United States Telecom Assoc. v. FCC [Order In Slip Opinion Format]

U.S. Court of Appeals5/1/2017
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Full Opinion

BROWN, Circuit Judge,

dissenting from the denial of rehearing en banc:

An independent federal agency sits at the intersection of the road to the White House and Constitution Avenue. Two statues that capture struggle between man and horse flank the agency. The statues are called “Man Controlling Trade,” and they depict a man, the government, restraining a horse, the marketplace. Though the statues look similar, they are not the same. On the President’s road, the horse— the marketplace — looks threatening, as if it will topple the brawny man trying to grasp the reins. On Constitution Avenue, the man — the government — is the threatening one, grasping the reins on both sides of the animal’s head; it appears he is trying to overpower a valiant and sympathetic horse. Here, as with the statues, an independent agency sits at the crossroads of competing visions — the President’s view of the Internet as threatening consumers, and the libertarian view of government as strangling the greatest market innovation of the last century. But an orthodox view of checks and balances leaves the choice of vision to Congress.

Congress passed, and President Clinton signed, the Telecommunications Act of 1996 (the “Act”), and its meaning could not be clearer: “to preserve the vibrant and competitive free market that presently exists for the Internet ..., unfettered by Federal or State regulation.” 47 U.S.C. *394§ 230(b)(2) (emphasis added). For nearly two decades, the federal government respected the Act’s deregulatory .policy. Presidents enforced it, Congresses did not alter it, and the Federal Communications Commission (“FCC” or the “Commission”) gave the Internet only a light-touch regulation. When FCC regulation went beyond a light touch, this Court intervened. See Verizon v. FCC, 740 F.3d 623, 629-30, 650-59 (D.C. Cir. 2014). However, the regulatory proposal now before the Court seeks to end this longstanding consensus.

When the FCC followed the Verizon “roadmap” to implement “net neutrality” principles without heavy-handed regulation of Internet access, the Obama administration intervened. Through covert and overt measures, FCC was pressured into rejecting this decades-long, light-touch consensus in favor of regulating the Internet like a public utility. This sea change places the Commission in control of Internet access. G. Nagesh & B. Mullins, Net Neutrality: How White House Thwarted FCC Chief, Wall St. J. (Feb. 4, 2015).

Abandoning Congress’s clear, deregula-tory policy does more than subject Internet access to a regulatory framework fit for the horse and buggy. The FCC’s statutory rewrite relegates the Constitution’s vital separation of powers framework to “a mere parchment delineation of the boundaries;” a hollow guarantee of liberty. See The Federalist No. 73 (Hamilton), p. 441 (Clinton Rossiter ed., 1961). If we take the Constitution’s structural restraints seriously, we cannot wish the Commission bon voyage on its Presidentially-imposed journey to become the Federal Cyberspace Commission. As that is exactly what the Court’s Opinion does, I respectfully dissent from the denial of rehearing en bane.1

I.

The Act’s Deregulatory Structure

Congress passed the Telecommunications Act of 1996 to amend the Communications Act of 1934, and in doing so, protect the innovation animating the Internet. See Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (“An Act [t]o promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies.”). The Act found that the “Internet and other interactive computer services have flourished, to the benefit of all Americans, with a minimum of government regulation.” 47 U.S.C. § 230(a)(4) (emphasis added). Accordingly, Congress made keeping the Internet “unfettered” by “regulation” our national policy. Id. § 230(b)(2). Achieving this policy required a commitment to deregulatory tools and standards. The Act provided exactly that.

A

Internet Access As An Information Service

' As the Supreme Court explained, the 1996 Act incorporated FCC’s prior practice of distinguishing “basic services,” *395which are provided by “telecommunications services,” and “enhanced services,” which are provided by “information services.” See National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967, 975-77, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005) (“Brand X’). “These two statutory classifications originated in the late 1970⅛, as the Commission developed rules to regulate data-proeess-ing services offered over telephone wires.” Id. at 976, 125 S.Ct. 2688.

“Basic services,” the analogue to the 1996 Act’s “telecommunications services,” were defined as “a pure transmission capability over a communications path that is virtually transparent in terms of its interaction with customer supplied information.” Id. “IN]o computer processing or storage of the information” was part of “basic services,” “other than the processing or storage needed to convert the message into electronic form and then back into the ordinary language for purposes of transmitting it over the network — such as a telephone or facsimile.” Id. (emphasis added). The FCC, and then Congress in 1996, subjected these “basic services,” these “telecommunications services,” to common carrier regulation. Id.

