DC Circuit Argument. Back in January, when Verizon filed its challenge, it argued that the network neutrality rules was a "license modification" and therefore, under the relevant statute (47 U.S.C. 402(b)(5)), the D.C. Circuit has exclusive jurisdiction over the case (and, by extension, over every rulemaking that imposes rules on wireless carriers). The FCC opted to oppose Verizon's Petition on the grounds that whichever provision of the statute applied, Verizon had filed too early because the Order was not final until published in Fed Reg. The D.C. Circuit agreed with the FCC on the timing question, so it never reached the merits of the Verizon's theory that the DC Circuit has exclusive jurisdiction over the net neutrality rules (at least as applied to wireless).

If someone else wins the lottery and the challenge ends up in a circuit considered more favorable to the FCC, Verizon will probably file a motion to transfer the case to the D.C. Circuit  on the exclusive jurisdiction grounds. VZ will probably also argue that the case is "related" to the Comcast BitTorrent case and ought to be sent to the D.C. Circuit for that reason as well -- although the D.C. Circuit appeared to reject that argument when the panel which heard the Comcast case denied Verizon's motion to treat it as a related case.

Personally, I think Verizon's exclusive jurisdiction argument is foreclosed by Committee for Effective Cellular Rules v. FCC, 53 F.3d 1309 (DC Cir 1995), where the court held that a rulemaking that alters the terms of the entire class of cellular licensees is a rulemaking and not a license modification. But regardless of the merits, Verizon is likely to renew its argument that the D.C. Circuit has exclusive jurisdiction and resolving that may take a bit depending on the court.

Stay Request?

There has been speculation that Verizon, or another challenger, may request a stay of the rules. The conventional wisdom is "why the heck not?" But a stay request is not without risks. If Verizon loses the stay request, that is likely to be seen as a sign that Verizon will lose on the merits. In addition, it is usual (although not required) that a party seeking a stay asks the agency to stay its own rules before asking the reviewing court for a stay. Verizon (and other challengers) have now had 9 months to file a request for a stay at the FCC and haven't. It would be a little difficult to argue that they had to wait until the rules became effective to ask the agency for a stay. 

Nevertheless, it is still out there as a possibility. If it happens, resolve the stay motion will also take some time, depending on the court.

Bottom line?

Look for procedural fun over the next couple of weeks. By the end of October at the latest, the smoke should have cleared and we'll be able to predict a briefing schedule.

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