The Restoring Internet Freedom Order on Remand: Next Steps for the Federal Communications Commission

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's Practice Groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at www.fedsoc.org.

 

 

Greg Walsh:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is titled “Restoring Internet Freedom Order on Remand: Next Steps for the Federal Communications Commission.” My name is Greg Walsh, and I am Assistant Director of Practice Groups at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's call.

 

      Today, we are fortunate to have with us Matthew Brill, a Partner at Latham & Watkins, who is the Global Chair of their Communications Law Practice and member of the Supreme Court and Appellate Practice. We also have Kristine Hackman, a Vice President of Policy and Advocacy at USTelecom ­- The Broadband Association; Russell Hanser, a Partner at Wilkinson Barker Knauer; and our moderator, Lawrence J. Spiwak, President of the Phoenix Center for Advanced Legal and Economic Public Policy Studies and a member of the Executive Committee of FedSoc’s Telecommunications & Electronic Media Practice Group.

 

      After our speakers give their opening remarks, we will go to audience Q&A. Thank you all for sharing with us today. Mr. Spiwak, the floor is yours.

 

Lawrence Spiwak:  Great. Thank you very much, and welcome, everybody. We have a very interesting teleforum today with a very excellent panel, so I’m very excited about that. Today’s title, as the moderator said, is “Restoring Internet Freedom Order on Remand: Next Steps for the Federal Communications Commission.” So for those of you who probably -- very few are unfamiliar with the sordid saga of net neutrality litigation. Let me just give a quick background to bring us up where we are.

 

      I guess in 2018, the Federal Communications Commission issued their -- what’s called the Restoring Internet Freedom Order in which the current Commission reversed the Obama era Commission’s 2015 Open Internet Order. And in that order, in the Restoring Internet Freedom Order, the Commission, among other things, primarily reversed the imposition of Title II common carry regulation on the internet and returned it back to a light touch under Title I.

 

      And as with all major net neutrality cases, it was appealed to the D.C. Circuit in a case called Mozilla v. FCC. Making a very long story short, the D.C. Circuit, citing to both the Supreme Court and its own past precedent, said that the Commission was -- because the Communications Act was ambiguous, it was okay for the Commission to re-reclassify broadband back to a Title I service.

 

      However, the Mozilla case was not a complete victory for the Commission. Probably the biggest thing is the court adopted what I call, in a recent law review I did for the Federalist Society Review, I call the statutory abdication theory. What the court basically said is because the Commission stepped off the Title II escalator — that’s actually Judge Williams’s phrase — because Title I is not an affirmative grant of authority, the Commission has essentially abdicated all authority under Title II.

 

      So a lot of the issues involved are sort of in legal limbo. The result of that, which is not necessarily the topic of today’s call, though, is the Commission vacated the FCC’s effort to do blanket preemptionable state regulation of the internet. But it remanded three issues, two of which dealt with the statutory interpretation argument. And that’s what we’re going to talk about today.

 

      So the first issue they remanded was pole attachments. The second issue was whether or not, by reclassifying, could broadband exclusive providers -- the second one is whether or not broadband could still be included in the FCC’s Lifeline program. And the third one is more of a hortatory issue which deals with public safety.

 

      So to discuss all this, as the introduction said, we have an upstanding panel. Matt Brill is a partner at Latham & Watkins. Kristine Hackman who’s Vice President of Advocacy over at USTelecom. Russ Hanser is a partner at Wilkinson Barker Knauer. All these people have extensive telecom experience. All of them have worked at the Commission, and it’s great that we’re having them there.

 

      So let’s get started. And again, there’s a lot of stuff. If you review -- people have reviewed the record in the -- that’s been filed. I would say as usual, 97 percent of the comments filed don’t go to the issues at hand, but we’re going to keep to the issues on remand.

 

      So let’s first talk about pole attachments. Again, quick background for those of you who might not be familiar. Under Section 224 in the Communications Act, the FCC regulates the rates for pole attachments unless a state says they want to do it. And under the plain terms of Section 224, the only people that take advantage of those federal rates are telecommunications companies and cable companies, although both the FCC and the Supreme Court said that mixed use is okay.

 

      So the court was concerned that with the return of Title II, broadband only providers would lose, quote, “key statutory rights to poles.” And the court was rather dismayed that the FCC did a rather sloppy and inconsistent job of explaining themselves on whether or not 224 still applied or not, so they remanded it.

 

      So let’s get started with that discussion. I will, through that -- we’ll start with Kristine first. Kristine, how should the court handle the -- or the Commission handle the 224 issue?

