FCC's Final Net Neutrality Rule Spurs Challenges

Appellate challenges to the Federal Communications Commission's (FCC) open Internet regulations are piling up days after the agency's release of its final rule on the matter.

The FCC's publication on Sept. 23 of a final rule in the Federal Register opened the floodgates for court challenges. See, Preserving the Open Internet; Final Rule, 76 Federal Reg. 59,192 (Sept. 23, 2011) (http://bit.ly/qqLGoC).

The hotly contested rule on open Internet, also referred to as “net neutrality,” details standards for Internet-access providers' management of information in their networks.

A media advocacy group called Free Press filed a petition with the U.S. Court of Appeals for the First Circuit on Sept. 28. (The petition can be found at http://pdfserver.amlaw.com/nlj/1stCirFreePressvPetition.pdf.)

Non-profit law firm and advocacy organization Media Access Project also recently filed three petitions on behalf of various clients in the federal appellate courts in the Second, Fourth and Ninth Circuits. (The petitions can be found, respectively, at http://bit.ly/nmaYrZ, http://bit.ly/nco1UJ, and http://bit.ly/qZNQVp.)

The final rule, which kicks in Nov. 20, generally requires fixed and mobile broadband providers to disclose their network management practices, performance
characteristics and service terms. They're also barred from blocking legal content, services and devices and from unreasonably discriminating when transmitting network traffic.

The appeals will eventually be assigned to one federal appellate court by lottery.

Free Press policy director Matt Wood says the protections for wireless technology are much weaker than for wired technology like cable modem or DSL. According to Wood, the FCC's final rule will allow Internet service providers to block applications for wireless devices and discriminate in its service provision, by offering some customers faster connectivity: “We believe every website should be on more or less equal footing on the Internet.”

Verizon Sues

In April, the U.S. Circuit Court of Appeals for the District of Columbia threw out two cases filed by Verizon Communications and MetroPCS Communications, which challenged the FCC's authority to issue the rules. The court found that the companies' suits were untimely because they predated Federal Register publication of a final rule.

Verizon did just that, filing suit on Sept. 30. See, Verizon v. FCC, No. 11-1355 (D.C. Cir. 2011). In a statement, Verizon said that it “is fully committed to an open Internet. We are deeply concerned by the FCC's assertion of broad authority to
impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers.”

The FCC answered with a Motion to Dismiss, saying that Verizon's argument that the FCC overstepped its jurisdiction is invalid: “Verizon's theory of jurisdiction is that the FCC modified its radio licenses within the meaning of '402(b)(5) because the Open Internet Order cited the agency's authority under 47 U.S.C. '316 to modify licenses, among numerous other statutory bases of authority. Notice of Appeal at 2. Section 402(b)(5), however, applies only when this Court is asked to review an FCC order that modifies specific individual licenses. It does not apply to review of generally applicable Commission orders that, like the Open Internet Order, regulate a broad group of licensees as a class. ' Because it is a generally applicable rulemaking order that did not modify any specific, individual license, the Open Internet Order is not subject to an appeal under Section 402(b).” Verizon v. FCC, Motion to Dismiss (available at www.fcc.gov/document/verizon-v-fcc-no-11-1355-dc-cir).

More Challenges Coming

There will be scores if not hundreds of parties seeking to challenge the FCC on the issue, predicts Glenn Manishin, a Washington partner at Philadelphia's Duane Morris whose practice includes telecommunications and technology policy work. Manishin is not involved in the petitions.

“The challenge for the court will be deciding how many briefs it wants to receive,” Manishin says.

Manishin also says that network neutrality will spawn a wide range of legal issues for companies that provide Internet access: “Any business that depends upon the Internet, or provides Internet services, particularly with regard to digital content, is going to be affected one way or another.”

Appellate challenges to the Federal Communications Commission's (FCC) open Internet regulations are piling up days after the agency's release of its final rule on the matter.

The FCC's publication on Sept. 23 of a final rule in the Federal Register opened the floodgates for court challenges. See, Preserving the Open Internet; Final Rule, 76 Federal Reg. 59,192 (Sept. 23, 2011) (http://bit.ly/qqLGoC).

The hotly contested rule on open Internet, also referred to as “net neutrality,” details standards for Internet-access providers' management of information in their networks.

A media advocacy group called Free Press filed a petition with the U.S. Court of Appeals for the First Circuit on Sept. 28. (The petition can be found at http://pdfserver.amlaw.com/nlj/1stCirFreePressvPetition.pdf.)

Non-profit law firm and advocacy organization Media Access Project also recently filed three petitions on behalf of various clients in the federal appellate courts in the Second, Fourth and Ninth Circuits. (The petitions can be found, respectively, at http://bit.ly/nmaYrZ, http://bit.ly/nco1UJ, and http://bit.ly/qZNQVp.)

The final rule, which kicks in Nov. 20, generally requires fixed and mobile broadband providers to disclose their network management practices, performance
characteristics and service terms. They're also barred from blocking legal content, services and devices and from unreasonably discriminating when transmitting network traffic.

The appeals will eventually be assigned to one federal appellate court by lottery.

Free Press policy director Matt Wood says the protections for wireless technology are much weaker than for wired technology like cable modem or DSL. According to Wood, the FCC's final rule will allow Internet service providers to block applications for wireless devices and discriminate in its service provision, by offering some customers faster connectivity: “We believe every website should be on more or less equal footing on the Internet.”

Verizon Sues

In April, the U.S. Circuit Court of Appeals for the District of Columbia threw out two cases filed by Verizon Communications and MetroPCS Communications, which challenged the FCC's authority to issue the rules. The court found that the companies' suits were untimely because they predated Federal Register publication of a final rule.

Verizon did just that, filing suit on Sept. 30. See, Verizon v. FCC, No. 11-1355 (D.C. Cir. 2011). In a statement, Verizon said that it “is fully committed to an open Internet. We are deeply concerned by the FCC's assertion of broad authority to
impose potentially sweeping and unneeded regulations on broadband networks and services and on the Internet itself. We believe this assertion of authority is inconsistent with the statute and will create uncertainty for the communications industry, innovators, investors and consumers.”

The FCC answered with a Motion to Dismiss, saying that Verizon's argument that the FCC overstepped its jurisdiction is invalid: “Verizon's theory of jurisdiction is that the FCC modified its radio licenses within the meaning of '402(b)(5) because the Open Internet Order cited the agency's authority under 47 U.S.C. '316 to modify licenses, among numerous other statutory bases of authority. Notice of Appeal at 2. Section 402(b)(5), however, applies only when this Court is asked to review an FCC order that modifies specific individual licenses. It does not apply to review of generally applicable Commission orders that, like the Open Internet Order, regulate a broad group of licensees as a class. ' Because it is a generally applicable rulemaking order that did not modify any specific, individual license, the Open Internet Order is not subject to an appeal under Section 402(b).” Verizon v. FCC, Motion to Dismiss (available at www.fcc.gov/document/verizon-v-fcc-no-11-1355-dc-cir).

More Challenges Coming

There will be scores if not hundreds of parties seeking to challenge the FCC on the issue, predicts Glenn Manishin, a Washington partner at Philadelphia's Duane Morris whose practice includes telecommunications and technology policy work. Manishin is not involved in the petitions.

“The challenge for the court will be deciding how many briefs it wants to receive,” Manishin says.

Manishin also says that network neutrality will spawn a wide range of legal issues for companies that provide Internet access: “Any business that depends upon the Internet, or provides Internet services, particularly with regard to digital content, is going to be affected one way or another.”