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D.C. Circuit Hears Challenge To Federal Communications Commission’s 2018 Restoring Internet Freedom Order

On Friday, February 1, 2019, the U.S. Court of Appeals for the D.C. Circuit held a marathon oral argument in Mozilla Corp. v. FCC, No. 18-1051 (D.C. Cir. Feb. 22, 2018), in which various petitioners challenged the Federal Communications Commission’s (“Commission’s”) 2018 Restoring Internet Freedom Order (“2018 Order”).

The 2018 Order took effect earlier this year, and effectively repealed the Net Neutrality regulations installed by the Commission’s earlier 2015 Open Internet Order (“2015 Order”). With that order, the Commission reclassified broadband internet access service from an information service to a telecommunications service subject to common carrier regulation under Title II of the federal Communications Act. The Commission also expanded transparency requirements applicable to Internet Service Providers’ (“ISPs’”) consumer disclosures and adopted “bright line rules” prohibiting ISPs from throttling, blocking, and prioritizing internet traffic. And the Commission also adopted a “General Conduct Rule” to review any conduct interfering with consumers’ access and use of lawful internet content or edge providers’ ability to make content available to end users. With the 2018 Order, the Commission jettisoned its 2015 Order, and reinstated its longstanding classification of broadband internet access as an information service subject to a “light touch” regulatory approach regulation.

In Mozilla Corp., various petitioners, including activist groups and state governments, challenged the 2018 Order. They principally alleged it violates the Communications Act and is otherwise arbitrary and capricious in violation of the Administrative Procedure Act.

Oral argument before Circuit Judges Patricia Millet, Robert Wilkins, and Senior Circuit Judge Stephen Williams lasted almost five hours. The arguments focused on whether broadband internet access is properly classified as a Title I information service or a Title II telecommunications service, the deference afforded to the Commission’s statutory interpretations, and whether the Commission adhered to procedural requirements in issuing the 2018 Order.

Petitioners argued the Commission’s classification was not entitled to deference based on its alleged failure to decide whether certain ISP services constituted information or telecommunications services. They also argued the 2018 Order did not fully assess issues like public safety, market concentration, and how antitrust and consumer protection laws would function in the absence of regulation by the Commission. In response, the court invoked the Supreme Court’s holding in Nat’l Cable & Tele. Ass’n v. Brand X Internet Services, which upheld the Commission’s authority to classify broadband internet services as information services.

During its argument, the Commission’s General Counsel argued its statutory constructions are entitled to deference, as permitted by Congress and confirmed by prior rulings of the D.C. Circuit and Supreme Court. But some members of the panel criticized the Commission’s analysis based on its relative silence on possible public safety implications of paid prioritization practices. The Commission, however, responded with historical, legal, and economic explanations for its determinations.

As for the 2018 Order’s preemption of state net neutrality laws, petitioners argued the Commission cannot preempt state laws while at the same time determining it lacks authority to regulate the practices which states now seek to regulate. But the court pushed back on the notion the Commission had abdicated all regulatory control such that states may enact sweeping legislation touching on interstate telecommunications. The court also raised, and petitioners acknowledged, the preemption issue may not even be ripe now given the array and scope of proposed state net neutrality laws as well as pending litigation over state-enacted net neutrality laws proceeding in courts across the country.

We expect the court will rule prior to the start of its next term.

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

Brian D. Weimer, Communications Attorney, Sheppard Mullin, law firm
Partner

Mr. Weimer is a corporate partner in the firm's Washington, DC office and leader of the firm's Communications Practice.

Mr. Weimer provides transactional and regulatory advice to clients in the telecommunications industry, with particular emphasis on satellite, wireless, and media companies.  He acts as corporate counsel to telecommunications companies in M&A and financing matters and also advises on Federal Communications Commission (FCC) regulatory issues presented by these transactions.  Mr. Weimer represents FCC licensees on a wide range...

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Imad S. Matini, business trial practice group, sheppard mullin, litigation lawyer, washington DC, regulatory compliance
Associate

Imad S. Matini is an associate in the Business Trial Practice Group in the firm's Washington, D.C. office.

Areas of Practice

Mr. Matini’s practice focuses on business litigation and regulatory compliance.

Prior to joining the firm, Mr. Matini clerked for two federal judges: the Honorable Frederick P. Stamp, Jr. for the Northern District of West Virginia, and the Honorable Stephanie D. Thacker for the United States Court of Appeals for the Fourth Circuit.

While in law school, Mr. Matini served as Editor-in-Chief of his law review, was a member of the Tax Moot Court team, and worked on behalf of indigent clients as part of his school’s Supreme Court Clinic. Mr. Matini’s article, Distinctions with a Difference, has also been published in the University of Tennessee Law Review.

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