 

Kristine Hackman:  Oh, man. I mean, not speaking from the court’s point of view, but I could tell you kind of how USTelecom has been viewing this issue. And I really think you hit the nail on the head, Larry, by mentioning the mixed use or what we refer to as the comingling doctrine. In looking at the type of folks that are attaching to the poles, you find that the large majority really are offering are either one, the cable service providers that mentioned, or are offering some sort of a telecommunications service. So it’s really not as glaring of an issue I think as maybe the court might have perceived it to be.

 

      But regardless of that, when you look at the whole reason for the pole attachment rules is really to instill investment and competition in the market and allow access to that infrastructure. And their rules really are not being impacted negatively at all by the decision in the Restoring Internet Freedom Order. In fact, the decision with the light touch regulatory environment in that order really is promoting that overall goal of those -- of that underlying pole attachment rule. So I think it’s not really as big of a concern, and hopefully, the court will be persuaded or on the remand action, the Commission will have all of that evidence in the record to move forward.

 

Lawrence Spiwak:  Russ, have any thoughts?

 

Russell Hanser:  Yeah. So I first agree with everything Kristine just said. I’d add just a couple of points. One is the court seemed to take the position or seemed to act from the assumption that  this was a statutory rights that attachers -- that broadband only attachers had had the whole time all along and suddenly lost with the release of the RIF order. That’s not the case.

 

      So as we -- well, as the three panelists know and as you know, Larry, for all but two of the last 25 years, the Commission treated broadband as an information service implicitly and then explicitly for most of that time. And during that time, under the court’s reading, broadband providers in their role as broadband providers did not have access. It was only the court decision in 2015 that arguably changed anything. And all we are doing is going back to the regime now that we had been in for most of the history of the internet. That’s point one.

 

      Point two is I find it really interesting the court suggests that FTC failed to consider or needed to better consider the interests of the entities that are attaching and that might lose pole attachment rights. Well, the entities that are attaching are the service providers. They’re they wireless providers, the wireline providers and others who are seeking attachment to the poles. In other words, they’re the ISPs in this case. And the ISPs overwhelmingly favored this decision in the RIF order.

 

      So if they’re the ones who in theory, at least, lost rights but they’re the ones who favor the decision anyway, you have to ask, well, why would that be? And one of the reasons is the investment effects which you alluded to are -- overcome the disadvantages. So they’re much more -- ISPs are much more interesting in having the incentive to invest and being able to invest and provide service, and they know that even if we shifted to an all broadband era, they could go and negotiate or could seek legislative outcome or something else. But right now, it says a lot that the ISPs are favoring this even though they’re the ones who’s rights the court said may have been reduced.

 

Lawrence Spiwak:  Well, let me throw this question out to Matt. I did a short little law review on this a couple weeks ago, and it seemed to me that -- exactly what Russ said. This right was created essentially by the strokes of the pen in 2015 for broadband only providers. And the court was rather adamant in United States Telecom, saying those people who thought you had a reliance interest, too bad. Is this -- can the Commission just get away with saying, hey, look, even the court said sorry, no reliance interest. Is that a plausible theory for the court to go back on remand?

 

Matthew Brill:  Well, I think, fortunately, the Commission here is building a record that can bolster its reliance on the long history that Russ mentioned in the short period during which any reliance on the Title II classification may have been based. That long history is important, and I think from an administrative law standpoint, the FCC is justified in saying we can draw on the pre-2015 period of time, our experience, and industry experience and understand how broadband only providers are affected. And it’s relevant that there are very few broadband only providers. It makes sense when you have the high sunk cost of deploying fiber or other infrastructure to offer additional services that garner additional revenues, including video and voice. And most providers, of course, do so.

 

      But now we’ll have a record, and I’ve looked through the opening comments. I’m representing NCTA, the internet and television association. And just as we hypothesized, there isn’t evidence that any broadband provider has come forward and said, “I had some thriving business, but now I’m thwarted because I can’t get on poles.” It’s not to say the pole attachment regime is ideal and is working great in every instance. There are certainly problems out there, but they’re not problems created by a return to the longstanding information service classification.

 

      So notably, Google Fiber, which is a broadband only provider in its view -- it claims that it’s not properly classified as a cable operator. It has said, well, there could be potential problems in light of this classification, but it notably hasn’t said there have been any problems. So I think the record from wireless internet service providers, Google Fiber, and others at best hypothesizes that there could be isolated problems with pole owners, but there’s no evidence that the classification is creating such problems, and certainly no evidence, as Russ put it, that any such isolated problems would outweigh the significant benefits of the light touch approach under Title I.

 

Lawrence Spiwak:  Let me follow it up because, again, you represent the cable trade association. One of the things that I think that the court didn’t ask in that is that why would somebody want to be a broadband only provider? I think that’s a key question which the court just ignores. And I think the answer to that, for those of us who’ve been practicing telecom law for many, many years, is kind of an obvious answer. And the court says, “Well, it’s a demand issue. That’s what consumers want.”

