FCC Backers See Net Neutrality Appeal as Uphill; Some Disagree, Cite Chevron

It's "unlikely" that the D.C. Circuit or Supreme Court would overturn the panel's ruling, said Steptoe & Johnson telecom lawyer Pantelis Michalopoulos, who represented Dish Network, Incompas, Level 3 and Netflix in backing the order. "Neither of those options are attractive." Public Knowledge Senior Staff Attorney John Bergmayer called a Supreme Court appeal's prospects "generally difficult." One experienced appellate attorney who backs the order was even more confident.

But some FCC critics were more hopeful the high court would at least grant certiorari and hear an appeal, and they suggested concerns about Chevron judicial deference to agencies could be one hook for justices. "The [panel's] disposition of some of the petitioners' arguments was so cursory that the prospects for Supreme Court review are better than even, especially given the overall importance of the case," emailed Free State Foundation President Randolph May. "The administrative law points, such as [Administrative Procedure Act] notice requirements and the applicability of Chevron deference, might prove attractive cert targets.”

Petitioners who challenged the order at the D.C. Circuit were generally not commenting beyond the statements they put out Tuesday. The American Cable Association and AT&T said they expected to appeal the ruling, while others said only that they were reviewing their options, a stance repeated by some petitioners Wednesday. AT&T suggested it could join a Supreme Court appeal, but Berin Szoka, president of intervenor TechFreedom, said his group and others would first seek en banc D.C. Circuit review.

Szoka said many are missing three big points about the ruling. "The decision gives the FCC staggering discretion to regulate," he emailed. "The decision gives the FCC staggering discretion to forbear, without conducting any real competition analysis. This means a Republican FCC could gut the entire Act. And the FCC's rationale for reclassifying mobile broadband lays all the necessary foundation for the FCC to reclassify edge services, too, starting with all voice and video communication.”

Timing

The FCC critics have 45 days from Tuesday's judgment to seek rehearing from the D.C. Circuit, according to the court's procedural handbook. A majority of the court's active judges would have to agree to an en banc rehearing request for there to be further review. Chief Judge Merrick Garland, who has been nominated to the Supreme Court, isn't hearing cases. That leaves 10 active judges, six of whom are Democratic appointees, including David Tatel and Sri Srinivasan, who wrote the majority opinion in Tuesday's net neutrality ruling. There are also six senior judges, five of whom are Republican appointees, including Stephen Williams, who was also on the panel and partially dissented. Because he was on the panel, he could participate in an en banc review if it's granted, according to the handbook.

Rehearings are "rarely granted," according to the handbook. Michalopoulos said there's even more reason to believe it wouldn't be granted in this case. "I believe Judge Tatel is viewed within the D.C. Circuit as very authoritative on this issue. He has not spared the agency on this issue in the past, and now he has agreed with it. So I find it unlikely the court will suspend their belief in his authoritative stature to grant rehearing," said Michalopoulos, saying Tatel wrote a 2010 Comcast opinion that struck down an FCC net neutrality order and a 2014 Verizon opinion that struck down some net neutrality rules. "He has a lot of legitimacy and bona fides.”

Another FCC supporter said it didn't make much sense for telco and cable petitioners to seek en banc D.C. Circuit review. The lawyer said the court rehears only two or three cases annually. The attorney did say there could be a tactical reason for seeking en banc D.C. review: to play for time in the hope that Republican Donald Trump would win the presidential election and be able to fill at least one Supreme Court slot with a skeptic of FCC regulation.

If en banc D.C. Circuit review isn't sought, parties would have 90 days from Tuesday -- or until mid-September -- to file appeals at the Supreme Court, said Andrew Schwartzman, Georgetown Law Institute for Public Representation senior counselor. He said that could yield a Supreme Court decision on whether to grant cert by the end of the year, which would allow for a decision by June 2017.

High Court, Low Odds

FCC supporters said the odds are long the high court would grant cert. They note the absence of a split among circuit courts on the issues in question at present. They say the litigation looks more like a garden-variety case of administrative law and statutory construction that justices shy away from. Michalopoulos was also skeptical the court would agree to hear the case on First Amendment free-speech grounds, which some FCC critics have cited as cert worthy. "That would be a quite-out-of-left-field way for the court to grant cert," he said.

That Williams' dissent was "limited" also undercuts the appellate chances, Schwartzman said. "Notably, Judge Williams agreed with the most important issue in the case, which is whether the FCC has statutory authority to reclassify broadband as a common carrier," he said. "His primary disagreement was as to the FCC’s application of the facts to the issues at hand. Much of his dissent addresses whether the FCC needed to consider if ISPs have market power; this relates to a longstanding ideological dispute within the judiciary as to which Judge Williams’ side has not prevailed. Given the nature of this opinion and Judge Williams’ concurrence as to the reclassification issue, the likelihood that the Supreme Court will agree to hear this case is remote.”

But May said the Supreme Court could still be enticed. "Several justices have said they want to reexamine the extent of Chevron's reach and the way it is applied," he said. "This case presents a good opportunity to do so. And many people forget -- or never knew -- that Justice [Antonin] Scalia was the Court's foremost defender of Chevron deference. He's gone." Cable consultant Steve Effros agreed the high court may want to look at the Chevron deference issue to more pressure on Congress to legislate. By granting the FCC and other agencies broad deference so often, the courts are letting lawmakers off the hook on the need to update the law, he said.

The policy outcome will be decided by the upcoming election, said Brookings Institution Nonresident Senior Fellow Blair Levin. He said the next president gets the right to name the FCC's chairman and control the commission with a majority. Bergmayer also made a political point. "If I were on the other side, I would be amping up Congress and looking to the FCC," not appealing, he said. "The broadband industry always says they want certainty and now we have certainty. We have a fairly clear opinion. It's not some convoluted mess.”