Private: Net Neutrality and Regulatory Flexibility under Title II of the Communications Act

by Erik Stallman, Director of the Open Internet Project and General Counsel at the Center for Democracy and Technology

*This post is part of ACSblog’s symposium on the FCC’s net neutrality rules.

Depending on one’s perspective, the Open Internet Order’s reclassification of broadband Internet access service as a telecommunications service under Title II of the Communications Act – giving the FCC clear rulemaking authority with respect to that service – was either unavoidable or unthinkable. What the history leading up to that reclassification shows is not a power-mad Commission looking to “regulate the Internet,” but a Commission left with few other options to protect an open Internet that has become increasingly important to all Americans.  What the future hopefully will show is that reclassification is the best option, not only in terms of legal defensibility, but also in terms of accommodating and fostering continued evolution in Internet technology and uses.

In part, the FCC’s reclassification of broadband as a Title II telecommunications service responded to the limited or illusory nature of alternative sources of authority for net neutrality rules. When the Supreme Court’s 2005 decision in NCTA v. Brand X affirmed the FCC’s classification of cable broadband as an “information service” not subject to the FCC’s plenary authority, the Court suggested that “the Commission remains free to impose special regulatory duties on facilities-based ISPs under its Title I ancillary jurisdiction.” That sounded good — until the FCC tried it. In the Comcast-BitTorrent case, the FCC sought to rely on ancillary jurisdiction and policy statements to sanction an ISP for degrading peer-to-peer traffic. In 2010, the D.C. Circuit Court of Appeals held in Comcast v. FCC that this would not do because “[a]lthough policy statements may illuminate [statutory] authority, it is Title II, III, or VI to which the authority must ultimately be ancillary.”

Many observers viewed reclassification of broadband as a Title II telecommunications service as the logical next step following the Comcast decision, but it took one more rulemaking and one more unsuccessful trip to the D.C. Circuit to take the remaining options off the table. The Verizon v. FCC decision in 2014 vacated the FCC's 2010 Open Internet Order on the ground that the FCC had once again exceeded its cited authority – this time Section 706 of the Telecommunications Act – by imposing common carriage rules on ISPs (such as no blocking or no throttling of Internet traffic) without reclassifying broadband as a Title II common carrier service. Back to the drawing board. 

Title II reclassification may not have been Chairman Wheeler’s first choice after the Verizon decision came down. The Notice of Proposed Rulemaking following Verizon suggested remaining in the confines of the FCC’s Section 706 authority to prevent “commercially unreasonable” practices, but also sought comment on other approaches including Title II reclassification. Then Wheeler did something that very good regulators do: he listened. And what he heard was a steadily building crescendo of voices demanding clear rules against blocking, throttling, and paid prioritization, and a legal foundation for those rules that could withstand near-certain legal challenge. In other words, a foundation based on reclassification of broadband Internet access as a Title II telecommunications service.

As the Title II approach took shape, opponents increasingly suggested that the problem was as much the regulator as the regulation. But, there too, the alternatives come with their own problems.  First, some have suggested that the entire job of protecting an open Internet should be handed over to the Federal Trade Commission, which could act under its Section 5 authority to prevent unfair methods of competition or unfair and deceptive trade practices.  The chief problem with this proposed solution is the FTC’s lack of general rulemaking authority under the Administrative Procedure Act. Thus, it would be exceedingly difficult to put in a place a rule against blocking or throttling content. At best, the FTC could hear complaints that a particular instance of blocking or throttling amounted to unfair competition or was otherwise deceptive or unfair. This would provide no assurance to the various constituencies of the Internet ecosystem that the open Internet would be protected unless such protection fulfills a separate purpose of the FTC Act. The FTC is simply not empowered to say “Americans demand an Internet free of gatekeeper control, so we are going to promulgate rules to protect the open Internet.” 

The other proposed solution is legislation. Understandably, this solution is very popular with some legislators. One of the chief selling points of a legislative alternative to net neutrality rules is its relative permanence: a subsequent slate of agency commissioners cannot undo a statute and even a later Congress would find amendment or repeal challenging. However, given that technology moves more quickly than regulation, such relative permanence may be more flaw than feature. Laws written with a particular technology in mind can, at times, inhibit the evolution of that technology. For example, much of the opposition to the Stop Online Piracy Act flowed from its unintended interference with ongoing efforts to protect the security of Internet domain name resolution. Such obstacles appearing in statutes are much harder to modify or remove than if they appear in administrative rules.

Compared to these alternatives, rulemaking under the Communications Act strikes the appropriate balance between certainty and flexibility.  It affords the FCC the ability to make and enforce open Internet rules, and also to adapt them to changes in technology. Brand X was more of an endorsement of the FCC’s authority and discretion to decide how to classify broadband than an endorsement of merits of the 2002 classification decision itself. With the authority and discretion to make that decision comes the authority and discretion to revisit it when circumstances – such as the maturation of the commercial Internet or the submission of nearly four million comments on the subject of net neutrality – require. That is what the FCC did in the Open Internet Order. If we want regulation to stand a chance at adapting to and accommodating technological change, such changes in course are essential.