Mozilla Corp. v. Fed. Commc'ns Comm'n
| Citation | 940 F.3d 1 |
| Decision Date | 01 October 2019 |
| Docket Number | 18-1105, 18-1055, 18-1066, 18-1088, C/w 18-1052, 18-1054, 18-1061, 18-1089, 18-1062, 18-1065, 18-1056,No. 18-1051, 18-1068, 18-1053, 18-1064, 18-1067,18-1051 |
| Parties | MOZILLA CORPORATION, Petitioner v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents City and County of San Francisco, et al., Intervenors |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
1. "Walled Garden" Reading of...23
2. "Telecommunications Management" Exception...23
1. Meaning of "Public Switched Network"...37
2. Whether Mobile Broadband Is an "Interconnected Service"...39
3. Whether Mobile Broadband Is the "Functional Equivalent" of a Commercial Mobile Service...43
1. Reliance on the Transparency Rule...56
2. Reliance on Competition...57
3. Reliance on Antitrust and Consumer Protection Laws...58
1. Impossibility Exception...76
2. Federal Policy of Nonregulation...78
3. Case Precedent...80
In 2018, the Federal Communications Commission adopted an order classifying broadband Internet access service as an information service under Title I of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, Pub. L. 104–104, 110 Stat 56 ("the Act"). See In re Restoring Internet Freedom , 33 FCC Rcd. 311 (2018) (" 2018 Order "). In so doing, the agency pursued a market-based, "light-touch" policy for governing the Internet and departed from its 2015 order that had imposed utility-style regulation under Title II of the Act.
Petitioners––an array of Internet companies, non-profits, state and local governments, and other entities––bring a host of challenges to the 2018 Order. We find their objections unconvincing for the most part, though we vacate one portion of the 2018 Order and remand for further proceedings on three discrete points.
The 2018 Order and today's litigation represent yet another iteration of a long-running debate regarding the regulation of the Internet. We rehearsed much of this complex history in United States Telecom Association v. FCC , 825 F.3d 674, 689–697 (D.C. Cir. 2016) (" USTA"), and see no need to recapitulate here what was so well and thoroughly said there. In the interest of reader-friendliness, though, we briefly review certain highlights necessary to understand this opinion.
As relevant here, the 1996 Telecommunications Act creates two potential classifications for broadband Internet: "telecommunications services" under Title II of the Act and "information services" under Title I. These similar-sounding terms carry considerable significance: Title II entails common carrier status, see 47 U.S.C. § 153(51) (defining "telecommunications carrier"), and triggers an array of statutory restrictions and requirements (subject to forbearance at the Commission's election). For example, Title II "declar[es] * * * unlawful" "any * * * charge, practice, classification or regulation that is unjust or unreasonable." Id. § 201(b). By contrast, "information services" are exempted from common carriage status and, hence, Title II regulation.
An analogous set of classifications applies to mobile broadband: A "commercial mobile service" is subject to common carrier status, see 47 U.S.C. § 332(c)(1), whereas a "private mobile service" is not, see id. § 332(c)(2).
The Commission's authority under the Act includes classifying various services into the appropriate statutory categories. See National Cable & Telecomms. Ass'n v. Brand X Internet Servs. , 545 U.S. 967, 980–981, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). In the years since the Act's passage, the Commission has exercised its classification authority with some frequency.
Initially, in 1998, the Commission classified broadband over phone lines as a "telecommunications service." See In re Deployment of Wireline Services Offering Advanced Telecommunications Capability , 13 FCC Rcd. 24012 (1998).
Just four years later, though, the Commission determined that cable broadband was an "information service," see In re Inquiry Concerning High-Speed Access to the Internet over Cable and Other Facilities ("Cable Modem Order "), 17 FCC Rcd. 4798 (2002), a choice that the Supreme Court upheld in Brand X , 545 U.S. 967, 125 S.Ct. 2688, 162 L.Ed.2d 820. The agency then applied a similar classification to wireline and wireless broadband. See In re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities , 20 FCC Rcd. 14853 (2005) (" 2005 Wireline Broadband Order "); In re Appropriate Regulatory Treatment for Broadband Access to the Internet over Wireless Networks , 22 FCC Rcd. 5901 (2007) (" Wireless Broadband Order ").
But in 2015 the Commission took the view that broadband Internet access is, in fact, a "telecommunications service" and that mobile broadband is a "commercial mobile service." See In re Protecting and Promoting the Open Internet , 30 FCC Rcd. 5601 (2015) (" Title II Order "). In USTA, this court upheld that classification as reflecting a reasonable interpretation of the statute under Chevron 's second step. See 825 F.3d at 701–706, 713–724 ; see also Chevron, U.S.A., Inc. v. Natural Res. Def. Council , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
Once again, the Commission has switched its tack. In 2017, the Commission issued a notice of proposed rulemaking seeking to revert to its pre-2015 position, In re Restoring Internet Freedom , 32 FCC Rcd. 4434 (2017), and released the final order at issue in this case in January 2018.
The 2018 Order accomplishes a number of objectives. First, and most importantly, it classifies broadband Internet as an "information service," see 2018 Order ¶¶ 26–64, and mobile broadband as a "private mobile service," see id. ¶¶ 65–85. Second, relying on Section 257 of the Act (located in Title II but written so as to apply to Titles I through VI), the Commission adopts transparency rules intended to ensure that consumers have adequate data about Internet Service Providers' network practices. See id. ¶¶ 209–38. Third, the Commission undertakes a cost-benefit analysis, concluding that the benefits of a market-based, "light-touch" regime for Internet governance outweigh those of common carrier regulation under Title II, see id. ¶¶ 304–323, resting heavily on the combination of the transparency requirements imposed by the Commission under Section 257 with enforcement of existing antitrust and consumer protection laws, see id. ¶¶ 140–154. The Commission likewise finds that the burdens of the Title II Order's conduct rules exceed their benefits. See id. ¶¶ 246–266.
We uphold the 2018 Order, with two exceptions. First, the Court concludes that the Commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the Commission "repealed or decided to refrain from imposing" in the Order or that is "more stringent" than the Order. 2018 Order ¶ 195. The Court accordingly vacates that portion of the Order. Second, we remand the Order to the agency on three discrete issues: (1) The Order failed to examine the implications of its decisions for public safety; (2) the Order does not sufficiently explain what reclassification will mean for regulation of pole attachments; and (3) the agency did not adequately address Petitioners' concerns about the effects of broadband reclassification on the Lifeline Program.
The central issue before us is whether the Commission lawfully applied the statute in classifying broadband Internet access service as an "information service." We approach the issue through the lens of the Supreme Court's decision in Brand X , which upheld the Commission's 2002 refusal to classify cable broadband as a "telecommunications service." 545 U.S. at 974, 125 S.Ct. 2688. The Commission's classification of cable modem as an "information service" was not challenged in Brand X , see id . at 987, 125 S.Ct. 2688, but, given that "telecommunications service" and "information service" have been treated as mutually exclusive by the Commission since the late 1990s, see, e.g. , 2018 Order ¶¶ 53, 62 & n.239; Title II Order ¶ 385, a premise Petitioners do not challenge, see Mozilla Br. 24, we view Brand X as binding precedent in this case.
We start, of course, with the statutory definition. Section 47 U.S.C. § 153(24) reads:
The term "information service" means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications * * * but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.
The final clause is known as the "telecommunications management" exception. The Act defines "telecommunications service" , as follows:
The term "telecommunications service" means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be...
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