“Enhanced services” are the analogue to “information services” in the 1996 Act, and they are not subject to common carrier regulation. Id. at 977, 125 S.Ct. 2688. The Commission historically defined “enhanced services” to be those where “computer processing applications [were] used to act on the content, code, protocol, and other aspects of the subscriber’s information,” like voicemail. See id. at 976-77, 125 S.Ct. 2688. The regulatory rub with “enhanced service,” as it is here with Internet access, is that it may be “offered via transmission wires” that, themselves, may constitute a “basic” or “telecommunications service.” See id. at 977, 125 S.Ct. 2688. Nevertheless, “given the fast-moving, competitive market” in which [enhanced services] were offered,” the FCC did not subject them to common carrier regulation. Id.

Just so, when Congress exempted “information services” from common carrier regulation in 1996, it followed the FCC’s longstanding course. See id. at 992, 125 S.Ct. 2688 (“Congress passed the definitions in the Communications Act against the background of this regulatory history, and we may assume that the parallel terms ‘telecommunications service’ and ‘information service’ substantially incorporated their meaning, as the Commission has held.”). The statute says “interactive computer service” includes “any” provider of “information service,” and “specifically a service or system that provides access to the Internet.” See 47 U.S.C. § 230(f)(2) (emphasis added). The Act also specifically excludes “telecommunications services” from the definition of “Internet access service.” Id. § 231(e)(4).

Unsurprisingly, the Act’s definition of “information service” fits broadband Internet access like a glove. “[Generating, acquiring, storing,” or “making available information via telecommunications” is what users do on social media websites like Facebook. See id. § 153(24). “[Transforming” or “utilizing” “information via telecommunications” is what users do on YouTube. See id. “[A]cquiring, storing,” and “retrieving ... information via telecommunications” is what users do with email. See id. The “offering of a capability” for engaging in all of these activities is exactly what is provided by broadband Internet access. See id.

B.

Authority To Forbear Burdensome Regulations

Before the 1996 Act, FCC sought to deregulate aspects of the telecommunica*396tions industry on its own authority. But, its assertions of inherent power to “forbear” common carrier regulations engendered judicial skepticism. See, e.g., MCI Telecomms. Corp. v. AT & T, 512 U.S. 218, 234, 114 S.Ct. 2223, 129 L.Ed.2d 182 (1994) (“[T]he Commission’s desire to ‘increase competition’ cannot provide [it] authority to alter the well-established statutory filed rate requirements.... [S]uch considerations address themselves to Congress, not to the courts”); AT & T v. FCC, 978 F.2d 727, 736 (D.C. Cir. 1992) (“We understand fully why the Commission wants the flexibility to apply the tariff provisions of the Communications Act.... But the statute, as we have interpreted it, is not open to the Commission’s construction. The Commission will have to obtain congressional sanction for its desired policy course.”). Heeding these admonitions, Congress gave FCC statutory authority to forbear common carrier regulations in the 1996 Act. See Telecommunications Act of 1996, Pub. L. No. 104-104 § 401, 110 Stat. 56, 128 (1996) (entitled “Regulatory Forbearance” and inserting this section into the Communications Act’s Title I). Logically, forbearance is a tool for lessening common carrier regulation, not expanding it.

The authority to forbear regulation is limited to certain circumstances. FCC is only permitted to forbear when it has shown the common carriage provision is not needed: (1) to ensure just and reasonable prices and practices; or (2) to protect consumers. Forbearance must also be in the public interest. See 47 U.S.C. § 160(a).

C.