 

      Well, maybe. But as you know and as you’ve, I’m sure, litigated, when you go with -- in telecom, it’s you pick the legal regime which gives you the smoothest point forward. And so by being a broadband only provider, that also then gets you out of local franchise requirements, telecom fees, all that kind of stuff. So it wasn’t a government mandate that you should be a broadband only provider, but it was a deliberate choice by a private firm. Do you have any thoughts about that?

 

Matthew Brill:  Yeah, it reminds me of a -- my client in CTA came up with the phrase “many years ago, rights and responsibilities” when first talking about IP enabled services. When the FCC in I think it was 2004 was asking about classifying voice over IP and other IP enabled services for the first time, NCTA and others point out that when you look at the statute, any classification decision, whether it’s for broadband or VoIP or IP video has certain rights and certain responsibilities.

 

      Certainly, pole attachment is one of the rights that you can get if you’re a regulated entity within the categories that the statute regulates, cable TV and telecom service. But providers across all of these services make decisions about whether the rights are worth the burdens and whether entry barriers and rate regulations or tariffing obligations on the voice side and others justify trying to live within that regulated category.

 

      So all of these classification decisions have some import, just as the Title II decision divested the FTC of jurisdiction over common carrier services. But here, I think there’s an especially hollow argument that broadband deployment has somehow been harmed because we have data showing the opposite. And certainly, entities like Google Fiber and others can choose to operate as cable operators if they want to avail themselves of the benefits that the statute gives such operators.

 

Lawrence Spiwak:  All right, good point. Russ, anything else? Kristine, anything else on this topic?

 

Russell Hanser:  None for me.

 

Kristine Hackman:  Same.

 

Lawrence Spiwak:  All right. The sexy topic of pole attachment now is concluded. All right, and moving from the frying pan into the fire, Lifeline service. So again, here we have another statutory definitional problem. Lifeline was established to give low income folks access to telecommunications services I guess all the way back, part of the ’96 act. In 2016, the Commission added broadband to that. That was then upheld by the Tenth Circuit in the case called In Re: FCC 11-161. And you know when the title of the case is just the FCC’s docket number how huge that case must have been.

 

      So here’s what’s interesting. The D.C. Circuit’s view was that reading the Communications Act, in particular 214 and 254, which was the statute that specifically deals with universal service, they argued, and I quote, “Broadband’s eligibility for Lifeline subsidies turns on common carrier status,” close quote. So in the court’s view with the return to Title I, Lifeline can no longer include broadband. Again, we’re back to the statutory definition problem.

 

      Now, what’s interesting is as support, the D.C. Circuit pointed to the Tenth Circuit’s opinion. In reading a lot of the record, people who say that broadband can be included in Lifeline also point to the Tenth Circuit’s opinion. So I guess as a starting point of our question is who is right? Whose reliance is correct? So Russ, do you want to start with this question?

 

Russell Hanser:  Sure. So the parties who argue that you can use Lifeline to support broadband services are the ones who are right. And I think that the case you mentioned, the Tenth Circuit case which evaluated what’s known as the USF/ICC Transformation Order, that order -- sorry, that decision and the underlying order, I think, pretty clearly support the view that the funds can be used to support broadband service.

 

      So what happened then, we were in 2011, and the Commission under then-Chair Julius Genachowski was interested in reforming a few systems, but among them the universal service system in a way that could pivot them toward broadband. This is in the wake of the 2010 National Broadband Plan. And they adopted a theory under which it is true that the recipient of universal service had to be a telecommunications carrier because there’s a requirement that it be an eligible telecommunications carrier. And telecommunications carrier is defined in the act as an entity that provides a telecommunications service. So that’s true.

 

      But then the FCC said that doesn’t mean you can’t provide money to support something else that entity is providing, namely broadband. And there’s a lot of language in Section -- well, there’s at least some language in Section 254 of the Communications Act, which is the universal service provision, that suggests Congress was thinking about possibly using money to support information services or what is sometimes called advanced services.

 

      And that was the theory that FCC adopted then. It was in the context of high cost support, but it later moved on and applied this theory elsewhere, including to Lifeline. And that’s the reason we haven’t -- it was, frankly, a little bit surprising to me that the court in Mozilla went where it did because it seemed to sort of be short-handing it and not investigating exactly how this sort of statutory and policy argument played out before and why it didn’t pose a problem here to reclassify.

 

Lawrence Spiwak:  Kristine or Matt?

 

Matthew Brill:  This is Matt. I would say I certainly agree with Russ. Part of this is easy. The statute has been definitively construed to allow support for broadband under the Lifeline program. And critically, that kind of support was established when broadband was an information service before the 2015 Title II classification. So there’s no doubt we can return to supporting broadband, notwithstanding the information service classification.

