FCC’s Net Neutrality Rules Should Be Upheld in the Supreme Court

The Federal Communications Commission is poised to reinstate its net neutrality rules, which would reclassify broadband as a telecommunications service and prohibit broadband providers from blocking or throttling internet traffic. The proposed rules are virtually identical to those the US Court of Appeals for the D.C. Circuit upheld in 2016.

Nevertheless, Donald Verrilli and Ian Gershengorn recently opined in Bloomberg Law that an FCC decision adopting those rules “will not survive a Supreme Court encounter with the major questions doctrine.” To the contrary, the courts are far from certain to strike down the net neutrality rules the FCC has proposed. Indeed, they should uphold them.

The key statutory construction issue is whether broadband internet access service is better classified as a “telecommunications service” or an “information service.” Those terms, which were added to the Communications Act in 1996, were based on the FCC’s long-standing distinction between transmission services and content services.

Accordingly, the first consumer broadband service—digital subscriber line or DSL—which had been classified as a basic telecommunications service before 1996, continued to be classified that way. That was straightforward: Broadband provides transmission and is therefore a telecommunications service that may be used to access information services such as websites.

In 2002, the FCC changed course and reclassified broadband as an information service. When the issue came before the US Supreme Court in 2005, Justice Antonin Scalia, in a dissent joined by Justices David Souter and Ruth Bader Ginsburg, explained why the statute unambiguously requires the conclusion that broadband is a telecommunications service.

He described the FCC’s 2002 decision to classify broadband as an information service to be “an implausible reading of the statute.” As he explained, broadband providers offer “high-speed access to the Internet”—that is, transmission service—that can be used to access content.

No Supreme Court justice contended that broadband is better classified as an information service. Instead, applying the deferential Chevron standard, Justice Clarence Thomas, writing for the majority, concluded that the FCC had adopted a “permissible” reading of the statute. Justice Stephen Breyer joined the majority, but appeared to be holding his nose while deferring to the FCC’s interpretation, saying it was “perhaps just barely” plausible.

It follows that an FCC decision reclassifying broadband as a telecommunications service should be upheld. It’s not merely plausible—it’s the better reading of the statute. Verrilli and Gershengorn nevertheless contend the Supreme Court will invoke the “major questions doctrine” to conclude that broadband should be classified as an information service. However, the court’s latest application of that doctrine suggests it will not apply it to avoid the best interpretation of a statute.

In Biden v. Nebraska, the court struck down the secretary of education’s conclusion that he could forgive about $400 billion in student debt, but the opinion of Chief Justice John Roberts for the court emphasized its invocation of the major questions doctrine was in aid of determining the best reading of the statute. Justice Amy Coney Barrett’s concurring opinion explicitly argued the court shouldn’t use the doctrine to avoid the most natural interpretation of a statute.

Net neutrality is very different from the cases where the court has invoked the major questions doctrine. This isn’t a case where an agency has discovered a new power in the vague text of a statute adopted decades ago.

Rather, the 1996 act plainly defined “telecommunications” as a transmission service and broadband was initially classified as a telecommunications service. And, as Justice Antonin Scalia concluded, that is the best reading of the statute. A finding that a statute is ambiguous enough to support multiple interpretations shouldn’t deter a court from upholding that best interpretation.

Moreover, the net neutrality rules at issue aren’t “major.” The internet service providers that oppose the net neutrality rules claim that the ISPs don’t block or throttle traffic and don’t intend to do so. Those proposed rules therefore preserve the real-world status quo under which, as recognized by the D.C. Circuit, a “virtuous cycle” exists: Content providers invest in their businesses, assured that their content will not be blocked or throttled, and broadband providers expand their networks to handle the additional content, which leads to further network expansion.

Verrilli and Gershengorn repeat the canard that the FCC is proposing “utility-style” regulation. That isn’t accurate. That sort of regulation involves mandatory filing of rate schedules (called tariffs), regulatory review of those rate schedules before they go into effect, determining whether the utility made prudent spending decisions, what rate of return should be allowed on physical investment, what depreciation assumptions are appropriate, and much more.

The FCC made clear in its proposal that it will use its authority to “forbear” from those requirements. The internet service providers nevertheless contend reclassification could lead to rate regulation and the imposition of other aspects of utility-style regulation.

But if a future FCC seeks to reverse its forbearance decision, it will have to provide a reasoned justification for doing so, which will be very difficult in light of the long-standing bipartisan agreement that such regulation isn’t warranted.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Christopher Wright is co-chair of the issues and appeals group at HWG. He was general counsel of the FCC, a lawyer in the Solicitor General’s Office, and a law clerk to Chief Justice Warren Burger.

Write for Us: Author Guidelines