Mobile Broadband Cannot Be Common Carnage

The 1996 Act also ensured providers of mobile broadband Internet access “shall not ... be treated as a common carrier for any purpose.” See 47 U.S.C. § 332(c)(2) (emphasis added). Section 332 specifies only a commercial mobile service (or a “functional equivalent”) can be subject to common carrier regulation. Id. §§ 332(c)(1)(A), (c)(2), (d)(3). “Private mobile service,” in contrast, is “any mobile service” that is not a commercial one, and it may not be regulated as a common carrier. See id. § 332(d)(3). Section 332 defines “commercial mobile service” as a mobile service “provided for profit [that] makes interconnected service available [to the public].” Id. § 332(d)(1). The section then defines “interconnected service” as a “service that is interconnected with the public switched network (as such terms are defined by regulation by the [FCC]).” Id. § 332(d)(2). The FCC — until the Order at issue here — always defined “interconnected service” as “giv[ing] subscribers the capability to communicate ... [with] all other users on the public switched network.” See 47 C.F.R. § 20.3 (1994) (emphasis added). “[T]he public switched network” was, in turn, defined as the “common carrier switched network ... that use[s] the North American Numbering Plan.” Id. In other words, “the public switched network” is the telephone network. Though it is legislative history, the 1996 Act’s Conference Report buttresses this textual reading. See H.R. Rep. No. 103-213, at 495 (1993) (characterizing the House version of Section 332 as interconnection with “the Public switched telephone network,” even as both the House and Senate versions of Section 332 referred to “the public switched network”) (emphasis added), reprinted in 1993 U.S.C.C.A.N. 1088, 1184. Moreover, § 332(d)(2) refers to one network: “the public switched network.” In other words, the fact that another network can connect to the telephone network does not make that other network part of “the public switched network.”

*397II.

FCC Practice Preserved The Free Market For Internet Access

It is bizarre that the FCC is now disputing the notion that Congress would “attempt to settle the regulatory status of broadband Internet access services” with the 1996 Act. See Op. 410-11. Barely more than a year after the 1996 Act, Congress charged the FCC with assessing “the definitions of ‘information service’ ... [and] ‘telecommunications service’ ” in the Act, and “the application of those definitions to mixed or hybrid services ... including with respect to Internet access.” See Dep’ts of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1998, Pub. L. No. 105-119, § 623, 111 Stat. 2440, 2521 (1997). What is this but inquiring into “the regulatory status” of Internet access in the 1996 Act and whether Congress was satisfied with its scheme?

The Commission’s report, known as the Universal Service Report, made several conclusions confirming the text, history, and structure of the 1996 Act properly classified Internet access service as “information service.” See, e.g., Federal-State Joint Board on Universal Service, Report to Congress, FCC 98-67, 13 FCC Rcd. 11501, 11513-14 ¶ 27, 11536-40 ¶¶ 74-82 (1998) (hereinafter Universal Service Report). In this report, the FCC also endorsed the view of five Senators saying “[n]othing in the 1996 Act or its legislative history suggests [] Congress intended to alter the current classification of Internet and other information services or to expand traditional telephone regulation to new and advanced services.” Id. at 11520 ¶¶ 38-39. As the Senators’ view parallels the conclusions reached within the Universal Service Report, and their view is quite prescient, their letter is worth quoting at length:

This unparalleled success [in Internet access] has emerged in the context of policies that favor market forces over government regulation — promoting the growth of innovative, cost-effective, and diverse quality services. It is this same pro-competitive mandate that is at the heart of the 1996 Act.... Simply put, Congress has not required the FCC to prepare and submit a Report on Universal Service that alters this successful and historic policy. Moreover, were the FCC to reverse its prior conclusions and suddenly subject some or all informar tion service providers to telephone regulation, it seriously would chill the growth and development of advanced sciences to the detriment of our economic and educational well-being.
Some have argued Congress intended that the FCC’s implementing regulations be expanded to reclassify certain information service providers, specifically Internet Service Providers (ISPs), as telecommunications carriers. Rather than expand regulation to new service providers, a critical goal of the 1996 Act was to diminish regulatory burdens as competition grew. Significantly, this goal has been the springboard for sound telecommunications policy throughout the globe, and underscores U.S. leadership in this area. The FCC should not act to alter this approach.

Letter from Senators John Ashcroft, Wendell Ford, John Kerry, Spencer Abraham, and Ron Wyden to the Honorable William E. Kennard, Chairman, FCC (Received Mar. 23, 1998), http://apps.fcc.gov/ecfs/ document/view?id=2038710001 (emphasis added).

The FCC heeded the Universal Service Report’s, conclusions in subsequent Orders. In its Advanced Services Order, the FCC characterized the “last mile” of Digital Subscriber Line services (DSL services), *398or “broadband Internet service furnished over telephone lines,” as a “telecommunications service.” See Verizon, 740 F.3d at 630-31 (citing In re Deployment of Wireline Services Offering Advanced Telecommunications Capability, 13 FCC Rcd. 24012, 24014 ¶ 3, 24029-30 ¶¶ 35-36 (1998) (“Advanced Services Order")). But, the Advanced Services Order specified the last-mile transmission between the end user and the Internet Service Provider is distinct from the “enhanced service” of Internet access itself. “The first service is a telecommunications service (e.g., the ... transmission path), and the second service is an information service, in this case Internet access.” See Advanced Services Order, 24030 ¶ 36.

