Expect Court to Partially Stay FCC’s Title II Internet Reclassification

Published May 5, 2015

In the coming weeks, expect the D.C. Court of Appeals or the Supreme Court to grant a partialstay, of only the FCC’s Title II reclassification of broadband and its new “Internet conduct standard” (not the FCC’s net neutrality prohibitions of blocking, throttling or paid prioritization), even though stay requests normally have a low probability of success, because petitioners must convince the court that they are likely to win on the merits and that the opposed action will cause irreparable harm.

Close review of the FCC Order and the stay petitions (telecom & cable) exposes that this is not a normal case with normal long odds. This particular petition for a partial stay has a more likely than not chance of being granted.

Consequently, the likelihood of a bipartisan Congressional resolution of the net neutrality issue could increase going forward as Congressional Democrat staff and key Membersactually read the petitions for a Title II stay, because those who do will have a hard time ignoring the extraordinary systemic legal vulnerability of the FCC’s Title II reclassification, and what a partial stay could mean for the FCC and its plans going forward.

Congressional Democrats entire communications legislation strategy and presumed negotiating leverage hangs on the increasingly questionable presumption of the legal sustainability of the FCC’s Title II reclassification. They face an all-eggs-in-one-basket problem, when the basket is poised for a big potential fall.

Summary of this Analysis

  • Where are we in the appeal process?
  • What is my argument in a nutshell?
  • How does the tailored partial stay optimize chances for a stay?
  • Why do petitioners only need to win one of their seven strong arguments on the merits?
  • Why does context prove this to not be a “normal” petition for a stay?
  • How does the “partial” stay request minimize irreparable harm by design?

Where are we in the appeal process?

The FCC published its Order in the Federal Register April 13. It will go into effect June 12, 2015 unless stayed by the FCC or court.

April 30th the FCC petitioned the D.C. Circuit Court of Appeals to hear this case’s appeals. On May 1, the broadband industry filed two petitions for a stay with the FCC and the D.C. Circuit,one  from telecom associations and another from cable associations. Both requested the FCC act on the stay request before May 8.

Given that the FCC believes its Order is lawful and wants to implement it June 12, it is highly unlikely the FCC will stay its own action. That then effectively puts these stay requests before the D.C. Circuit around May 9.

(Background Note:  I have previously analyzed and deconstructed the FCC’s legal case in substantial detail before and after the publication of the FCC’s Open Order, exposing the FCC’s Title II decision to be extraordinarily flawed legally.)

This is my argument in a nutshell: why it’s more likely than not there will be a partial stay.

First, these broadband provider requests for a partial stay are highly-targeted exactly and only where the petitioners’ arguments are strongest and the FCC’s defenses are weakest and most vulnerable.

Second, broadband providers only need one successful argument on the merits to win a partial stay, yet they enjoy a phalanx of seven free-standing, strong arguments, each of which is sufficient to win a partial stay, and collectively, are quite formidable and mutually-reinforcing.

Third, context proves this to not be a “normal” petition for a stay, because the D.C. Circuit has already overturned the FCC twice on the matter of asserting more Internet authority than the law provides, and this latest assertion of FCC Internet authority dwarfs the FCC’s previous overreaches.

Fourth, a partial stay would maintain the status quo. It would not harm consumers, innovation or the public interest, because the partial stay would only stay prophylactic rules. There are multiple real and immediate harms to broadband providers which would be subject to immediate, substantial, broad and ill-defined new obligations and liabilities. The harms case is supported by over twenty affidavits of multiple claims of similar irreparable harms from a wide array of companies of different sizes and approaches.

Simply, the overall case for a partial stay is serially formidable precisely because the FCC’s Order’s is so serially and fatally flawed legally – in asserting largely unchecked power to disregard, facts, precedents, the law, the APA/due process, and the Constitution. In a word, the FCC’s argument is frail.

The partial stay requests are strategically targeted to optimize the chances for a granted stay.