 

      I think the real debate is the same as the one we just had with respect to pole attachments, namely, can broadband only providers get support for Lifeline without also providing a voice service? And the answer to that may be no, but that again just raises the question of what is the import of that?

 

      First, is there some real benefit that’s being deprived to society because those entities couldn’t get support without also providing a voice service? And there’s no evidence of that. There are good reasons to provide voice service along with broadband. Most consumers want both. So it’s pretty easy from a marketplace perspective to offer both as a condition of getting support.

 

      And even if there were a problem, does it justify solely for that reason throwing out all the benefits of Title I and returning to Title II? Well, certainly, it does not. So from the standpoint of my clients and my own views, this is a pretty straightforward issue, and it’s one that the Commission in a fairly narrow way can address on remand from the court’s decision.

 

Kristine Hackman:  And Matt, to your point about consumers and what are consumers choosing on this, Free Press actually put in this record -- and Free Press, for those of you that aren’t familiar with them, are generally a group that are favorable of the Title II regulation and opposed the changes in Restoring Internet Freedom. But they pointed out that only one percent of Lifeline customers are even choosing the broadband only model.

 

      So going back to that point of the costs versus the benefits, in a one percent -- in a world where consumers are already choosing both services, that warrants the Commission abandoning all of the wonderful benefits that come with the light touch Title I regulation for just one percent of consumer situation.

 

Lawrence Spiwak:  Yeah, I think that’s a valid point. I actually, in preparation for the teleforum, went back and at least looked where the D.C. Circuit cited to the Tenth Circuit’s opinion, and they pointed exactly to the point that Matt just brought up was essentially broadband only ETCs. And even the court said in that case, and I guess the Commission said in the underlying order, we’ll cross that bridge when we come to it, but that’s not really before us there. I think everybody’s sort of of the view, it’s like, well, all right, we’ll worry about it then, but it’s not really what’s going on now.

 

Russell Hanser:  Hey, Larry?

 

Lawrence Spiwak:  Yes, sir.

 

Russell Hanser:  So this is Russ. Before we move on, I just want to touch back on something Matt said. Matt noted that it’s possible that if we get to a broadband only world that those services would not be supportable, and I entirely agree with that. I just want to note the flipside though, it’s also possible that they could be supported.

 

      So whereas the Section 224 language we were discussing a few minutes ago is fairly straightforward and clearly governs, Lifeline actually began in the ‘80s under President Reagan. It was codified, as you said, in the ’96 act. But the ’96 act includes a provision that also says nothing here is meant to affect the collection, distribution, or administration of Lifeline program that preexisted the ’96 act.

 

      Obviously, pre ’96, we did not have a Lifeline program that supported broadband, but what that suggests is that there is an ability, there is some residual ability of the FCC to do something like a Lifeline program even potentially outside of Section 254. But as I mentioned before, Section 254 has some language that can be read in various ways.

 

      So while I entirely agree, we might find out somewhere down the road that broadband only is not supportable absent an amendment to the statute. It also could be we’d find out the reverse.

 

Lawrence Spiwak:  That’s a great point, Russ, which brings me to a discussion point. Again, it’s not a really legal issue, but this being such a political topic, there are a lot of calls both in the record and just out in the echo chamber. But somehow, the FCC needs to completely revamp its Lifeline program, especially now that we’re in the COVID environment. Is that appropriate for this particular remand, or should the Commission stick to its knitting and just try to answer the court’s decision -- court’s questions as best they can and move on?

 

Matthew Brill:  Well, it’s Matt. I’ll start. I think it’s certainly not appropriate for this narrow remand proceeding. We’re going to have a really broad debate in the wake of the COVID crisis, and we are already having this debate in the midst of the COVID crisis about the public response. And a lot of it is a big subsidy debate. When we see so many Americans working from home, distance learning from home, obtaining telehealth at home, there’s a fair debate about the role of government in subsidizing broadband access for people who don’t have it, can’t afford it, whether it’s low income support or high cost support in rural and other unserved areas.

 

      But that’s a pretty big debate about large scale appropriations. We’re seeing in the CARES Act funding roll out for broadband, and there are a lot of debates in Congress about additional funding for students to learn at home and, again, for low income support. So I think those are entirely appropriate debates, and when we’re in the midst of a crisis like this, it makes sense to think about the role of government in supporting an essential service like broadband. But it’s certainly not one that fits within the narrow remand from the D.C. Circuit, and it’s just not something that the Commission necessarily even has the funding or authority to tackle in this context.

