Implications of DC Circuit Hearing Net Neutrality Appeal

October 6, 2011

Since the D.C. Circuit Court of Appeals was selected to hear appeals of the FCC’s Open Internet Order — it is now even more likely that the FCC’s net neutrality regulations will be overturned in court as unlawful and/or unconstitutional.

  • Regardless of which Appeals Court heard this case, Verizon was highly likely to win in its appeal against the FCC rules on the merits.
  • Now Verizon’s chances increase further given that the most knowledgeable, expert, and experienced Circuit Court of Appeals is hearing this case.
    • (See analysis here for why the FCC is highly likely to lose this case.)

The D.C. Circuit is the Appeals Court that traditionally hears cases involving independent regulatory agencies like the FCC, so the D.C. Circuit Judges are very familiar with both the limits of the FCC’s statutory authority and the FCC’s proven penchant for trying to overreach their statutory authority.

In a nutshell, the FCC’s legal case stands on two very slippery assumptions.

  • First that the Appeals Court will somehow grant the FCC broad “Chevron Deference” in this case under the Supreme Court precedent that when the statutory authority is unclear, courts should defer to the expert regulatory agency, in this case the FCC.
    • The problem is that a three Judge panel of this Circuit has already ruled in 2009, in Comcast vs. FCC, that the FCC does not have the statutory authority to regulate broadband or the Internet.
    • The FCC tacitly fortified that critical precedent by acquiescing to that decision by not appealing it to the Supreme Court.
  • Second, the FCC is largely relying on its 1996 Telecom Act Section 706 deregulatory authority to try and justify new sweeping unbounded authority over broadband and the Internet when another part of that same law said: “It is the policy of the United States… to preserve the vibrant and competitive free market that presently exists for the Internet… unfettered by Federal or State regulation.”
    • Given this courts long experience with the 1996 Telecom Act and the FCC’s boundless regulatory ambitions, it is highly unlikely this court will allow the FCC to transmogrify an obviously de-regulatory statutory provision of law into the basis for the biggest regulatory authority land grab in the FCC’s history.

In sum, not only are the FCC’s net neutrality regulations a bad idea, based on bad legal analysis, and non-existently bad competition and cost-benefit analyses, but net neutrality proponents also continue to have very bad string of luck in losing 0-95 in the 2010 midterm elections on net neutrality and today losing 0-5 in the Court lottery in their attempt to forum shop by filing and losing in five different attempts to get the case heard anywhere but the DC Circuit Court of Appeals.

 

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