So They’re Voting On Network Neutrality, But What Happens Next?

On Thursday, February 26, the FCC will reclassify broadband under Title II of the Communications Act and adopt strong Network Neutrality rules. Then what?

It is doubtful that anyone reading this post doesn’t know that, barring an inch or two of snow (which is generally enough to shut down Washington, D.C.), on Thursday, February 26, the Federal Communications Commission will finally vote to reclassify broadband under Title II of the Communications Act and adopt strong Network Neutrality rules covering both wired and wireless Internet service providers (ISPs).

That vote will mark the end of a long debate, but it is only the start of what will be a multi-pronged fight over whether the FCC could, or should, have done what it is about to do. This is a necessarily oversimplified guide to what happens next.

The Meeting

The Commission will vote to adopt a decision which in draft form was said to be 332 pages in length. The FCC meeting itself, which can be viewed here, is something of a formality, in which Commission staff describes the decision (referred to as an “order”) and asks the Commission to adopt it. Commissioners will each read lengthy written statements explaining their support or opposition to the order, and the Commission will then go through the motions of voting. (The vote will be 3-2.)

It will be a day or two, perhaps more, before the full text of the order is actually released. But that doesn’t mean nothing else will happen.

If you keep watching the FCC’s live feed, immediately after the meeting there will be a press conference. This is usually far more interesting and informative than the meeting itself, as reporters grill the Chairman with skeptical questions. FCC Commissioner Ajit Pai, who has engaged in an unusually aggressive PR campaign against the new rules, may well hold his own press conference as well.

Shortly after the meeting, the Commission will issue a self-congratulatory press release and, probably, a fact sheet containing some details of the action. It will also release written versions of the five Commissioners’ statements, which sometimes have citations and footnotes.

Massive press coverage and analysis will ensue, even though the actual decision, with its critical details, will not as yet have been available.

Little Will Happen At the FCC

Once the actual text of the decision -- the actual rules -- is released, the lawyers will begin digesting it. However, at the FCC, nothing else will happen right away.

The next major event will be formal publication in the Federal Register. This typically takes 2 or 3 weeks after release of the text. From a technical standpoint, the decision isn’t “final” and, hence, reviewable, until that time.

In a complex matter such as this one, there are almost certainly some small mistakes or ambiguities. If they are simple typographical errors, the Commission will issue an Erratum correcting them.

If a stakeholder thinks that the FCC got something wrong, it may file a Petition for Reconsideration with the FCC within 30 days of Federal Register publication. In certain circumstances, likely not relevant here, a party MUST file a Petition for Reconsideration as a prerequisite to seeking judicial review, but if a party does file for reconsideration, it may not go to court until the Petition for Reconsideration is acted upon.

The FCC’s new rules ordinarily become effective 30 days after publication in the Federal Register, unless the FCC or a court grants a stay. Once the rules are in place, there may be complaints and various requests for clarification, but it is unlikely that much of that activity will occur until all the appeals are resolved.

There Will Be A Lot of Activity, But Not Much Will Be Accomplished, On Capitol Hill

Expect rhetoric, scrutiny, but little else from Congress.

Congress has already been deeply engaged on the Net Neutrality issue, and this activity will significantly escalate even before the Commission’s February 26 vote. However, there is little likelihood of actual legislation any time soon.

President Obama’s entry into the Net Neutrality debate has helped make Net Neutrality a highly partisan issue, as reflected by Senator Ted Cruz’ claim that it is “Obamacare for the Internet.”

Although cable, phone and wireless ISPs and many Republicans at one time opposed all Net Neutrality rules, they have, with various degrees of reluctance, retreated to advocating legislation that would block the Commission’s use of Title II of the Communications Act and instead allow a weaker form of Net Neutrality. When Congress convened in January, there was talk of bipartisan legislation which might be passed before the February 26 vote, but the draft produced by the Republican leadership was completely unacceptable to the Democrats. There is still brave talk of a compromise bill to be taken up after the FCC acts, but this, too, is very unlikely.

If there is any legislation at all, it would be a legislative veto of the FCC’s rules under the Congressional Review Act or an appropriations rider. I discussed these mechanisms in Congress and the FCC: An Uneasy Relationship. In any event, such action would be nullified by a Presidential veto.

While the prospects of legislation are uncertain at best, what is absolutely clear is that there will be intense legislative oversight. The House and Senate Commerce Committees have each held hearings on Net Neutrality and the House Oversight and Government Reform Committee scheduled another hearing for Wednesday, February 25. Three different committees have sent comprehensive demands for what will certainly be thousands of pages of FCC internal documents and communications with the Administration. The House Commerce Committee has also scheduled a hearing on the FCC’s budget for March 4. This intensive scrutiny is likely to continue for months.