 

Lawrence Spiwak:  All right, makes sense to me. All right. Well, our first two topics now discussed, let us turn to the third issue on remand, and that is the issue of public safety. This is, I think, a really interesting topic that I think surprised a lot of people when it came up. A lot of the state government -- by way of quick background, a lot of the state government petitioners filed in the RIFO, and they made the argument that reclassification, and in particular, the elimination of the 2015 no blocking, no pay prioritization rules would somehow have severe implications for public safety, and therefore, it was arbitrary and capricious.

 

      In fact, the exact quote was getting rid of these rules could, quote, “imperil the ability of first responders, providers of critical infrastructure, and members of the public to communicate during a crisis.” What’s interesting about this is that the court’s rationale for remanding this was that it pointed to 47 USC 151, which is the very first section on the Communications Act which sets up the Commission which is setting forth the purpose of the FCC. And in this case, the court wanted to rely on the FCC’s purposes, quote, of “promoting public safety, life, and property through the use of wire and radio communications.” So in a way, this is a very hortatory mandate, but here we are.

 

      What’s interesting is on appeal, a lot of people focused on the now infamous California firefighter example where a bunch of firefighters, fire department in California bought a Verizon residential broadband plan. And during the middle of the wildfires a couple years back, somebody in a low level in Verizon throttled them.

 

      And this is now cause célèbre, so the court, I think, rather cheekily talked about this case a lot but then said, “Well, this happened after the rule, so we’re not going to expand the record.” But clearly, they mention -- and I have no doubt that the record now has the Verizon California case in it. So notwithstanding, the court was still very dissatisfied with the Commission’s treatment, or lack thereof, of the public safety issue.

 

      So this, I think, is one of the really big issues. So let’s start the discussion. Have parties really refreshed the recollection sufficiently, and how should the Commission respond to this? Kristine, let’s start with you.

 

Kristine Hackman:  Yeah, sure. So I just wanted to clarify one point. I think with that incident that you were referencing, and this kind of goes into a broader point that we’re starting to see in the record as well, is that the service that was -- taking it even a further step back, when you look at net neutrality and what we’re talking about, we’re really only talking about the broadband internet access service, the retail mass market service that you and I would subscribe to most likely in our homes and not be enterprise or specialized services. And with that incident that you described, I don’t think that it was necessarily a biased connection, but I might be incorrect on that.

 

      But taking that to the broader level, when you really look at the type of services that first responders are subscribing too, they have unique needs that are different than what we need in our homes for watching videos or doing telework. And so in a lot of these instances, the types of services are enterprise services or negotiated differently so then that way the public service entity is able to get the type of services that they need. And those services have never been subject to the FCC’s net neutrality regime, even under the more heavy-handed Title II approach in 2015.

 

      So when you’re looking at the scope of this, it’s really important to keep in mind the type of services that these entities are subscribing to. And even if there are some public service entities that are subscribing to bias, when you look at the overall positive impacts that this light touch regulatory structure has provided for everyone, it really does, again, show that the benefits of this regulation outweigh the cost.

 

      And nowhere in the record have we seen really a concrete example of this threat to public safety, but I would argue that right now we are seeing these networks being tested in unprecedented ways and ways that we didn’t really even have time to prepare for this particular crisis, but the longstanding light touch regulatory framework that has really allowed the internet to grow and evolve has allowed internet service providers to be nimble and to make sure that their networks are able to respond to this increase in demand.

 

      And where they’re not, or where there could be potentially concerns, we’ve seen providers out there adding capacity and making sure, in particular, that public safety entities during this time are not going to have to worry about their broadband connection when they’re worried about keeping their community safe.

 

      So we’ve really seen providers being able to act quickly, and we’ve seen the ability of first responders and other government agencies to have these new, innovative ways to communicate and share information that if this pandemic had happened even 10 years ago, it would be just completely different. So I think we need to keep in mind the service and then also just the overall -- what the overall regulatory environment has allowed broadband to allow us to do.

 

Lawrence Spiwak:  Russ?

 

Russell Hanser:  Yeah, I completely agree with all of that. And Kristine ticked off a lot of what I would have to say, so I’ll just say a couple of things. I want to comment on -- I feel like this is not commented on often enough. I want to comment on the mildness of the remand on this issue. So on the other two issues, as we’ve discussed, the court essentially said there are these statutory provisions that seem to speak only to telecom providers, telecom service providers, and you didn’t address what happens as we move toward an all broadband world.

 

      Here, it wasn’t even that detailed. Here, really, the court seemed to be annoyed because in its view, the FCC had simply not addressed the argument of public safety entities. So public safety entities come in and talk about the reasons why they think that the action the agency’s considering will undermine public safety, and when that happens, as long as they have material arguments, the agency does have an obligation to respond.

