TR Daily Opponents of RIF Order Make Their Cases to D.C. Circuit
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Tuesday, August 21, 2018

Opponents of RIF Order Make Their Cases to D.C. Circuit

In two joint briefs, governmental entities and non-governmental entities have laid out their arguments challenging the FCC’s late 2017 order that eliminated most of the net neutrality protections adopted less than three years earlier, telling the U.S. Court of Appeals for the District of Columbia Circuit that the 2017 action ignored statutory language, departed from a previous Commission ruling without justification, lacked sufficient justification in the record, and ignored contrary evidence in the record.

The non-governmental petitioners — which included telecom and tech sector companies and trade groups, purchasers of broadband Internet access service (BIAS), and public interest groups — argued that the FCC misinterpreted statute in its regulatory reclassification of BIAS, and that “the FCC’s failure to consider the evidence, abandonment of the open Internet rules, and denial of motions to introduce additional evidence, violates the APA or is otherwise contrary to law.”

Twenty-two state attorneys general and various other state and local government entities said in their joint brief that the preemption of state laws that impose net neutrality protections violates the Communications Act of 1934, as amended, which established “a system of dual state and federal regulation.”

In consolidated cases beginning at “Mozilla Corp. v. FCC” (case 18-1051), parties are appealing the FCC’s December 2017 restoring Internet freedom (RIF) order that overturned nearly all of the provisions of the open Internet order adopted by a Democratic-controlled Commission, including the classification of BIAS as a telecommunications service subject to common carrier regulation under Title II of the Communications Act; the classification of mobile broadband as a private mobile service subject to Title II regulation; bright-line rules against blocking, throttling, and paid prioritization; and the Internet general conduct standard.

The RIF order left in place transparency requirements of the 2015 order and imposed specific transparency requirements on Internet service providers, directing them to disclose if they engage in blocking, throttling, paid prioritization, or prioritization of affiliate content or services.

The RIF order also stated that BIAS is an interstate service and preempted state actions that conflict with the federal regime for ISPs. (TR Daily, Dec. 14, 2017).

In joint comments, Mozilla, Vimeo, Inc., Public Knowledge, New America’s Open Technology Institute, the National Hispanic Media Coalition, NTCH, Inc., the Benton Foundation, Free Press, the Coalition for Internet Openness, Etsy, Inc., the Ad Hoc Telecom Users Committee, the Center for Democracy and Technology, and Incompas said, “The principal ground for reclassification was the FCC’s view that, even if BIAS did nothing more than provide a telecommunications path to third-party edge providers offering information services, that path in itself qualified as an ‘information service.’ ... As a backup, the FCC claimed that DNS [look-up] and caching are information services that make BIAS an information service in its totality.”

They said that the 2017 order’s reclassification of mobile broadband conflicted with the D.C. Circuit’s decision to uphold the 2015 order.

“In the FCC’s view, Title II classification imposed ‘considerable social cost, in terms of foregone investment and innovation’ with ‘no discernable incremental benefit relative to Title I classification.’ …. Yet the FCC did not identify any providers interested in engaging in the conduct the 2015 Order prohibited. ... It hypothesized that, if competition failed to prevent harmful behavior, ‘pre-existing legal remedies, particularly antitrust and consumer protection laws, [would] sufficiently address such harms,’” they added.

In addition, the non-governmental petitioners said, “The FCC did not engage in the robust cost-benefit analysis the NPRM had promised, contenting itself with a ‘qualitative,’ ‘direction[al]’ determination. …. The FCC also denied NHMC’s motion to include and consider informal consumer complaints under the previous rules, which NHMC had asked be included in the record. … The FCC likewise denied INCOMPAS’s motion to allow access to sealed records of recent merger proceedings involving major BIAS broadband providers.”

They said that the analysis used by the FCC to classify BIAS as an information service is analogous to viewing a delivery service as “the product in the parcel. On the FCC’s theory, BIAS becomes an information service, not because it is bundled with information services as part of a unified ‘offer’ itself, but because it connects to services and content provided by Hulu, Skype, Snapchat and millions of others.