Taking It To Court

By far the most significant forum for the Net Neutrality debate for the next year is the federal courts. The cable, telephone and wireless industries have made clear that they intend to sue, and that they are likely to seek a stay of the Net Neutrality rules.

The FCC order is headed to court; the question is ‘which one?’

Appeals of FCC decisions, which are technically called “Petitions for Review,” are brought in one of the 11 U.S. Circuit Courts of Appeal. A stakeholder can file in the circuit of its principal place of business or in the D.C. Circuit. Once the order is published in the Federal Register, parties have 60 days to file, but they will actually file within 10 days because they will want to try to determine which court will hear the case.

Because the D.C. Circuit has heard previous cases involving Net Neutrality, the ISPs may all want to bring the case there, but one or more of them may want to go to a different circuit. When Petitions for Review are filed in more than one circuit within 10 day of publication in the Federal Register, a special judicial body conducts a lottery to select the venue in which the case will be heard. (In the unlikely event that no one files within 10 days, the first petition filed will determine the location of the case.)

If, as several ISPs have said, they intend to seek a stay, they must first go through the formality of requesting a stay from the FCC, which will be immediately denied. They may then ask the Court of Appeals for a stay. The party that prevails in the stay proceeding, either the FCC or the ISPs, will be at a significant advantage in the ensuing litigation. However, since the burden a petitioner faces in seeking a stay is quite high, requesting a stay is a high risk strategy. In essence, the two factors that matter in a stay motion are likelihood of ultimate success and immediate, irreparable harm. These factors are interdependent; the greater the degree of harm, the less one must show likelihood of success, and vice versa.

While the Court of Appeals can, in theory, hold a hearing on a stay motion, this is extremely rare. Ordinarily, stay motions are decided based on paper filings. The court is likely to resolve any stay motions within a few weeks.

Whether or not a stay is granted, briefs will be filed a few months after the court case is initiated. The court will hold oral argument on the case; this is not like a trial in that there is no testimony or evidence presented. Argument will likely be held in the fall of this year, and a decision would likely be issued next winter.

What Are The Legal Arguments?

Until the FCC’s decision is issued, one can only speculate on exactly what arguments will be made on appeal. However, the basic framework of the appeals is quite clear.

Since the FCC has previously held that both cable and DSL broadband are “information services” governed by Title I of the Communications Act, the FCC must revise its prior interpretations and declare that these are actually “telecommunications services” subject to the provisions of Title II of the Communications Act. To make such a “reclassification,” the Commission must recognize that it has made a change and give a reasoned explanation for the change. Normally, agencies receive considerable deference from reviewing courts, but if the explanation is deemed inadequate (or, in the words of the law, “arbitrary and capricious”), the court will reverse the decision.

There are surely going to be many specific arguments advanced as to why the FCC should not reclassify, but three of the most important points of dispute will be the following:

  • First, ISP’s will argue that the FCC was correct when it previously considered Internet service as an integrated offering including a number of elements, such as email and domain lookup which are not “telecommunications service.” They will dispute the FCC’s effort to revise that holding to declare that Internet service is made of multiple elements.
  • Second, because the FCC intends to expand Net Neutrality rules to include wireless (something it did not do in its prior effort to adopt rules), the wireless industry will argue that the Communications Act permits the FCC to regulate voice service under Title II (as it has always done), but prohibits the FCC from regulating data services under Title II.
  • Third, there will likely also be considerable dispute over the FCC’s efforts to forbear from applying certain provisions of the Communications Act to broadband. You can read about the forbearance process in What Is All This Talk About 'Forbearance?'

While it is quite likely that whichever side loses the Net Neutrality case will ask the Supreme Court to hear the matter, it is by no means certain that the Court will agree to do so. While the case is surely one of great importance to the country, from the standpoint of the Supreme Court, it may well be seen as a garden variety case of statutory construction. Moreover, depending on what the appeals court says, there may well be no conflict with other circuits, and the Supreme Court rarely takes the case in the absence of such a split.

“First Amendment” or “Obamacare”?

This is a highly divisive and partisan issue in a highly divisive and partisan age. Senator Al Franken has said that Net Neutrality is “the First Amendment issue of our time.” Senator Ted Cruz believes that Net Neutrality is “Obamacare for the Internet.” As this rhetoric suggests, the FCC’s vote will mark an important milestone, but is also the beginning of a new stage in an ongoing national debate.

By Andrew Jay Schwartzman.