 

      The agency came back and said, “Well, we did respond because it was encapsulated in our broader response.” And the court didn’t agree and said you have to talk about it specifically, in particular when you have Section 1 of the Communications Act — which, Larry, you mentioned — which says that public safety is one of your overriding missions. So I don’t see them as saying we don’t think this works so much as I see the court saying you need to explain to us. You need to address these concerns.

 

      And as Kristine notes, there’s a lot to say in response to those concerns. The Santa Clara incident had nothing to do with net neutrality. As Kristine mentioned, it was not a mass market broadband plan, which is what was subject to the 2015 rules. I’d also say that the 2015 rules expressly allowed plans under which a customer would get a certain amount of data at a certain speed and then a different amount, different speed after they passed that data threshold. I promise it says that. It’s in paragraph 122 of the 2015 order. So I think those arguments are sideshows.

 

      What the Commission needs to do here is come back and exactly as Kristine said, it needs to look at the broader environment. We’re all using broadband more. Our public safety is using broadband more. But individuals are using broadband more for public safety purposes to check alerts, to find out where it’s safe to go and not to go, and so on. And the RIF order has had this effect of broadly expanding capacity, and broadly expanding capacity in a way that overcomes any hint of pay prioritization, which, by the way, I haven’t seen an of in my 20 years or 15 years on this issue. So I think the FCC can really readily address the public safety point by saying, “Yes, we’ve looked at it, and if anything, this order has benefitted public safety.”

 

Lawrence Spiwak:  Matt?

 

Matthew Brill:  Well, those are all great points. I might just take a step back and say when we think about regulations that are being called for and some public safety advocates in California and elsewhere are saying we need to return to Title II to benefit public safety, what is the need? What is the problem we’re trying to solve?

 

      It seems that public safety advocates who call for Title II regulation are saying largely that broadband is critically important. On that, there’s no dispute. Broadband is undeniably important. But they leap from that to what I think is a speculative and unsupported assertion that there are all kinds of harms that are likely to occur. That’s the critical gap in the record. There aren’t problems occurring, and it’s not reasonable to assume that such problems would occur.

 

      And some public safety entities have argued that throttling and blocking or pay prioritization are going to cause harms, but it does just mirror the larger debate about Title I versus Title II. And I think it was Judge Silverman who said there are vanishingly few examples of abuse over decades of experience. And the Santa Clara incident is really the only one that’s been raised in the public safety context, and it’s been thoroughly debunked as a basis for invoking Title II in this context. So I think when we think about what is the need for regulation here, we have a lot of really powerful rebuttals.

 

      And the networks are robust. They’re performing well. Public safety users, like everyone else, are benefitting enormously from these networks which are holding up well in the crisis. There’s no reason to think there’s going to be abuses. And if there were, contrary to the pledges of my clients and other broadband providers, the FTC could step in. So I think there’s a broad array of responses that the Commission’s going to be able to provide that are very convincing, and I think, no doubt, should satisfy the task on remand.

 

Lawrence Spiwak:  It just seems to me like isn’t that what FirstNet is all about? The whole purpose was an interoperable public safety network which was created.

 

      Let me ask you just -- Russ raised an interesting question which is just sort of getting back to the legal topic, which is what we’re supposed to be talking about today. Russ, you described the court’s response on the public safety topic as mild. And you said that the public safety people had raised issues. And if I understand your characterization of the Commission’s response, they sort of just paid lip service but really didn’t get into great detail. In fact, I was rereading the case last night, and even United States Telecom had tried to come back and try and supplement the record, but the Commission didn’t do it.

 

      Let me just ask sort of a question with regard to precedent and how the Commission would be judged with its explanation. The public safety people say that it’s arbitrary and capricious. How much deference -- this is clearly a hortatory question. It’s sort of like is broadband being deployed on a reasonable and timely basis? How much discretion does the Commission have to go, “Look, I think I’ve answered this question. That reclassification back to Title I will not have an adverse effect.”

 

      Does this open up -- the court says that’s not enough. Does this open up a future line of precedent where every Commission order you start going to the Commission’s mission statement as opposed to the issue at hand? It just struck me before we started on this call that hypothetically that could happen. Do you have any thoughts on that?

 

Russell Hanser:  I guess as a theoretical matter, could the FCC come back and say, “Nope, we’ve dealt with that.” I guess --

 

Lawrence Spiwak:  -- It’s back on remand and the court says it’s still not enough.

 

Russell Hanser:  Right. That could certainly happen, but I guess as a practical matter, if I were back in the Office of General Counsel of the FCC where I spent some time, too long ago now, I would certainly say, you know what, it’s just easier to get to answer the question. And I suspect that if this remand is addressed at least by the current Commission, the course they will take will be to try to be as responsive to the court as possible and provide its thought process in some detail.