In 2002, the FCC issued its Cable Broadband Order. The Commission found that cable modem service “supports such functions as email, newsgroups, maintenance of the user’s world wide web presence, and the DNS. Accordingly ... cable modem service” is “an Internet access service,” making it “an information service.” See Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities; Internet Over Cable Declaratory Ruling; Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable Facilities, FCC 02-77, 17 FCC Rcd. 4798, 4822 ¶ 38 (2002) {“Cable Broadband Order”). This classification stood irrespective of the fact that “cable modem service provides the [enhanced service] capabilities described [ ] via ‘telecommunications.’ ” Id. 4823 ¶ 39. In the case of cable modem service, “[t]he cable operator providing cable modem service over its own facilities ... is not offering telecommunications service to the end user, but rather is merely using telecommunications to provide end users with cable modem service.” Id. 4823-24 ¶ 41. The distinction between the services still stood, even as the nature of cable modem service rendered it an integrated “information service.” This confirms, again, what is of relevance here: the fact that an “information service,” like Internet access, has “telecommunications services” among its component parts does not per se make it a “telecommunications service.” The Cable Broadband Order was at issue in Brand X.

A.

Brand X

In Brand X, the Supreme Court left the FCC’s “information service” classification of cable-provided Internet access “unchallenged.” See 545 U.S. at 987-88, 125 S.Ct. 2688. Brand X also acknowledged, as FCC acknowledged in its prior Orders and in its briefing before the Brand X Court, “information service ... [is] the analog to enhanced service” in the 1996 Act, and this “information service” includes accessing the Internet. See 545 U.S. at 987, 125 S.Ct. 2688; see also FCC Brand X Reply Br. 5, No. 04-277 (Mar. 18, 2005) (explaining Internet access allows the user to “interact[ ] with stored data ... maintained on the facilities of the other ISP (namely the contents of ... web pages, e-mail boxes, etc.)”). When explaining why cable modem service was an “information service,” the Brand X Court relied on cable modem service “providing] consumers with a comprehensive capability for manipulating information using the Internet via high-speed telecommunications” — namely, “enabling users, for example, to browse the World Wide Web .... [to] mateh[ ] the Web page addresses that end users type into their browsers (or ‘click’ on) with the Internet Protocol (IP) addresses of the servers containing the Web pages the users wish to access.” Id. at 987, 125 S.Ct. 2688. Even as cable modem service relied on “telecommunications service” to bring this “information service” to the end user, *399“the nature of the functions the end user is offered” was Internet access, an information service — rendering the classification proper. See id. at 988, 125 S.Ct. 2688 (emphasis added). The presumption here is, under the 1996 Act, Internet access is information service.

Brand X cannot be read to render broadband Internet access a “telecommunications service.” As the Supreme Court said, “the entire question [in Brand Z] is whether the products here are functionally integrated or functionally separate.” Id. at 991, 125 S.Ct. 2688 (emphasis added). In other words, does the fact that cable modem service delivers the “information service” of Internet access through a “telecommunications service” render the two services one “offer” of “information service?” Or, is there one “offer” of “telecommunications service” in the transmission and one “offer” of “information service” in the Internet access? To channel Justice Scalia’s Brand X pizzeria analogy, the Brand X majority found cable modem service a single “offer” of “information service,” or a pizzeria’s single “offer” of pizza and pizza delivery. Justice Scalia, in contrast, thought cable modem service contained “offers” of “telecommunications” and “information” services, respectively, or separate “offers” of “pizza delivery” and “pizza.” No member of the Brand X Court disputed that what occurred at the Internet Service Providers’ computer-processing facilities constituted an “information service.” See 545 U.S. at 997-1000, 125 S.Ct. 2688; see also id. at 1009-11, 125 S.Ct. 2688 (Scalia, J., dissenting). Or, continuing the analogy, no 'member of the Brand X Court disputed that the pizzeria makes pizza. FCC would confirm that nothing in Brand X rendered Internet access itself a “telecommunications service.” See Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, et al., FCC 05-150, 20 FCC Rcd. 14853, 14862 ¶ 12 (2005) (“Internet access service is an information service”).

B.