The broadband provider petitions are NOT asking for a stay of the FCC’s bright line net neutrality rules that ban blocking, throttling or paid prioritization, that the FCC says are needed to protect consumers. Thus the petitions are not challenging the FCC’s net neutrality policy or the FCC’s existing Section 706 authority to protect net neutrality, consumers, broadband deployment and innovation.

They are only challenging the FCC’s newly asserted Title II reclassification of the Internet authority and the FCC’s new and vague “Internet conduct standard” that are imposed to prevent future potential problems.

They also are NOT challenging the D.C. Court of Appeals precedent and guidance in Verizon v. FCC that provided the FCC a roadmap to legally implement net neutrality bans on blocking, throttling or paid prioritization under Section 706.

Thus these requests for a partial stay respect consumer protection, the FCC, the court, and the status quo, and only challenge the FCC’s unnecessary and illegal assertion of Internet regulatory authority it does not have.

Simply the petitioners are only requesting a stay of the part of the FCC Order that the FCC itself indicates is not urgent or necessary at this time.

Petitioners need only win one of their seven strong arguments on the merits for a partial stay.

The petitioners provide substantial compelling evidence and precedent to prove the FCC’s Title II reclassification unlawful in at least seven different ways legally by:

  1. Conflicting with the plain language of the Communications Act;
  2. Conflicting with the Supreme Court’s Brand X precedent;
  3. Conflicting with the D.C. Circuit Court of Appeals Verizon v. FCC precedent;
  4. Conflicting with multiple cumulative FCC information services precedents over decades;
  5. Conflicting with the CMRS mobile provisions of the Communications Act and FCC precedent;
  6. Being arbitrary and capricious in violation of the APA and due process; and
  7. Failing to provide APA notice of the fundamental approach and rationale of the reclassification.

In addition, the two industry petitions of the telecom associations and the cable associations are each very compelling alone, but together they are much more formidable because combining their very different legal and regulatory origins and perspectives, creates a even more compelling and holistic sector view of the cumulative irreparable harms at work here.

Context proves this to not be a “normal” petition for a stay.

The FCC has lost twice in the D.C. Circuit in asserting unbounded Internet authority that it did not have in Comcast v. FCC in 2010 and again in Verizon v. FCC in 2014. In Verizon v. FCC the D.C. Circuit provided a legally-bounded roadmap to the FCC on how to legally achieve its net neutrality goals under Section 706 that the FCC then obviously chose not to follow.

The D.C. Circuit also is expertly familiar with Title II “telecommunications” common carrier regulation authority and the longstanding distinctions and mutual-exclusivity of the legal terms “telecommunications” and “information services.”

In overturning the FCC in 2014, the D.C. Circuit clearly appreciated how onerous common carrier regulation can be and how it must be reasonably applied within the law and established precedent.

In addition, the D.C. Circuit will have an appreciation of the sweeping costs, obligations and liabilities in applying Title II common carrier law to new entities not subject to it before.

The petitioners specifically-tailored, partial stay request minimizes irreparable harm by design.

The petitioners do not seek to stay any existing net neutrality or Section 706 consumer protections.

The only parts of the order the petitioners seek to stay are the new additional authority the FCC is asserting, Title II reclassification of broadband and the new “Internet conduct standard.”

The petitioners are only asking that the hugely-consequential change — the FCC radically changing the legal status of the Internet from a lightly-regulated information service to a utility-regulated telecommunications service without Congress or judicial review — should not go into effect until the court determines if it is lawful or not.

They make a very reasonable and compelling point that allowing a potentially “twice convulsive” outcome, where broadband providers could have to adapt to a complete reversal of their legal status once June 12 without a stay and then potentially again if a court ultimately overturned the FCC later on legal grounds.

The petitioners also catalogue a long litany of irreparable harms from which they and others would suffer, given the hundreds of billions of dollars of reliance interests involved and the well established business and consumer certainty of the Internet being an unregulated information service.

[Originally published at Precursor Blog]