The FCC’s Title II Reclassification: The Lawsuits Are Here!

by Daniel Deacon — Thursday, Apr. 23, 2015

Now that the FCC’s Open Internet/Title II Reclassification Order has finally arrived (along with the inevitable lawsuits), I thought I would do a brief addendum to my prior post on the various legal challenges confronting the FCC’s plan. (For Gus Hurwitz’s response to that post, and my reply, see here and here.)

One thing my prior post did not anticipate was the extent to which the challengers to the FCC’s reclassification proposal might rely on a procedural argument—namely, that the Commission did not adequately provide notice of its intent to reclassify ISPs as telecommunications carriers in the FCC’s May 2014 Notice of Proposed Rulemaking. Indeed, Commissioner Pai’s dissent to the Final Order—large parts of which read as a road-map for potential litigants—places that issue front and center.

The relevant facts are as follows: The May 2014 NPRM proposed a net neutrality regime rooted in section 706 of the Telecommunications Act of 1996. The bulk of the NPRM was focused on collecting comments on that proposal, and not one grounded in Title II of the Communications Act. But the Final Order reversed course, reclassifying ISPs under Title II and subjecting them to a host of requirements based on that authority. That the Commission ultimately proceeded under Title II and not section 706 is important, as the FCC has much greater ability under Title II to adopt a strong, rule-like net neutrality regime than it had under the prevailing judicial interpretation of section 706.

As a broad-based attack on reclassification, the challengers’ notice argument strikes me as somewhat weak. The issue will turn on whether the Final Order was a “logical outgrowth” of the NPRM, which depends on whether interested parties “should have anticipated” that the Title II route was possible from the NPRM. As the D.C. Circuit has explained, the test prevents agencies from pulling “a surprise switcheroo on regulated entities.”

The problem for the challengers is that the NPRM, although formally proposing to rely on section 706, specifically asked for comment on whether it should proceed under Title II instead. Regulated entities certainly recognized that the Commission was considering reclassification. Just to take a few, comments filed by companies like AT&T, Comcast, and Verizon dealt extensively with whether the Commission should proceed under Title II. So did comments filed by public interest organizations and members of the public at large, many of who filed via text message calling for the Commission to reclassify. Given that, it seems difficult to argue that the issue of reclassification as such was not properly noticed.

That said, many of the specific details associated with reclassification are much harder to discern in the NPRM. To somewhat understate things, the Commission’s decision to reclassify involved a large number of moving parts. For example, in order to bring mobile broadband within the scope of the reclassification, the Commission had to (for reasons I won’t bore you with) revise its regulatory definition of “Public Switched Network.” Some of these kinds of details were discernable in the May NPRM. Others, less so.

The notice argument may therefore turn on how closely a reviewing court wants to parse things. And if the court ends up deciding that the ultimate decision to reclassify was sufficiently noticed but that some of the details of the Final Order were not, that could in turn raise difficult remedial issues. Most importantly, will the court allow reclassification to stand while remanding to the FCC to take another round of comments on certain details? We are now getting way ahead of ourselves, though. After all, it’s still unclear what court will even hear the challenge. For that, stay tuned.

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About Daniel Deacon

Dan Deacon’s primary interests are in administrative law and telecommunications and Internet regulation. His work has appeared in the Yale Law Journal, the Administrative Law Review, the Virginia Law Review, and the NYU Law Review. Topics he has written about include executive enforcement discretion, processes for deregulation, and the changing face of communications regulation in the United States.

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