Cleland served as Deputy United States Coordinator for Communications and Information Policy in the George H. W. Bush Administration. Eight Congressional subcommittees have sought Cleland’s expert testimony and Institutional Investor twice ranked him the #1 independent analyst in his field. Scott Cleland has been profiled in Fortune, National Journal, Barrons, WSJ’s Smart Money, and Investors Business Daily. Ten publications have featured his op-eds. For a full bio see: www.ScottCleland.com.
Latest posts by Scott Cleland (see all)
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Will this FCC legal team learn from the legal mistakes of their predecessors and ensure the FCC has a thorough and a sufficient legal record to justify their legal theories, given that the FCC already has failed twice in crafting legal net neutrality regulations in Comcast v. FCC in 2010 and again in Verizon v. FCC in 2014?
Kindly, the U.S. Court of Appeals has provided the FCC a roadmap to follow to legally justify their net neutrality rules under Section 706.
It is telling that the court provided no similar legal “roadmap” for Title II reclassification. That’s because Title II reclassification would require successfully backtracking decades of opposing FCC and court precedents and remixing FCC authorities in new and imaginative ways to traverse uncharted legal territory.
Simply the court implicitly recognizes there is no roadmap for uncharted territory.
The last outcome the FCC should want, is for their third attempt to craft legal net neutrality rules-of-the-road to fail, because the FCC failed to control what the FCC can and should control, building a predictably thorough and sufficient record, and abiding by required, well-known, administrative and comment procedures.
Simply, the FCC does not want to fail such a high-profile legal test, a third time, because in an unnecessary rush, the FCC did not do all their homework or follow all the test’s basic administrative rules.
There are at least ten predictable, potential major deficiencies in the FCC’s record, anyone of which could doom the legality of the FCC’s rulemaking, if not appropriately addressed and justified in the record.
Top Ten Deficiencies in the FCC’s Title II Record
- New June 2014 SCOTUS Precedent? The FCC has not asked for comment on the legal implications of a highly-relevant, June 2014, Supreme Court precedent: (Util. Air Reg. Grp v. EPA) — that effectively limits Chevron Deference by establishing precedent that agency rules “must be “ground[ed] … in the statute,” rather than on “reasoning divorced from the statutory text.” Simply, where in the Communications Act does it authorize the FCC to act in a way that it enables the FCC to evade another statutory provision that explicitly restricts FCC authority?
- New Presidential Title II Push? President Obama’s unusual high-profile call for Title II utility regulation of the Internet, after the FCC NPRM proposed a different Section 706 course, creates a new increased need for a robust record to withstand charges of arbitrariness and capriciousness, especially given Judge Silberman’s Verizon v. FCC final warning to the FCC. “This regulation essentially provides an economic preference to a politically powerful constituency that, as is true of typical rent-seekers, wishes protection against market forces. The Commission does not have authority to grant such a favor.”
- Forbearance Contradiction? How does the FCC justify Title II reclassification based on the existence of insufficient competition to protect consumers, while at the same time forbearing from most all Title II consumer protections because there is the existence of enough competition to protect consumers?
- Non-Forbearance Forbearance? The FCC already did the ultimate Title II forbearance, in previously, and repeatedly, classifying the Internet as an information service. Thus reclassifying the Internet as Title II telecommunications is actually un-forbearance (an increase in regulation with partial forbearing). How can a big net-increase in regulation, be legitimately called “forbearance” at all, and justified under the 1996 Communications Act’s purpose to “promote competition and reduce regulation in order to secure lower prices… for consumers” when it actually directly and indirectly would substantially increase consumers’ prices, taxes and fees?
- Unprecedented Forbearance? When all FCC forbearance precedents to date have been narrow and protracted, what evidence or precedent supports the notion that sweeping FCC Title II forbearance can be accomplished legally and expeditiously to not slow broadband deployment or reduce broadband competition?
- Forbearance Limits? How can the FCC forbear from regulating Title II telecommunications of non-facilities based, “edge” information service providers, when the Supreme Court already ruled differently in its Brand X decision: If the Communications Act classified “as telecommunications carriers all entities that use telecommunications inputs to provide an information service,”… the Act “would subject to mandatory common carrier regulation all information service providers that use telecommunications as an input to provide information service to the public.” … “The relevant definitions do not distinguish facilities-based and non-facilities-based carriers”… so reclassifying would “subject to common carrier regulation non-facilities-based ISPs that own no transmission facilities.”
- Innovation Contradiction? For decades, the FCC, Courts and Congress have proactively not applied Title II common carrier regulation (which is inherently government-permission-based for most every significant business action) to data or Internet services, in order to promote innovation. Given that one of the FCC’s explicit purposes in the NPRM is to promote “innovation without permission,” what evidence in the record shows that past anti-Title II policies did not promote innovation, and reversing course to impose Title II would promote more innovation?
- Sending-Party-Pays Contradiction? What evidence in the record justifies using Title II — an eighty-year-old, sending-party-pays economic model that ensured the system was economically-self-sustaining and cohesive — to impose the opposite receiving-party-pays economic model that undermines economic sustainability and forces consumers to subsidize businesses?
- Commercially Reasonable? What evidence justifies the FCC notion that a de facto ban on a two-sided market via a permanent zero-price for Internet downstream traffic is “commercially reasonable” under Title II Section 202’s “just and reasonable” pricing standard?
- Congressional Legitimacy? Given that the FCC is attempting to impose a permanent ban on Internet downstream traffic, something not allowed under Section 706 or Title II’s “just and reasonable” pricing standard, why did the FCC decide to not ask Congress for the Internet price regulation authority the FCC believes may be necessary for the 21st century?
In short, the court provided the FCC no legal roadmap to justify applying Title II to impose net neutrality. This legal uncharted territory obviously demands the best possible FCC record, if the FCC hopes to avoid a very-likely legal “strike three!”