“This Court summarily rejected that interpretation when the petitioners raised it in [U.S. Telecom Association v. FCC, which challenged the 2015 order], since a conduit is a conduit, and was considered one by Congress,” the non-governmental petitioners continued.

“The law defines ‘telecommunications’ as the transmission of information between points specified by the user without change in the information’s form or content. There is no exception for transmissions that are intended to allow access to an information service. Indeed, the Order’s newly imagined exception to the telecommunications service definition is close to the very definition of telecommunications service: BIAS providers simply transmit information between users. None of Comcast, AT&T or Verizon adds scenes to the movies we watch online or embellishes our friends’ notes on a social media ‘wall,’” they added.

“In fact, the FCC avowedly refused to interpret the ‘telecommunications’ and ‘telecommunications service’ definitions altogether—one more mistake, as the agency may not choose which of the two categories applies by examining only one of them,” they said.

As for the RIF order’s reliance on DNS look-up and caching as information services “important enough to make BIAS an information service itself,” the petitioners said that “the record shows BIAS consumers buy transmission without caring, or knowing, about these functions and who provides them” and that “the Supreme Court has found consumer perception is the lodestar for classifying BIAS. The attempt to elevate DNS and caching into the main event is equivalent to claiming that consumers view their dogs as an inseparable accessory to their dogs’ leashes.”

They said that the “abrupt about-face” from the 2015 order “was not adequately reasoned.”

They said that the FCC ignored statements by BIAS executives that the 2015 rules would not deter broadband network investment and “showed no regard for Internet investment.”

“The FCC’s ‘do-nothing’ preference exhibited itself glaringly in its attitude toward competition. The very statistics on which the agency relied show that about half of Americans have either one or zero wireline BIAS option and about 45% have only two. But the agency charged with promoting competitive markets found it was not worth considering rules that would mitigate the impacts of this dismal lack of competition,” the non-governmental providers said.

“For households that can choose between providers, the agency ignored the difficulties of switching from one to another, documented in the record and familiar to all of us who have ever wanted or tried to do it. The agency also unreasonably denied two motions to introduce relevant evidence: the record in BIAS provider merger proceedings, which is directly probative of their power and past interference with the Internet; and the thousands of consumer complaints (and related materials) filed under the 2015 rules — an essential part of the record for a proceeding considering abolition of these rules,” they added.

In joint comments, the states of New York, California, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington; the District of Columbia; the County of Santa Clara; the Santa Clara County Central Fire Protection District; and the California Public Utilities Commission, joined by intervenor the city and county of San Francisco, said that the 2017 order is “a dramatic and unjustified departure” from the FCC’s “commitment” for “more than 15 years” to “an open Internet free from blocking, throttling, or other interference by service providers.”

In addition to the reasons cited by the non-government petitions for holding the order invalid, the government petitioners said that “the Order is arbitrary and capricious because it failed to reconcile the Commission’s abdication of regulatory authority with the inevitable harms that the Order will cause to consumers, public safety, and existing regulatory schemes. Indeed, the Order entirely ignored many of these issues, including public safety, in violation of the agency’s statutory mandate.”

The government petitioners added, “The Order compounded its devastating impact on millions of Americans by purporting to preempt state and local laws that would protect consumers and small businesses from abuses by service providers. The Commission identified no valid authority for such preemption. The Order’s attempt to preempt state and local laws thus must be invalidated.”

In evaluating the impact of the changes wrought by the RIF order, the FCC “did not perform any analysis of the public safety risks that several parties (including Government Petitioners) had identified in the record, despite its statutory mandate to consider such safety concerns. The Commission also summarily dismissed record evidence of serious reliance interests on the Commission’s long-standing protection of an open Internet, mistakenly asserting that no such interests exist,” the government petitioners said.

They also said that the FCC “wrongly declined to address the effect of reclassification on universal service programs and other state regulatory structures.”

