It’s nice to have a level-headed debate on the legal arguments at play in the FCC’s upcoming reclassification of broadband ISPs, an issue that often generates more heat than light. And for what it’s worth, I think Gus Hurwitz and I agree on a lot. In particular, I agree with him that a skeptical court may be inclined to see the Commission’s action as an example of agency overreach in a sensitive and important area. I also agree that that fact may color any number of the legal issues, which is one reason why I think it’s difficult to predict the outcome of the appeal.
I did, however, want to respond briefly to the invocation of Utility Air Regulatory Group, which I’ve also noticed cropping up elsewhere. It’s true that UARG turned on the fact that EPA’s determination that greenhouse gases count as “air pollutants” for purposes of the programs at issue triggered dire statutory consequences, consequences that the agency felt it needed to blunt through its “tailoring rule.” So far, this does sound a lot like what the FCC is proposing to do.
In my mind, the critical difference is that, in the Court’s view, the EPA’s “tailoring rule” was itself illegal (i.e., without statutory basis). That the EPA had to resort to such illegal means “should have alerted EPA that it had taken a wrong interpretive turn.” Here, however, the FCC has an explicit statutory basis for “tailoring” that the EPA lacked. As I mentioned in my first post, 47 U.S.C. § 160 expressly allows the Commission to exempt “classes” of carriers from any or all of the requirements of the Communications Act. Interestingly, Congress added that provision in 1996 specifically in order to overturn the result in MCI v. AT&T, another Chevron “major questions” case, which had stymied the FCC’s decades-long effort to relieve competitive long-distance carriers like MCI of the Act’s tariffing obligations. The consequence of the Act’s forbearance provision is that the Commission does not need to apply Title II on an all-or-nothing basis.
Indeed, in his Brand X dissent, Justice Scalia – the author of UARG – recognized that the FCC has this power. As readers may recall, Justice Scalia would have held that the Communications Act not only allows but requires the FCC to treat broadband ISPs as telecommunications carriers. And in setting forth that position, Scalia pointed specifically to the Act’s forbearance provision as a statutory safety valve for dealing with the resulting consequences.
In sum, it’s not at all clear to me that, if the EPA had a solid statutory basis for its tailoring rule, UARG would have come out the same way. And for that reason, the fact that the FCC does have such a basis for forbearance makes me wonder whether the analogy really holds.