What The Court Will Decide On Network Neutrality—Officially


Before next week's oral argument on the FCC’s Open Internet rules we discuss why the FCC has the Authority to Make Network Neutrality Rules and what could get in the way.

On Tuesday, Michael Weinberg wrote about why we at PK think network neutrality is important, and Sherwin Siy explained the actual net neutrality rules the Federal Communications Commission (FCC) adopted. None of this, however, will get debated in the courtroom on Monday September 9 when the oral argument finally happens – at least not officially.

In theory, the reviewing court will focus on two things. Did the FCC have the authority to make the net neutrality rules? And, even if the FCC does have the authority, does something else prohibit the FCC from exercising that authority here?

I say in theory because judges have their own opinions and the D.C. Circuit is particularly famous for its high level of judicial activism. But judges can’t come out and say “well, even though the FCC has authority to do this, we think it’s a bad rule so too damn bad!” That wins you a quick trip to the Supreme Court, which just last term reminded lower courts they are supposed to respect the FCC’s authority and defer to its expert judgment. So while policy arguments may lurk in the background, here’s what everyone will actually be talking about in the courtroom.

Why Does The FCC Have The Authority To Make Network Neutrality Rules?

Administrative agencies get their authority from Congress. That can be a very specific and narrow instruction (e.g. ‘keep people from sending junk faxes’) or a very broad general instruction (e.g., ‘make sure all broadcasters ‘serve the public interest’).

Congress doesn’t have to explicitly say “go come up with network neutrality rules” for the FCC to have authority. At the same time, however, the FCC can’t just make something up. There has to be something in the Communications Act that the FCC can point to and say “here is why we have authority to make these rules.”  This authority principle prevents the FCC from regulating carbon emissions from power plants or the EPA deciding who gets to own a TV station.

In the case of the net neutrality rules, the FCC is relying on a broad instruction from Congress to promote broadband deployment and adoption (called the “Section 706 argument” for the Section of the Telecommunications Act of 1996 that added this law to the Communications Act”). In addition, the FCC has also pointed to several specific statutory responsibilities (like, ‘make sure telephone service is affordable,’ ‘make sure video services are competitive,’ ‘make sure wireless carriers serve the public interest’), arguing that it cannot do these things effectively without a network neutrality rule.  In bringing its case against the FCC, Verizon is arguing that none of these instructions mean that Congress intended it to create net neutrality rules.

Does Something Else Stop The FCC From Having Network Neutrality Rules?

In addition to arguing the FCC didn’t have the authority in the first place, Verizon has also argued that the net neutrality rules violate their First Amendment rights. Verizon has also argued that other provisions of the Communications Act prohibit the FCC from applying the network neutrality rules. Finally, Verizon argues that the FCC did such a bad job explaining its reasoning that the rules are “arbitrary and capricious and otherwise not supported by the record.”

The First Amendment Argument

Verizon argues that it has a First Amendment right to block whatever it wants. Verizon argues that, like a newspaper, it provides you with news but has a right to cover whatever it wants and say whatever it wants. Alternatively, it’s at least like a cable system. Just like Verizon FIOS decides whether or not to carry Al Jazeera America, and on what terms, Verizon argues it has the right to decide whether or not to go to AlJazeera.com, and on what terms.

John Bergmayer has a more detailed explanation of the counterargument here. The short version is there is a difference between the business of delivering someone else’s speech and actually speaking. It does not violate the First Amendment to say that UPS has to carry everyone’s packages – including magazines it doesn’t like.

Other Statutes That Prevent the FCC From Having Network Neutrality Rules

Verizon has pointed to two statutes that say the FCC cannot regulate certain things ‘as a common carrier,’ meaning as a phone network (except to the extent they act like a phone network). Again, John has a more detailed look at this argument in this blog post. Basically, the FCC will argue that this limitation doesn’t apply here. 

Arbitrary and Capricious

Finally, whenever an agency makes a rule, it has an obligation to explain its reasoning and point to evidence in the record that justifies the decision. Verizon will argue that even if the FCC has the authority it claims, it did not do a good enough job justifying the network neutrality rule. 

This would be the place you would expect all the arguments people make about whether the rule is a good idea or not to come up. But the legal standard for proving a rule is “arbitrary and capricious” is supposed to be very high. It’s not about whether the judges think the rules is a good idea or not. If there is any evidence to support the FCC’s decision, and if the rule even vaguely addresses the problem the FCC wants to solve, the court is supposed to uphold the FCC.   

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