Texas WISP, USTelecom File First Challenges to FCC Net Neutrality Rules

Alamo filed its appeal in the New Orleans-based 5th U.S. Circuit Court of Appeals, which includes Texas. The WISP asked the 5th Circuit to enjoin and set aside the order. The order is “in excess of the Commission’s authority” and arbitrary and capricious and “an abuse of discretion with the meaning of the Administrative Procedure Act,” Alamo said. Alamo said the order is “contrary to constitutional right” and “otherwise contrary to law.” The WISP is being represented by Wiley Rein.

USTelecom filed in the U.S. Court of Appeals for the D.C. Circuit. “As we have said throughout this debate, our member companies conduct their business in conformance with the open Internet principles, support their enactment into law, and a regulatory approach that relies upon Section 706 authority of the Communications Act," USTelecom President Walter McCormick said in a statement. "However, we do not believe the Federal Communications Commission’s move to utility-style regulation invoking Title II authority is legally sustainable. Therefore, we are filing a petition to protect our procedural rights in challenging the recently adopted open Internet order.”

“We believe that the petitions for review filed today are premature and subject to dismissal,’’ an FCC spokesman said in response. Under Section 1.4 of commission rules, the 60-day period to challenge the open Internet order runs from the order’s publication in the Federal Register, which has not yet occurred, an agency official said, adding that both petitions acknowledge that the petitions are likely premature. One petitioner described the filing as “protective,” while the other said it was being filed “in an abundance of caution,” the official said.

“There is no downside in filing,” said Andrew Schwartzman, senior counsel at the Georgetown Law Institute for Public Representation. “The worst that can happen is that it is dismissed as premature. Whoever files will also file a petition for review after Federal Register publication, so they'll be covered.” Schwartzman coordinated various appeals to the 2010 order.

“It certainly sounds like a plausible argument,” said Berin Szoka, president of TechFreedom. "When it comes to court filings, it’s better to be safe than sorry,” said Fred Campbell, director of the Center for Boundless Innovation in Technology. “You don’t want to give a court an excuse to dismiss a thorny issue on procedural grounds."

"It's no surprise to see some broadband providers filing early on this theory,” said Free Press Policy Director Matt Wood. “No matter when and where they file, they'll have to deal with the fact that Title II is the law that applies to two-way communications services like broadband Internet access.” Congress updated Title II “on an overwhelmingly bipartisan basis in 1996 to preserve the timeless nondiscrimination principles we still need for these networks,” he said. “The FCC's return to that law, and its light-touch use of it here, is the agency's strongest argument to date -- and it's a rock-solid basis for the open Internet rules adopted last month."

The phrase “unintended consequences” comes to mind,” said Alamo President Joe Portman at an Oct. 21 net neutrality forum organized by Commissioner Ajit Pai (see 1410220025). He said small companies “simply cannot bear the cost of preparing” more in-depth filings, a change he thought would come with reclassification. “Our staff is pretty busy just dealing with the loads we already carry,” said Portman. He couldn’t assess the financial risk of reclassification, and “investors can’t quantify the risk. This raises a barrier to small businesses seeking capital and stifles growth,” he said. “If it ain’t broke don’t fix it. … Title II and the more onerous and costly regulations will work against the goals of encouraging broadband deployment to all Americans. We are not common carriers and we don’t operate as common carriers. We don’t need to be regulated as common carriers.”

Industry attorneys speculated Monday that an appeal might come from industry groups opposing reclassification or Title II supporters hoping to rid forbearance provisions. Public interest groups including Common Cause, Free Press, the New America Foundation’s Open Technology Institute and Public Knowledge said they didn't file any challenges. The American Cable Association and NCTA also said they didn't file challenges. In the backdrop was the strategy of filing an appeal in a friendly circuit, hoping to be part of a lottery to determine what circuit might hear all the appeals.

After the 2010 order was released, MetroPCS and Verizon filed challenges in the D.C. Circuit based on the legal theory that the law requires an appeal of licensing and other adjudicatory decisions within 30 days of the actual release of an order by the commission, rather than publication in the Federal Register (see 1101210076). The court ruled in April 2011 that the challenges were premature (see 1104050084).

Eventually, Verizon refiled its challenge after the order was published in the Federal Register in September 2011 and its appeal was the main one eventually heard by the D.C. Circuit (see 1109200075), leading to last year’s decision rejecting most parts of the 2010 rules. This time around, industry officials predict major associations may end up filing the key challenges, especially since AT&T and Comcast each have major transactions pending before the FCC (see 1503030059).

Campbell said FCC net neutrality rules are at odds with reality. “There are now two Internets. The Internet envisioned by the ideology embodied in the FCC’s new net neutrality rules, and the Internet as it exists in reality,” Campbell wrote in a blog post Monday. “The ‘net neutral’ Internet is ‘a garden of pure ideology’ where content companies ‘are one people ... with one cause’ and network congestion is merely a figment of the imagination. The real Internet is different -- congestion is commonplace and the interests of content owners are divergent.”