The government petitioners continued, “Even if the Order were otherwise lawful, the Commission exceeded its authority by purporting to preempt state and local governments from taking action to protect consumers and edge providers from abuses by BIAS providers. Having disavowed Title II authority over broadband, the Commission’s preemption order can be rooted only in Title I ancillary authority, which in turn must be based on some separate statutorily mandated responsibility. The Order identified no such mandate, and instead relied on a purported federal policy of deregulation unmoored from any specific statutory command. But as this Court held in Comcast Corp. v. FCC, policy alone cannot provide the basis for the Commission’s exercise of ancillary authority, and hence cannot support the Order’s attempt to preempt here.”

The D.C. Circuit’s 2010 decision to overturn an FCC action taken against Comcast regarding the company’s network management activities the absence of FCC rules prohibiting those activities led the FCC to adopt rules that the D.C. Circuit subsequently judged improperly imposed Title II obligations on services that at the time the FCC did not classify as Title II services. That decision, in turn, led to the 2015 order classifying BIAS as a Title II service.

“Nor can the Commission rely on conflict preemption to support the Order. The Commission did not specifically identify conflict preemption as a basis for its Order, and any assertion of conflict preemption as a facial matter — divorced from consideration of a specific law or regulation — would be premature and invalid. In any event, there is no conflict between state regulation of broadband service and the Communications Act, which expressly contemplates and relies on active state supervision in this area,” the government petitioners added.

In an addendum to the government petitioners’ brief, Anthony Bowden, the fire chief for the Santa Clara County Central Fire Department, said that the department has experienced throttling by its Internet service provider (ISP), Verizon, which “has had a significant impact on our ability to provide emergency services. Verizon imposed these limitations despite being informed that throttling was actively impeding County Fire’s ability to provide crisis-response and essential emergency services.”

Mr. Bowden recounted throttling that affected a unit deployed to track personnel and equipment supplied from other local, state, and government agencies deployed to the Mendocino Complex Fire. “[D]ata rates had been reduced to 1/200, or less, than the previous speed,” thus “severely” interfering with the ability of the OES 5262 tracking unit to function effectively,” he said.

In an e-mail to Verizon, the fire department “explained the importance of OES 5262 and its role in providing for public and first-responder safety and requested immediate removal of the throttling. Verizon representatives confirmed the throttling, but, rather than restoring us to an essential data transfer speed, they indicated that County Fire would have to switch to a new data plan at more than twice the cost, and they would only remove throttling after we contacted the Department that handles billing and switched to the new data plan.”

In a statement, Verizon said, “This situation has nothing to do with net neutrality or the current proceeding in court.

“We made a mistake in how we communicated with our customer about the terms of its plan. Like all customers, fire departments choose service plans that are best for them. This customer purchased a government contract plan for a high-speed wireless data allotment at a set monthly cost. Under this plan, users get an unlimited amount of data but speeds are reduced when they exceed their allotment until the next billing cycle. Regardless of the plan emergency responders choose, we have a practice to remove data speed restrictions when contacted in emergency situations. We have done that many times, including for emergency personnel responding to these tragic fires. In this situation, we should have lifted the speed restriction when our customer reached out to us. This was a customer support mistake. We are reviewing the situation and will fix any issues going forward,” Verizon added.

Meanwhile, University of California–Irvine computer science professor Scott Jordan and Carnegie Mellon University engineering and public policy professor Jon Peha, both former FCC chief technologists, filed a notice with the court today of their intent to file an amicus curiae brief in support of petitioner.

In a statement, U.S. Telecom Association President and Chief Executive Officer Jonathan Spalter said, “As we’ve said many times, our nation’s broadband providers stand with their consumers in supporting a free and open internet — without 1930’s-era regulations — and with consumer protections that are applied consistently across the entire internet ecosystem and not exclusively on ISPs. As this case winds its way through federal court, it is worth noting what has not happened since the FCC’s order: the internet as we know it is still thriving, growing, open and continues to spin on its axis. The predictions made by some that ISPs would engage in throttling, blocking, and anti-competitive prioritization, have not happened. When it comes to maintaining our open, innovating internet, consumers deserve smart, modern and unambiguous protections that apply consistently to all parts of the internet ecosystem — not the backwards and balkanized approach these state attorneys general would impose on America’s internet consumers. That is what we will continue to fight for in this case and ultimately in Congress.” —Lynn Stanton, [email protected]

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