Scalia's Death Seen Potentially Slowing Net Neutrality Review, Affecting Outcome

In a 2005 dissent, Scalia said cable broadband in effect was a telecom service subject to common-carrier regulation under Title II, as amended by the Telecom Act. He also upheld broad deference to the FCC in a 2013 majority opinion. “Scalia was clearly our best friend on broadband reclassification,” said Georgetown University Law Center Institute for Public Representation senior counselor Andrew Schwartzman, who backs the FCC 2015 net neutrality order but isn’t convinced the case will get to the Supreme Court. Guggenheim Partners telecom analyst Paul Gallant said, “Ironically, the loss of a pro-business conservative might be good for the cable and phone companies. Scalia indicated Title II was the best interpretation of what broadband is, so his absence complicates the outlook a bit for the FCC.”

It’s unclear how Scalia would have voted in the current FCC net neutrality case, said TechFreedom President Berin Szoka. Acknowledging the earlier cases, he said Scalia was in a “period of transition” in which he was growing less tolerant of regulatory decisions that dramatically affected major sectors without clear statutory grounding. “How Scalia would have voted in this case would depend on which Scalia you got,” he said. The outcome could depend on his replacement, Szoka said. Republicans have vowed to block any nominee of President Barack Obama, and said the next president should fill Scalia’s seat. “If a Democrat wins [the White House], we’re probably screwed” if net neutrality reaches the high court, said Szoka.

Szoka said Scalia’s death could slow the timeline of the net neutrality case, which is before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit. He said it’s more likely either or both sides will appeal a substantive defeat en banc to the full slate of D.C. Circuit active judges, instead of immediately seeking Supreme Court review. He said Scalia's replacement is unlikely to be confirmed before spring 2017, leaving only eight justices for some period and increasing the chances of a 4-4 court split on Title II broadband reclassification if the case comes before the high court soon. Such a ruling would let stand a lower court ruling.

Schwartzman noted a particular complication for D.C. Circuit Judge Sri Srinivasan, speculated to be on the short list of Obama's possible nominees to replace Scalia. Srinivasan is on the panel that's reviewing the current net neutrality case. If Srinivasan were confirmed as a justice and the case came before the high court, he would have to recuse himself, Schwartzman said. Szoka said if Srinivasan sides with the FCC on the current case, it would only further harden Republican opposition to him as a nominee if he's chosen.

Scalia dissented from the court’s 2005 Brand X decision upholding a Republican FCC’s classification of cable modem service as a Title I information service, calling it “an implausible reading” of the law. He said the commission’s decision wasn't entitled to deference under the law’s definition of a telecom service as “the offering of telecommunications for a fee directly to the public,” which triggered Title II common-carrier regulation. “After all is said and done, after all the regulatory cant has been translated, and the smoke of agency expertise blown away, it remains perfectly clear that someone who sells cable-modem service is ‘offering’ telecommunications,” he wrote. For that reason, he would have affirmed a 9th Circuit ruling overturning the FCC’s decision.

Scalia “almost certainly preferred the less regulatory result, but thought the statute compelled a contrary outcome,” said Harris Wiltshire attorney Chris Wright, who backs the FCC's current net neutrality order. Telco and cable petitioners have said the 2005 case was about broadband's "last mile," while the current case has broader Internet implications.

Scalia upheld the FCC ability to interpret the scope of regulatory authority under the court’s Chevron precedent for determining judicial deference to regulatory agencies. “Those who assert that applying Chevron to 'jurisdic­tional' interpretations ‘leaves the fox in charge of the henhouse’ overlook the reality that a separate category of 'jurisdictional' interpretations does not exist,” he wrote in the 2013 majority opinion on City of Arlington, Texas. He said the fox-in-­the-henhouse scenario could be avoided by rigorously applying statutory limits on agency authority in all cases: “Where Congress has estab­lished a clear line, the agency cannot go beyond it; and where Congress has established an ambiguous line, the agency can go no further than the ambiguity will fairly allow.” In that opinion, Scalia even discussed the nuances of a hypothetical Common Carrier Act and rules affecting ISPs.

Scalia also wrote the opinion that largely upheld a Democratic FCC’s broad assertion of jurisdiction to implement the 1996 Telecom Act’s local competition provisions, including by imposing a wholesale cost methodology on state regulators. “The FCC’s interpretation is not only reasonable, it is the most readily apparent,” he wrote in Iowa Utilities Board in 1999. “It would be gross understatement to say that the Telecommunications Act of 1996 is not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.”

Schwartzman said Scalia took “an idiosyncratic approach” that evolved somewhat. He generally supported Chevron deference for the FCC and other agencies when there’s ambiguity in the statute. “But as his dissent in Brand X demonstrated, he tended to seek answers, and in that case he said [broadband] is a telecom service,” Schwartzman said.

Scalia was interested in telecom policy going back his days as general counsel of the Office of Telecommunications Policy in the Nixon White House, said Goldberg Godles tech lawyer Henry Goldberg, who worked under Scalia at OTP. Scalia believed in relying more on the market than on regulation. But when court review and telecom philosophy intersected, Scalia often gave deference to the agency, Goldberg said. “You don’t substitute your judgment for the regulatory agencies. Congress gave them the task of regulating the communications industry. Why upset that?”

Schwartzman said the OTP “was an extremely influential operation which advocated some very foresighted policies, and had a huge impact -- I would say even a net positive impact -- on telecommunications.” NTIA now does what OTP did.

“Scalia was a real giant in the law,” said former FCC Chairman Richard Wiley of Wiley Rein, who knew Scalia at OTP and played tennis with him. “In communications, he was always going to be interesting." The last time Wiley talked to Scalia was in December, said Wiley: “He was his usual jovial self.”