Reclassification and Verizon

The FCC repeatedly affirmed the Act’s deregulatory approach toward mobile broadband Internet access as well. In 2007, the Commission said “mobile wireless broadband Internet access service does not fit within the definition of ‘commercial mobile service’ ” because it is not an “interconnected service” — it connects to the Internet and not the telephone network. See Appropriate Regulatory Treatment for Broadband Access to the Internet Over Wireless Networks, FCC 07-30, 22 FCC Rcd. 5901, 5916 ¶ 41, 5917 (2007).2 The FCC reached the same conclusion in 2011. See Reexamination of Roaming Obligations of Commercial Mobile Radio Service Providers and Other Providers of Mobile Data Services, FCC 11-52, 26 FCC Rcd. 5411, 5431 ¶ 41 (2011). In doing so, the Commission confirmed mobile broadband’s status as outside common carrier classification.

This Court was equally consistent about the status of mobile broadband Internet service. In Cellco Partnership v. FCC, 700 *400F.3d 534 (D.C. Cir. 2012), this Court said Section 332 provides a “statutory exclusion of mobile-internet providers from common carrier status.” See id. at 544. When the FCC attempted to treat mobile broadband like a common carrier in Verizon, this Court minced no words — -the “treatment of mobile broadband providers as common carriers would violate section 332.” 740 F.3d at 650.

To be sure, this Court said in Verizon that, under Section 706 of the 1996 Act, the FCC “never disclaimed authority to regulate the Internet or Internet providers altogether.” See id. at 638. Whatever the wisdom of Verizon’s interpretation of Section 706, the FCC did not “reclassify broadband” to implement “net neutrality” principles in that case. See id. at 633. In fact, as Judge Williams noted in dissent from the Court’s Opinion here, “the Verizon court struck down the rules at issue on the ground that they imposed common carrier duties on the broadband carriers, im-permissibly so” under the Act. See Concurring & Dissenting Op. 770 (emphasis in original); see also Verizon, 740 F.3d at 650 (“[R]egulating broadband providers as common carriers” would “obvious[ly] ... violate the Communications Act.”); see also id. at 656-59. Moreover, Verizon did not require the FCC to reclassify broadband in the future if the Commission wanted to implement any form of “net neutrality.” Instead, Verizon identified FCC authority in Section 706 to implement some “net neutrality” regulations without reclassification (such as FCC’s “transparency rules,” which the Verizon Court upheld). When crafting this Order, the Commission took note of Verizon’s conclusions.

In announcing the Order here, the FCC Chairman claimed the Order “proposed” to “reinstate rules that achieve the goals of the 2010 Order using the Section 706-based roadmap laid out by the court [in Verizon].” See Notice of Proposed Rulemaking, FCC 14-61, 29 FCC Rcd. 5561, 5647 (2014) (statement of Chairman Tom Wheeler). No statement from the FCC— until after the President intervened, that is — ever suggested the Commission felt compelled by Verizon to reclassify broadband if it wanted to implement any “net neutrality” principles. Indeed, when the Notice of Proposed Rulemaking explained the contours of the Order’s ban on commercially unreasonable practices, it stated the following as FCC’s goal: “[CJodifying an enforceable rule to protect the open Internet that is not common carriage per se.” See id. at 5599, Subpart III.E (capital-izations omitted) (emphasis added). The Notice of Proposed Rulemaking made similar statements with respect to its revisions to the “no-blocking” rule after Verizon. See id. at 5595 ¶ 95.

Verizon found the FCC’s proper Section 706 authority consistent with “the backdrop of the Commission’s long [regulatory] history.” See 740 F.3d at 638. That “backdrop” led Verizon to say: “Congress clearly contemplated that the Commission would continue regulating Internet providers in the manner it had previously.” Id. at 639. Before the President’s intervention in this Order and in light of Verizon, the Commission was going to do exactly that. But by reclassifying broadband Internet access as common carriage, “the circumstances” of this Order are “entirely different” from what Verizon considered. See id. at 638.

III.

The Order Here Lacks Congressional Authorization

The Order at issue gives FCC the authority to regulate “all users of public IP addresses,” or everything that connects to the Internet. See In the Matter of Protecting and Promoting the Open Internet *401(“Order”) ¶ 396 (Feb. 26, 2015). By 2020, according to the FCC Chairman, this could amount to 50 billion interconnected devices. See, e.g., Remarks of FCC Chairman Tom Wheeler, International Institute of Communications Annual Conference (Oct. 7, 2015), https://apps.fcc.gov/edocs_public/ attachmatch/DOC-335877A1.pdf. This vast power comes from two different, but related statutory reclassifications. First, the FCC reclassifies fixed broadband Internet access from an “information service” under Title I of the Act to a “telecommunications service” under Title II. Second, the FCC reclassifies mobile broadband service as an “interconnected service” with “the public switched network” under Title III.

