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Verizon v. FCC

Commentary First Amendment Telecommunications
Verizon Challenges FCC’s Open Internet Order By Andrew Crocker — Edited by Heather Whitney Brief for Appellants, Verizon v. FCC, No. 11-1355 (D.C. Cir. July 2, 2012) Brief hosted by GigaOm On July 2, Verizon, joined in part by MetroPCS, filed a brief in the United States Court of Appeals for the District of Columbia Circuit in an appeal of the FCC’s final order adopting its 2010 Open Internet Order, also known as the network neutrality rules. In the brief, the telecommunications providers argue that the FCC rules are in excess of the Commission’s statutory authority, that they violate the First and Fifth Amendments, and that they are arbitrary and capricious under the standards of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706. Both PC World and journalist Jeff Jarvis, writing in the Huffington Post, criticize Verizon, taking particular issue with its constitutional arguments and cautioning that an ISP’s free speech rights should not trump those of its users. Verizon’s appeal to the DC Circuit is only the latest in a long battle over the extent to which the FCC can mandate neutrality practices among both wired and wireless ISPs. In 2005, the Commission announced a “Policy Framework” governing such practices, and in 2008 it brought an order against Comcast for throttling the traffic of subscribers who were using the BitTorrent filesharing protocol. However, in 2010, as previously covered by the Digest, the D.C. Circuit found that the FCC had exceeded its statutory authority over Comcast under the General Provisions of Title I of the Communications Act and vacated the order. Rather than seeking to reclassify broadband services providers as common carriers under Title II of the Act, the FCC’s subsequent Open Internet Order instead again asserted jurisdiction under Title I with additional support from radio regulatory provisions in Title III. The Order imposes several duties on wired broadband providers, including a “no-blocking” provision that prevents providers from blocking any “lawful content, applications, or non-harmful devices,” a rule against “unreasonable discrimination” in transmitting lawful traffic, and a “transparency rule” requiring disclosure of network management traffic. Mobile providers are subject to similar rules, although they are only barred  from blocking lawful websites and services that compete with their own voice and video offerings.  As CNET reports, Verizon has been waiting to challenge the Order since it became official last September. Verizon’s first argument is that the Open Internet Rules constitute an imposition of common carrier obligations, which cannot be applied to “information services,” the classification used by the FCC to designate wired broadband Internet.  Similar restrictions apply to the classification applied to mobile providers. In addition, Verizon argues that the FCC lacks a clear statutory mandate from Congress to institute the Open Internet rules.  The final statutory argument made in the brief is that the Open Internet Rules are arbitrary and capricious under the APA because, as the FCC acknowledges, the rules are “prophylactic,” with contested evidence of an actual problem the rules address. According to Ars Technica, it is likely that Verizon’s constitutional arguments, particularly its First Amendment claim, will receive the most attention. Verizon is relying on the Supreme Court’s rulings in Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 636 (1994) (“Turner I”) and Turner Broadcasting System v. FCC, 520 U.S. 180, 197 (1997) (“Turner II”), which found that regulations of cable providers that required them to carry certain channels triggered First Amendment scrutiny because the providers exercise editorial discretion in choosing channels to offer to subscribers. In its appeal, Verizon seeks to assert its speech interest against the Order’s “no-blocking” and “no-discrimination” rules, which it argues would prevent it from engaging in editorial discretion by offering differential pricing to application providers. By contrast, critics such as PC World’s Tony Bradley argue that this assertion of free speech rights ignores the speech rights of upstream users attempting to reach Verizon’s subscribers. Verizon also argues that the  Orders are in effect a permanent easement granted to upstream users for Verizon’s network, in violation of the Fifth Amendment’s “Takings Clause.” Because the D.C. Circuit previously invalidated the FCC’s earlier order applying the 2005 Open Internet Framework to Comcast, some observers predict that the Order will not survive Verizon’s challenge, reports Ad Week. However, others suggest that the FCC’s legal grounding may have been firmed up since the Comcast case, setting the stage for a closely watched decision. Andrew Crocker is a 3L at Harvard Law School.