‘Nuclear Option’ Effect on FCC Net Neutrality Fight Seen Uncertain

The D.C. Circuit is widely expected to overturn at least part of the FCC net neutrality order (WID Sept 10 p1). If that happens, the court’s strongly Democratic make-up could help the FCC if it asks the full court to rehear the case, said Stifel Nicolaus analysts Christopher King and David Kaut. The make-up “would give the FCC a better chance of success, though no guarantee, and of course the case could ultimately be appealed to the Supreme Court,” they wrote investors in an email.

"The partisan ties do not determine how judges will rule,” King and Kaut said at the end of their research note. “In fact, Judge [David] Tatel is a Democrat, and the three new Democratic appointees might be reluctant to overturn their colleagues. But we do think their presence could encourage an FCC en banc appeal of a reversal and increase its chances of success."

Most we spoke to didn’t think the Democratic majority would make a real difference, including Robert McDowell, who voted against the 2010 order as a commissioner. The nuclear option simply speeds the confirmation process up, said the Hudson Institute visiting fellow. An en banc appeal makes sense “if the commission is trying to buy itself more time to kick the can down the road,” he said: That way the agency wouldn’t have to address the issue while the appeal is ongoing. “If the [Tom] Wheeler FCC wants to keep moving the net neutrality question off of its immediate agenda, it will look for ways to further pursue appellate avenues,” either en banc and/or by petitioning for the Supreme Court to hear the case, said McDowell.

McDowell thinks the Supreme Court is unlikely to grant a petition for certiorari. Were the FCC to lose its pending court challenge, that would give it zero wins on net neutrality if you consider the Comcast BitTorrent case, he said. “If you're zero for two in one circuit with no split at the other circuits, that reduces the likelihood you're going to get your petition for cert granted.” It also reduces the likelihood that the U.S. solicitor general would file the appeal, he said. “They file for cases they think they're going to win.” The net neutrality rules were a “cornerstone” campaign promise by Obama, and McDowell would be “surprised if the FCC gives up” on them in the face of a loss. But it’s “certainly possible,” he said.

"I don’t think adding one or more new judges to the D.C. Circuit will change the result,” said telecom lawyer John Nakahata of Wiltshire Grannis. “Judge Tatel, a Democratic appointee, and Judge [Laurence] Silberman, a Republican appointee, were the most active questioners at the oral argument, and both questioned the nondiscrimination requirement for fixed ISPs. This does not appear to be an issue on which there is a partisan split in the courts."

Any change in the court’s composition won’t affect the decision of the three-judge panel, which is probably being written, said Randolph May, president of the Free State Foundation. As for an en banc appeal to the full court, “it is hard to argue that adding three new Obama-appointed judges might not ‘give the FCC a better chance of success,'” May said. “But assuming that the panel overturns all or part of the FCC’s order, I still don’t see the chances for an en banc appeal succeeding as very good. A very low percentage of en banc appeals are granted. And in this case, because the judges on the panel are from both parties, and span the philosophical spectrum, I think the chances of success are further diminished."

This isn’t about simple math or even politics, said Matt Wood, Free Press policy director. “It’s not safe to assume that the new judges will have any particular views -- let alone views based on party, or views different from those of the current circuit judges,” he said. “The analyst’s note itself admits at least one flaw in the thinking” when it said Tatel is a Democrat, and the three new Democratic appointees might be reluctant to overturn their colleagues, Wood said. During oral argument, Tatel suggested that FCC General Counsel Sean Lev had conflated the agency’s own theories, and didn’t defend the rules as they were actually written.

King and Kaut offered “a plausible, and perhaps even the most plausible, analysis,” said public interest lawyer Andrew Schwartzman. “Speculating on the outcome of an en banc petition challenging a decision that may never be written is even more tenuous” than the usual speculation about court decisions that are already hard to predict, he said.

The order depends on a “very imaginative reading” of Communications Act Section 706, said Richard Bennett, American Enterprise Institute visiting fellow. “Very few federal judges of any ideological stripe are going to read the law the way the FCC has, especially those newly appointed to the appeals court,” he said by email. “The Supreme Court remains the backstop for important, jurisdiction-expanding orders such as Open Internet, and it remains outside the scope of the new filibuster rule."

"The political makeup of the D.C. Circuit, or any other court for that matter, cannot easily be dismissed as a factor and perhaps it could into play in the net neutrality appeal,” said Medley Global analyst Jeffrey Silva. “At day’s end, though, court cases by definition tend to be decided on the law and its interpretation by judges based on the facts before them. I'm assuming this will be the case, regardless of the outcome, in the open-Internet appeal.”