Net Neutrality Rules Likely to Take Effect Before One-Year Anniversary of Approval

The FCC on Friday sent net neutrality rules to the Federal Register where they're expected to be published over the next one to three weeks, an agency official said. The rules take effect 60 days after publication. Supporters of the rules concede they're concerned they will be overturned since the FCC decided not to reclassify broadband as a Title II service, relying instead on its authority under Title I of the Communications Act.

Verizon Wireless and MetroPCS filed legal challenges to the rules in January, arguing that they were licensing decisions subject to immediate review by the Court of Appeals for the D.C. Circuit (CD Jan 26 p3). The D.C. court rejected this argument, telling the companies they had to wait for Federal Register publication. Both said they planned challenges regardless of when they could be filed. Other challenges, including by such net neutrality proponents as Free Press, are also possible (CD March 10 p5).

"There are likely to be a number of procedural questions which will arise shortly after the litigation begins,” said Andrew Schwartzman, senior vice president of the Media Access Project. “In particular, Verizon will almost certainly renew its claim that this is an ‘appeal’ of a licensing decision rather than a ‘review’ of a rulemaking decision.” Another key question is whether one of the ISPs seeks a stay of the rules, he said.

"The standard for obtaining a stay is very high, but if a stay is granted, it generally indicates that there is a high likelihood of reversal,” Schwartzman said. “Assuming no stay is granted, you can expect briefing and argument to take many months. The case would probably proceed more quickly if a stay were granted.” MAP continues to believe the FCC should have sought to reclassify broadband as a Title II, he said: “This will be a close case."

"I expect these rules to be legally challenged the same day they are published,” said Sascha Meinrath, director of the New America Foundation’s Open Technology Initiative. “Unfortunately, through its own convoluted legal contortions, the FCC has left itself on incredibly shaky ground to defend itself."

Free Press Policy Director Matt Wood said the group is pleased the rules will finally take effect, but continues to believe the FCC didn’t go far enough. “As we've said all along, the rules passed in December are riddled with loopholes,” Wood said. “They don’t do enough to stop the phone and cable companies from dividing the Internet into fast and slow lanes, and they fail to protect wireless users from discrimination that is already occurring in the marketplace and that will only get worse. Even in their watered-down form, the rules might do some good -- but that would require a vigilant FCC to carefully monitor and address complaints. This Commission’s track record suggests that it isn’t inclined to take decisive action to protect consumers."

Uncertainty will continue as the D.C. Circuit, or possibly another circuit, takes up various appeals, said Public Knowledge Legal Director Harold Feld. “I would expect those opposed to the rules to request a stay as a matter of general strategy and the need to adjudicate a stay motion may complicate the venue argument,” Feld said. “In the normal course of events, however, I would expect things to remain quiet while this works through the courts. Parties may file complaints once the rules go into effect, but I would not expect the FCC to make much progress until a court resolves the underlying question of the validity of the rules. On the other hand, if an ISP engaged in a clear violation of the rules, the FCC might well be prepared to take action. The bottom line is that it is very hard to predict what happens while the court works this out, and that it may take a while for courts to work out the procedural issues of who has jurisdiction."

"There is a better than 50-50 chance the rules will be struck down in court,” predicted Randolph May, president of the Free State Foundation. “Whether or not they are, as a matter of policy the net neutrality proceeding was misguided. In the nine months since the FCC acted, there is still no evidence of market failure that warrants common carrier-like regulation of Internet providers."

NetCompetition Chairman Scott Cleland said 2011 has not been a good year from the standpoint of net neutrality proponents. Cleland sees “incongruity” between the FCC’s rush to get rules approved last year and its “lackadaisical” tack in getting the rules published. “The President issued two executive orders against burdensome regulations; the House rejected and defunded the FCC’s net neutrality rules; and the stalling of the economy has made it much more likely that at least four Democratic Senators up for re-election will vote this fall with Republicans to create a majority in the Senate to reject and/or defund implementation of the FCC’s burdensome and unnecessary net neutrality rules,” Cleland said Monday.

The rules’ imminent publication means “we are one step closer to review of these job-crushing regulations by the Senate and the courts,” House Commerce Committee Chairman Fred Upton, R-Mich., said Monday. The House rejected the rules earlier this year when it passed a joint resolution of disapproval (HJ Res 37) under the Congressional Review Act. Senate Republicans introduced a resolution (SJ Res 6) but have been waiting to move it forward until the FCC order’s publication in the Federal Register.

"The Internet is open and thriving precisely because we have refrained from regulating it,” Upton said. “Imposing these rules will cause more harm than good by chilling the very investment and innovation we need to ensure the Internet keeps pace with growing demands. I'm disappointed that less than two weeks after President [Barack] Obama touted a pro-jobs agenda, the Administration is moving forward with regulations that only further hurt our economy.”

Seton Motley, president of Less Government, said he hopes the rules never take effect. Motley noted that 47 senators appear to be on board with the move there to reject the rules under the Congressional Review Act. “That means you only have to pick up four Democrats among the field of 23 who are up for reelection next year, a lot of them in states that aren’t … very cozy with big regulation.” If the Senate acts, Obama will have to decide whether to sign the bill, Motley said: “He’s been pitching a lot of woo about getting rid of unnecessary regulations.”