Verizon Files Quick Appeal of FCC’s Net Neutrality Order

"In Comcast, this Court previously held that the FCC had failed to justify its exercise of authority over the broadband Internet access services at issue in that case,” the filing said. “In the Order on appeal here, the FCC responds to the Court’s decision and again attempts to justify its assertion of regulatory authority over broadband Internet access services.”

Verizon explains in a footnote that it’s filing before the order is published in the Federal Register based on its reading of the law, which requires an appeal of licensing and other adjudicatory decisions within 30 days of the actual release of an order by the commission. Verizon said it plans “in an abundance of caution” to file within 30 days of the order’s publication.

One big question remains whether other opponents of the net neutrality rule order will appeal in other circuits that might be more sympathetic to their side, said a government official. “That would result in a lottery among the appeals courts,” the official said. “The D.C. Circuit is probably more inclined to overturn the order.” NCTA isn’t planning to appeal the net neutrality order, a spokesman said.

The FCC could soon challenge the appeal on procedural grounds. The commission has a history of ensuring that appeals are filed properly, and it believes this one was not, because it was filed before the order appeared in the Federal Register, an FCC official said. The commission doesn’t think an appeal must be heard by the D.C. Circuit or by the panel of judges that heard the Comcast case, the official added.

Verizon said the D.C. Circuit has exclusive jurisdiction because the FCC order modifies wireless licenses to require compliance with the net neutrality rules. The appeal included the common allegation that the order is “arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act.” It also said the order exceeds the FCC’s statutory authority and violates the Constitution.

Republicans on the House Commerce Committee applauded the appeal. “We welcome the decision by Verizon, and hopefully others, to demand their day in court to block the FCC’s misguided attempt to regulate the Internet,” said a statement by Chairman Fred Upton, R-Mich., Communications Subcommittee Chairman Greg Walden, R-Ore., and Subcommittee Vice Chair Lee Terry, R-Neb. “At stake is not just innovation and economic growth, although those concerns are vital. Equally important is putting a check on an FCC that is acting beyond the authority granted to it by Congress. Between our legislative efforts and this court action, we will put the FCC back on firmer ground."

Baker Sees Appeal Success

Commissioner Meredith Baker thinks an appeal is “highly likely” to succeed, she said in a videotaped interview before Verizon said it sued the commission. The U.S. Court of Appeals for the District of Columbia Circuit is probably the “most expert” venue to hear a challenge, because it had a “quick turnaround” in the Comcast decision, Baker said on C-SPAN. That ruling came in April, after oral argument in January. In the end, “I don’t think it really makes a difference” which court hears an appeal, Baker said. Her office declined to comment on Verizon’s appeal.

"The legal case” supporting the FCC decision “is weak enough that it doesn’t matter where it goes,” Baker said in the interview, to air Saturday and Monday. “I think it will be” overturned, she added. “There is no place in our statute where Congress has given us authority over the Internet.” The FCC “exceeded our authority” in last month’s order, which Baker and McDowell voted against, she said. “There is no place in our statute where Congress has given us authority over the Internet,” and “I'm happy that Congress will continue to have these discussions and tell us what the proper role of the FCC is,” the Republican commissioner said.

"Verizon has consistently said net neutrality is a congressional -- not a regulatory -- concern,” so an appeal by company isn’t surprising, said analyst Paul Glenchur of Potomac Research Group. “The more immediate question is whether net neutrality advocates can get the appeal heard in a more friendly appellate court, an effort that would require them to appeal the rules as arbitrarily or unreasonably weak. The Title I approach is likely to get a chilly reception in the D.C. Circuit.” Paul Gallant of MF Global sees the Verizon appeal as “probably the beginning of a multi-year court fight,” he said. “That Verizon is the plaintiff does add a bit of gravity to the challenge in the eyes of the court.”

Verizon has “concocted a very bizarre theory that this is an ‘appeal’ over which the D.C. Circuit has exclusive jurisdiction because it ‘modified’ its licenses,” said Senior Vice President Andrew Schwartzman of the Media Access Project, a net neutrality rule proponent. “This is a blatant effort to locate their challenge in a favorable forum. Under Verizon’s bizarre theory, all agency actions changing rules are ‘modifications’ of hundreds of thousands of licenses."

"Verizon’s decision demonstrates that even the most weak and watered-down rules aren’t enough to appease giant phone companies,” said Policy Counsel Aparna Sridhar of Free Press, also a net neutrality supported. “It’s ironic that Verizon is unhappy with rules that were written to placate it, and it’s now clear that it will settle for nothing less than total deregulation and a toothless FCC in the relentless pursuit of profit.”

House Oversight Subcommittee Chairman Cliff Stearns, R-Fla., gave more details earlier Thursday on how the House Commerce Committee plans to proceed with its own review of the net neutrality order. The subcommittee will be first to call in the five commissioners for a hearing on net neutrality, Stearns told reporters after a speech at the Minority Media and Telecommunications Council conference. The net neutrality hearing will happen the second week of February, Stearns said. If it comes out in that hearing that there are “certain areas the FCC is not complying with,” Stearns’s subcommittee would step in, he said. If the commission “is not doing things they should, then I would investigate,” he said.

If necessary, the Communications Subcommittee would adopt legislation to scale back FCC authority to make rules for the Internet, Stearns said. Stearns has one bill (HR-166), and Rep. Marsha Blackburn, R-Tenn., has another (HR-96). Stearns is a co-sponsor on Blackburn’s bill because he supports “anything we can do to put Congress in the driver’s seat for net neutrality rather than the FCC,” he said.

Full Committee Ranking Member Henry Waxman, D-Calif., said he plans to defend the FCC net neutrality order against the GOP’s assault. “We're certainly going to be there and I do support net neutrality and the FCC’s action, and I will express my views on that,” Waxman told us after the committee’s organizational meeting. Two other senior Democrats on the committee said they remain undecided on how they'll respond. Rep. John Dingell, D-Mich., is waiting to see what Republicans do, he said in an interview. “Republicans have concerns, I always have concerns.” After speaking at the MMTC conference, Rep. Bobby Rush, D-Ill., told reporters he’s also waiting for the GOP to act: “I'm not sure what they're going to do.”