Could Take Years Before Industry Has Certainty on Net Neutrality Order

"The circuit court appeal could take two years, or even longer,” said former FCC Commissioner Robert McDowell, now at Wiley Rein. “The length of time for the 2010 order appeal to get started was an anomaly due to Paperwork Reduction Act delays. That took 37 months in total. Add a likely Supreme Court appeal, and it could be four years from now before it is all settled.”

“Few should be surprised that the incumbents will sue as they always do … or that the FCC has a lengthy process, from publishing an NPRM dutifully last May all the way through a court date at an uncertain time in the future,” said Matt Wood, Free Press policy director.

FCC Chairman Tom Wheeler has indicated he wants to release the rules as quickly as possible (see 1502260043). Industry officials said they're hearing release of the written order could take several weeks, probably close to the next FCC meeting on March 26. Commissioner Ajit Pai filed a lengthy, detailed dissent, one industry official said, and the commission will need time to address that and other objections to the order. Pai and Commissioner Mike O’Rielly submitted their dissents for the record Monday, FCC officials said Tuesday.

Release of the order is only a first step. It must next be readied for public review in the Federal Register. Former FCC officials said agency staff usually only starts writing the summary of the order for the Federal Register after it's released. The summary must then be reviewed inside the FCC and rewritten by a staffer who specializes in the language of a Federal Register article.

The commission approved the 2010 order in December of that year, but it wasn't published in the Federal Register until the end of September the following year (see 1109200075). Industry and agency officials say such a long delay isn't likely this time. Only the enhanced transparency requirements in the new order will require Office of Management and Budget review and the FCC won't wait for that review to be complete before it publishes the rest of the order, an FCC official said.

Timing Out of FCC's Hands

Once the order is published, the court fight begins and the timing is no longer under the FCC’s control. Anyone challenging the order has 60 days after publication to file a challenge, but only those filed within the first 10 days have an effect on which circuit court hears the case, an important consideration since lawyers for both sides will seek review in what they see as a friendly circuit, industry officials said.

In the case of the 2010 order, Verizon brought its challenge in the U.S. Court of Appeals for the D.C. Circuit and Free Press sought judicial review in the 1st U.S. Circuit Court of Appeals in Boston. Media Access Project, which has since folded, sought review on behalf of four clients in four additional circuits (see 1110060075). After the appeal window closes, the FCC will have to ask the Judicial Conference of the United States to hold a lottery to determine which court hears the case.

Last time around, the D.C. circuit was picked to hear the case in an October 2011 lottery (see 1110070106), but oral argument wasn't heard until September 2013 and the court didn’t rule until Jan. 14, 2014, more than three years after the FCC approved the order on a contentious 3-2 vote.

“The key is that Title II is the law, and the FCC is following that law again at last and working through its processes,” Wood said. “Title II gives the agency not only the best chance to win in court, but of course the best authority to prevent discrimination, protect broadband users, and promote choice."

Tumultuous Process Ahead

McDowell said which court will hear the order remains unclear. “Different attorneys have a variety of theories on how the whole thing will unfold,” he said. “But it will be tumultuous for sure."

The earliest an appeals court will issue a decision is next May or June, predicted Berin Szoka, president of TechFreedom. “But the case could well drag out past the election and there's a good chance the decision might not even come out before the next president takes office,” he said. Even if an appellate decision does come out in May or June of 2016, the Supreme Court is unlikely to decide the case until June 2017. “So either way, this issue is really up to the next administration and Congress,” he said. “The more unsure Democrats are about the outcome of either the case or the election, the more likely it is that enough Democrats would sign onto a legislative compromise.” Senate Commerce Chairman John Thune, R-S.D., “only needs six Democrats to get a bill out of the Senate and onto the president's desk,” Szoka said.

One of the more interesting questions is whether ISPs seek a quick stay, said Paul Gallant, analyst at Guggenheim Partners. “If they do, the outcome might suggest where the court is ultimately headed,” he said. “And a stay would have implications for net neutrality legislation. So a stay request by the carriers could really pull forward a lot of the net neutrality drama.”

FCC General Counsel Jon Sallet said in a Monday blog post that release of the order will take time, with the three commissioners who voted for it having to sign off on the final version. “Until this is done, the Order is not public because it doesn’t fully reflect the full and final views of the Commission,” he wrote. Sallet said the FCC will release the order as soon as possible. “But speed is not the only -- or even the utmost -- goal,” he said. “The rulemaking process of the FCC was designed by Congress, and is executed by the Commission, to produce rules that will stand the test of judicial review -- and of time.”