U.S. Telecom Ass'n v. Fed. Commc'ns Comm'n

• Citation: 855 F.3d 381 (Mem)
• Decision Date: 01 May 2017
• Docket Number: 15-1099,No. 15-1063,15-1086,15-1091,15-1090,15-1095,15-1164,15-1092,C/w 15-1078,15-1151,15-1128,15-1117,15-1063
• Parties: UNITED STATES TELECOM ASSOCIATION, Petitioner v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents Independent Telephone & Telecommunications Alliance, et al., Intervenors
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

855 F.3d 381 (Mem)

UNITED STATES TELECOM ASSOCIATION, Petitioner

v.FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents

Independent Telephone & Telecommunications Alliance, et al., Intervenors

No. 15-1063

C/w 15-1078

15-1086

15-1090

15-1091

15-1092

15-1095

15-1099

15-1117

15-1128

15-1151

15-1164

United States Court of Appeals, District of Columbia Circuit.

Filed: May 1, 2017

ORDER

Per Curiam

The petitions for rehearing en banc, the responses thereto, and the brief of amici curiae were circulated to the full court, and a vote was requested. Thereafter, a majority of the judges eligible to vote did not vote in favor of the petitions. Upon consideration of the foregoing, it is

ORDERED that the petitions be denied.

Srinivasan, Circuit Judge, joined by Tatel, Circuit Judge, concurring in the denial of rehearing en banc:

In this case, a panel of our court upheld the FCC's 2015 Open Internet Order, commonly known as the net neutrality rule. The parties who unsuccessfully challenged the Order before the panel have now filed petitions seeking review by the full court sitting en banc. The court today denies en banc review. En banc review would be particularly unwarranted at this point in light of the uncertainty surrounding the fate of the FCC's Order. The agency will soon consider adopting a Notice of Proposed Rulemaking that would replace the existing rule with a markedly different one. See In re Restoring Internet Freedom, FCC (Apr. 27, 2017), https://apps.fcc.gov/edocs_public/attachmatch/DOC-344614A1.pdf. In that light, the en banc court could find itself examining, and pronouncing on, the validity of a rule that the agency had already slated for replacement.

While we concur in the court's denial of en banc review, we write to respond to a particular contention pressed by one of our dissenting colleagues: that the FCC's Order, and thus our panel decision sustaining it, departs from controlling Supreme Court precedent in two distinct ways. First, our colleague submits that Supreme Court decisions require clear congressional authorization for rules like the net neutrality rule, and the requisite clear statutory authority, he argues, is absent here. See infra at 418–26 (Kavanaugh, J., dissenting); accord infra at 402–05 (Brown, J., dissenting). Second, our colleague contends that the rule conflicts with Supreme Court decisions ostensibly arming internet service providers (ISPs) with a First Amendment shield against net neutrality obligations. See infra at 426–35 (Kavanaugh, J., dissenting).

Respectfully, both lines of argument are misconceived. As to the first, the Supreme Court, far from precluding the FCC's Order due to any supposed failure of congressional authorization, has pointedly recognized the agency's authority under the governing statute to do precisely what the Order does. As to the second, no Supreme Court decision supports the counterintuitive notion that the First Amendment entitles an ISP to engage in the kind of conduct barred by the net neutrality rule—i.e., to hold itself out to potential customers as offering them an unfiltered pathway to any web content of their own choosing, but then, once they have subscribed, to turn around and limit their access to certain web content based on the ISP's own commercial preferences.

Before taking up the merits of those two issues, we first emphasize the role in which we examine them. The wisdom of the net neutrality rule was, and remains, a hotly debated matter. The FCC received the views of some four million commenters before adopting the rule, In re Protecting and Promoting the Open Internet, 30 FCC Rcd. 5601, 5604 ¶ 6 (2015) (Order ), and the debate over the rule continues to this day, with the agency now poised to consider replacing it. We have no involvement in that ongoing debate. Our task is not to assess the advisability of the rule as a matter of policy. It is instead to assess the permissibility of the rule as a matter of law. Does the rule lie within the agency's statutory authority? And is it consistent with the First Amendment? The answer to both questions, in our view, is yes.

I.