 

      Could they play chicken with the court and not do that? I guess they could, but there are cases in which judges will get annoyed and they could invite another remand. This is, of course, what happened before Kristine was born, but in the triennial review and triennial review remand process with USTA 1 and USTA 2 where it just appeared that Judge Williams at least was getting really annoyed with the FCC not being responsive to what he thought he was being clear about. So it could happen and could lead to a back and forth. My guess is that the FCC will try to avoid that outcome by addressing these points individually and clearly.

 

Matthew Brill:  And let me jump in, Larry. It’s Matt. To the extent the question is if the FCC now provides an explanation as to why its Title I light touch regime adequately serves the interests of public safety along with everyone else, how much deference will it get? I think the answer to that is a lot because this is really, I think, best viewed as a strain of administrative law cases where the D.C. Circuit just chided the FCC for a failure to explain and respond to the record on the public safety issues.

 

      But it’s not demanding a particular answer, and we know that because the court didn’t think it was serious enough to undermine the Title I classification, even when they thought the explanation was inadequate. So the bar is fairly low in this context with the Commission to come back with a cogent explanation under State Farm and other seminal administrative law cases. The Commission doesn’t need to have the best answer. It needs a reasonable and adequately explained answer. And I think this record provides ample basis to do that, and the Commission can sail over that bar easily.

 

Lawrence Spiwak:  Thanks. All right, well, those were the three major questions that we had. I’d like to use the time we have remaining for a section I’d like to call update on the case. So there’s a couple of things that I think just where we are, and that’s why we’re privileged to have the panel that we have.

 

      So here’s the first question. Again, I don't know, this might be pure speculation, but petitions for certiorari of the original case are due, I believe, this month unless they’ve been postponed due to the COVID virus. They’re still due this month, is that correct?

 

Russell Hanser:  Actually, I think the Supreme Court delayed all deadlines of that sort, so I think we’re now looking at a July deadline.

 

Kristine Hackman:  It’s July 6. Yeah, technically July 5, but that’s a Sunday, so July 6.

 

Russell Hanser:  Yeah.

 

Lawrence Spiwak:  Shows you I haven’t gotten out of my house since the crisis. Okay. So we have till July, so it’s been moved back. But the petitions -- let me rephrase. Petitions for cert are due in July. Thank you, panel.

 

      Do we think anybody’s going to file, and if so, on what issue? I know people are sort of keeping things close to the vest, but what do we think? Do we think people who don’t like the reclassification decision might try and take up Judge Millett’s concurrence? What do we think?

 

Russell Hanser:  This is Russ. Let me start. First of all, let me just say I tease Kristine about her youth because she’s a client and we’re friends, but I just want to make clear Kristine knows ten times as much about all of this as most people ten times -- or three times her age. So let me just say that. And that’s not because she shot me an email saying I needed to say that or anything like that.

 

Lawrence Spiwak:  Well, excuse you. At least, Russ, you can say, “Hey, you kids, get off my lawn.”

 

Russell Hanser:  Right, exactly.

 

Lawrence Spiwak:  [Laughter]

 

Russell Hanser:  On your point --

 

Kristine Hackman:  -- Russ, I was going to say I appreciate you thinking I’m as young as I really am not. But thank you. Thank you for that compliment.

 

Russell Hanser:  [Laughter] So on the question, I would say one unusual aspect of the case which we haven’t discussed is this fact that two of the judges, two of the three judges issues opinions that essentially said we’re finding that the FCC gets deference on this classification point because there’s this 2005 Brand X Supreme Court case, but we really think that if the Supreme Court were to look at this now, it would find that there’s only one way to look at broadband internet access which is as a telecom service.

 

      Given that, given those decisions, if I were on the side that wanted a Title II classification, I would think I would take up the invitation and file for cert, even if it put some other victories at risk, the preemption victory that they had. And the reason I would do it is because I’d be worried that if we don’t have that, then every time the administration changes, we’re going to go to back and forth, whereas if they win at the Supreme Court on that point, which I think is unlikely, but if they won at the Supreme Court at that point, then they’d have a Supreme Court ruling that under the current language, there was only one appropriate interpretation, which is theirs. So for that reason, I’m kind of expecting someone will file for cert, but I could be wrong.

 

Lawrence Spiwak:  And let’s not forget that Justice Thomas a couple months ago sort of dropped in, I think, in a concurrence to the dissent, “I wrote Brand X, and I would consider revisiting it.”

 

Russell Hanser:  Yes. Although I’d say that --

 

Lawrence Spiwak:  -- So there is that too.

 

Matthew Brill:  Yeah, very different point, though, Larry. What Justice Thomas said was about a different aspect of Brand X that goes to the interplay agency decisions and court decisions. In that case, you may recall, the broadband classification issue had been decided by the Ninth Circuit in a case called City of Portland. And when the FCC came along with this cable modem order, the Ninth Circuit said, “Well, City of Portland controls, so broadband should be a Title II service under our own precedent.”