Both reclassifications ensure.what the Court calls “consistent regulatory treatment” of mobile and fixed broadband Internet access. See Op. 724. By “consistent regulatory treatment,” the Court means the FCC can treat Internet access like monopolist railroads and telephone services — as a common carrier subject to public utility regulation. The innovation of modern technology now falls prey to the regulatory labyrinth smothering the old.

Subjecting all broadband Internet access to common carrier regulation lets FCC decide how to apply onerous requirements on Internet access. This authority covers all the ways in which Internet Service Providers conduct and run their respective businesses. The Order gives the FCC authority to determine, case-by-case, whether any activities “unreasonably interfere with or unreasonably disadvantage the ability of consumers to reach the Internet content, services, and applications of their choosing.” Order ¶ 135. FCC is empowered to assess the “reasonableness” of all rates, terms, and practices of Internet Service Providers. See, e.g., id. ¶¶ 441-52, 512, 522. The Order also includes an outright ban on several practices, including: “throttling,” or slowing Internet service down, id. ¶ 119; blocking access to certain Internet content; and on individualized negotiation of Internet access between content owners and Internet Service Providers (called “paid prioritization”), id. ¶ 125. Some practices are explicitly left for the FCC to address in the future, like not charging end customers for the data used by certain applications or Internet services (“zero rating”), and sponsored-data plans, id. ¶¶ 151-53. In short, the Order establishes the FCC’s long-term authority over Internet access.

The FCC’s unheralded assertion of power has already led some smaller Internet Service Providers to “cut[ ] back on investments [in broadband Internet access].” See Statement of FCC Commissioner Ajit Pai On New Evidence That President Obama’s Plan To Regulate The Internet Harms Small Businesses And Rural Broadband Deployment (May 7, 2015), http://go.usa. gov/3wAkn. I doubt they will be the last Providers to lessen their investments in Internet access, or to attempt navigating their business practices around FCC regulation. The Court’s Opinion is blasĂ© about grafting public utility regulation on to an innovative enterprise. See Op. 734. But, the conceit of regulatory capture is often fatal to growth, leading regulation to fail at its own aims by operating on only a pretense of knowledge. See F.A. Hayek, The Fatal Conceit: The Errors of Socialism 76 (W.W. Bartley, III ed. 1991) (“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”).

Reclassifying broadband Internet access so as to subject it to common carrier regulation upends the Act’s core distinction between “information service” and “telecommunications service,” and it rewrites the statutory prohibition on treating mobile broadband providers as common carri*402ers. Distinguishing “enhanced service,” like Internet access, from “basic services” subjected to public utility regulation is not some trivial matter, nor is it resolved simply by whether Congress authorized FCC to have some degree of regulatory authority over the Internet. Drawing this distinction is “the essential characteristic” of the 1996 Act. Cf. MCI Telecomms. Corp., 512 U.S. at 231, 114 S.Ct. 2223. “What we have here, in reality, is a fundamental revision of the statute, changing it from a scheme of’ common carrier regulation for telecommunications services, to common carrier regulation of information service when that service merely has telecommunications services among its component parts. Cf. id. “That may be a good idea, but it was not the idea Congress enacted into law in 19[96].” See id. at 232, 114 S.Ct. 2223. Therein lies the problem.

A.

The Major Question Of Reclassification Requires Clear Congressional Authority

One might be tempted to say turning Internet access into a public utility is obviously a “major question” of deep economic and political significance — any other conclusion would fail the straight-face test. But, the Court exhibits no such qualms. See Op. 704-05. Of course, the Opinion does not — and cannot — dispute the FCC’s Order implicates a “major question.” Indeed, the Court has already characterized “net neutrality” regulation as a “major question,” even without the distinct salience brought by implementing “net neutrality” through reclassifying broadband Internet access. See Verizon, 740 F.3d at 634 (“Before beginning our analysis, we think it important to emphasize that ... the question of net neutrality implicates serious policy questions, which have engaged lawmakers, regulators, businesses, and other members of the public for years.... Regardless of how serious the problem an administrative agency seeks to address, ... it may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.”). The problem here is the Court’s analysis — it ignores the legal consequences flowing from the “major question” determination.

As Chief Justice John Marshall recognized long ago, there is a difference b

Additional Information

United States Telecom Assoc. v. FCC [Order In Slip Opinion Format] | Law Study Group