‘Big Dogs’ Want Rehearing on Net Neutrality

(CN) — Industry groups urged the D.C. Circuit to hold an en banc rehearing on recently upheld net-neutrality rules allowing greater federal regulation of internet providers.

It was a divided three-judge panel of the federal appeals court who found this past June that the Federal Communications Commission has the power to classify broadband as a telecommunications service, like telephone or another utility, thereby granting the agency regulatory authority.

"Nothing about affording indiscriminate access to internet content suggests that the broadband provider agrees with the content an end user happens to access," Judges David Tatel and Sri Srinivasan said, in a 115-page, rare dual-authored opinion. "Because a broadband provider does not - and is not understood by users to — 'speak' when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules."

The Federal Communications Commission approved the reclassification of ISPs as common carriers, subject to FCC regulation, last year.

It imposed three "bright line" rules: no blocking of access to legal content, no throttling of internet traffic and no paid prioritization favoring some websites over others.

Though commission's first stab at net neutrality was less successful — suffering under its 2002 classification of broadband internet as an "information service," rather than as a "common carrier" like a phone company or other utility, except as to the extent it is involved in telecommunications.

After the D.C. Circuit struck those initial rules down, the FCC reclassified broadband service last year as a telecommunications service via the 2015 Open Internet Order, making the service subject to common carrier regulation under Title II of the Communications Act.

Two industry groups petitioned the D.C. Circuit on Friday for a rehearing before the full court.

In a statement, FCC Chairman Tom Wheeler called it "no surprise that the big dogs have challenged the three-judge panel's decision."

The National Cable & Telecommunications Association and the American Cable Association brought the petition, accusing the FCC of leaving out the "hundreds of thousands of companies, organizations, and individuals [that] participated in some manner in the rulemaking proceeding."

The 16-page petition accuses the D.C. Circuit panel majority of upholding the FCC's order despite "multiple textbook" violations of the Administrative Procedure Act.

"Its refusal to correct the FCC's failures will invite that agency and others to defy those constraints in the future," the petition states, signed by Gibson, Dunn & Crutcher attorney Miguel Estrada

The industry groups say Supreme Court precedent requires the agency to offer a reasoned explanation for reclassifying broadband services.

Citing the partial dissent in June by Judge Stephen Williams, the groups called the FCC's justifications for the policy change "watery thin and self-contradictory."

ISPs invested billions of dollars on the Internet in good faith, according to the petition, because they relied on the FCC's history of a "light-touch approach."

The industry notes that every previous effort to impose greater regulation had been struck down, and that the panel ruling did not "identify any benefit that could possibly justify upsetting the massive reliance the FCC refused to acknowledge."

"The panel blessed the FCC's bait-and-switch," according to the petition, "reasoning that the NPRM [notice of proposed rulemaking] put all of these issues in play by asking abstract questions (confined to a few paragraphs of a 99-page notice) that amounted to 'Should we reclassify? Why or why not?' That ruling is at war with case law and common sense."

The FCC's Wheeler said his agency is "confident that the full court will agree with the panel's affirmation of the FCC's clear authority to enact its strong Open Internet rules, the reasoned decision-making upon which they are based, and the adequacy of the record from which they were developed."

Walter McCormick, the president of United States Telecom Association, said that a rehearing is necessary because the June ruling failed to recognize the FCC's legal failings and abide by Supreme Court precedent.

"USTelecom has asked for an en banc review to help ensure that the FCC does not give itself authority — which Congress has not granted — to impose heavy-handed regulation on internet access," McCormick said in an email.

Before filing their petition, the petitioners issued a joint statement Monday that urging the FCC to bend to a "growing consensus" that greater regulation of ISPs is not in the public's best interest.

"There is still time for the FCC to listen to the experts and heed the warnings it has been given — and for the sake of everyone who engages with or depends upon the internet, we hope it does just that," the statement says.

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