According to our dissenting colleague, the FCC's Order runs afoul of a doctrine he gleans from certain Supreme Court decisions invalidating an agency rule as lying outside the agency's congressionally delegated authority. Our colleague understands those decisions to give rise to a "major rules" doctrine. That doctrine is said to embody the following understanding about the scope of agencies' delegated authority: while agencies are generally assumed to possess authority under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), to issue rules resolving statutory ambiguities, an agency can issue a major rule—i.e., one of great economic and political significance—only if it has clear congressional authorization to do so. See infra at 418–19 (Kavanaugh, J., dissenting). Our other dissenting colleague generally agrees with this line of argument (although she calls the doctrine the "major questions" doctrine rather than the "major rules" doctrine). See infra at 402–03 (Brown, J., dissenting).

We have no need in this case to resolve the existence or precise contours of the major rules (or major questions) doctrine described by our colleagues. Assuming the existence of the doctrine as they have expounded it, and assuming further that the rule in this case qualifies as a major one so as to bring the doctrine into play, the question posed by the doctrine is whether the FCC has clear congressional authorization to issue the rule. The answer is yes. Indeed, we know Congress vested the agency with authority to impose obligations like the ones instituted by the Order because the Supreme Court has specifically told us so.

The pertinent decision is National Cable & Telecommunications Ass'n v. Brand X Internet Services , 545 U.S. 967, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). That case, like this one, addressed the proper regulatory classification under the Communications Act of broadband internet service. Brand X involved the provision of broadband internet access via cable systems. At the time of the decision, cable broadband was one of two types of broadband service available to customers, the other being DSL (digital subscriber line). See id. at 975, 125 S.Ct. 2688.

The FCC had applied a different form of regulatory treatment to cable broadband service than to DSL service. The agency had classified DSL as a "telecommunications service" for purposes of the Communications Act. See id. at 975, 1000, 125 S.Ct. 2688. That classification carries significant statutory consequences. The Act requires treating telecommunications providers as common carriers presumptively subject to the substantial regulatory obligations attending that status. See id. at 975-76, 125 S.Ct. 2688. Common carriers, for instance, generally must afford neutral, nondiscriminatory access to their services, and must avoid unjust and unreasonable practices in that connection. See id. at 975-76, 1000, 125 S.Ct. 2688.

Whereas the FCC had classified DSL broadband as a telecommunications service, the agency had instead elected to classify cable broadband as an "information service," the other of the two classifications available to the agency under the statute. See id. at 978, 125 S.Ct. 2688. Providers of an information service, in contrast with telecommunications providers, are not considered to be common carriers under the Act. As a result, providers of an information service are subject to less extensive regulatory obligations and oversight than are telecommunications providers. See id. at 975-76, 125 S.Ct. 2688.

The issue in Brand X was whether the Communications Act compelled the FCC to classify cable broadband ISPs as telecommunications providers subject to regulatory treatment as common carriers. The Court answered that question no. Critically for our purposes, though, the Court made clear in its decision—over and over—that the Act left the matter to the agency's discretion. In other words, the FCC could elect to treat broadband ISPs as common carriers (as it had done with DSL providers), but the agency did not have to do so.

The Court, to that end, explained that it had "no difficulty concluding that Chevron applie[d]" to the agency's decision to classify cable broadband as an information service rather than a telecommunications service. Id. at 982, 125 S.Ct. 2688. The statute's "silence" on the matter left the Commission "discretion to fill the consequent statutory gap." Id. at 997, 125 S.Ct. 2688. That meant the question "would be resolved, first and foremost, by the agency." Id. at 982, 125 S.Ct. 2688 (internal quotation marks omitted); see id. at 980-81, 125 S.Ct. 2688. The Court repeatedly emphasized the Commission's authority to use "its expert policy judgment to resolve these difficult questions." Id. at 1003, 125 S.Ct. 2688. In that light, the proper classification of broadband service would turn "on the factual particulars of how Internet technology works and how it is provided, questions Chevron leaves to the Commission to resolve in the first instance." Id. at 991, 125 S.Ct. 2688.

Consequently, the Court held, the court of appeals in Brand X had "erred in refusing to apply Chevron to the Commission's interpretation of the definition of ‘telecommunications service,’ " and in declining to defer to the agency's decision to treat cable broadband as an information service. Id. at 984, 125 S.Ct. 2688 (quoting 47 U.S.C. § 153(46) (2000) (currently codified at 47 U.S.C. § 153(53) )). But deference equally would have been owed, the Supreme Court made clear, if the FCC had reached the opposite resolution by classifying cable broadband providers as telecommunications carriers. That is because the agency had only two regulatory classifications available to it. To affirm the FCC's statutory discretion to select between them was necessarily to countenance the...