 

      And what the first part of Brand X said is that the agency, in essence, can supersede the Ninth Circuit’s construction because the Ninth Circuit said it was a Chevron Step 2 issue. It was one where the statute was ambiguous and therefore an agency can fill the gap. I think Justice Thomas was clear in saying he now has a different view on the roles of agency vis-à-vis courts. It had nothing to do with the merits of the information service classification, and I don’t think it tells us anything about what he thinks on that question.

 

      So I’m not going to predict what people are going to do. I wasn’t sure there was a good reason to seek rehearing, and some of the petitioners did, and predictably lost. Without dissent from rehearing, it’s not usually a great candidate when the Solicitor General’s Office would likely oppose cert to file a petition, but certainly can’t rule it out. I don't think the Thomas concurrence gives much hope for petitioners, nor do I think there’s a strong chance that the Supreme Court is going to overturn Brand X now that that’s settled precedent.

 

Lawrence Spiwak:  Hmm. Even on the -- well, speaking of Justice Thomas, he also issued the statement about preemption by nondelegation. So do you think the preemption point might be taken up or no?

 

Matthew Brill:  Well, the government would have to petition for cert on that, and I don't know what the Justice Department is planning to do, but I don't think that’s likely. One of the reasons I don't think it’s likely is that the D.C. Circuit did correctly say that conflict preemption continues to apply, and that just follows from the Supremacy Clause of the Constitution.

 

      So if a state like California, which I’m representing the cable industry in challenging their own net neutrality mandates, if California imposes obligations that are directly contrary to federal law, that are contrary to the information service classification upheld by the D.C. Circuit, that are contrary to the FCC’s judgement in eliminating the general conduct standard and other rules, those judgements are able to be preempted under the conflict preemption doctrine and the Supremacy Clause, I think,  that lessens the need to go to the Supreme Court on this blanket preemption express preemption theory. If we’re going to get to the same result with courts invalidating state laws that contradict federal law, I don't know that there’s a compelling reason to test the limits and doctrinal nuances of the preemption doctrines.

 

Lawrence Spiwak:  That actually brings me to the next question. I’m so glad you raised that. We’re very fortunate that we’re on the call. As you said, you’re actually representing the cable companies out in the California case. For those people who aren’t familiar with that subset of the litigation, right after the Commission issued its 2018 Restoring Internet Freedom Order is nature abhors a vacuum. California passed its own state level net neutrality law. And as soon as that happened, both the Justice Department and private parties, of which Matt is one, representing a filed suit, and the parties agreed to stay that litigation — and there’s also a Vermont case as well, if I’m correct — stayed until the end of the Mozilla litigation.

 

      Matt, my question to you is what marks the end of the Mozilla litigation, because again, we’ve got the remand, maybe cert. What marks the end that those cases then start back up or not?

 

Matthew Brill: So there was a stipulation in California, and similarly in Vermont, that tied the stay of litigation to the litigation process in Mozilla, so it ends at its earliest if there’s a decision not to seek cert in July. If that’s the outcome and there’s no cert petition, the California case would resume within 30 days thereafter, except if a preliminary injunction motion is filed. In that case, the case would remain in -- I’m sorry, the enforcement authority of California would remain stayed until the judge can decide that motion for preliminary injunction.

 

      It’s a little bit different in Vermont but to similar effect. All of this at the earliest could resume within 30 days of a decision not to seek cert in July. If there is a cert petition, the stay of enforcement and stay of litigation would continue until the Supreme Court either denies cert or, in the event it grants cert, until the end of the merits phase of the Supreme Court. So at the earliest, within 30 days of July non-filing or considerably longer if cert is sought or even granted.

 

Lawrence Spiwak:  All right, thank you very much. All right, well, before we take some audience questions, at the end of any after school special, we always have the segment which is what have we learned? So we’re kind of, again, at this point of the litigation, I’d like to throw this out to the panel of what have we learned?

 

      It’s been three years since we’ve had the Restoring Internet Freedom Order. I think certainly during this COVID crisis, we have learned that the internet has not collapsed as everybody predicted with returning to a light touch regime. That doesn’t mean that it’s not going to be a political issue. We’ve already seen people talk about it. It will inevitably be -- you have, as somebody mentioned in the call, two different judges that have essentially given roadmaps on how to go back.

 

      So I’ll throw this out. What have we learned, and where do we think this is going because it’s wonderful as lawyers and academics that we can still have something to do on this topic. It does get a bit tiresome. So let’s talk about that for a little bit. Kristine, I’ll start with you, please.

 

Kristine Hackman:  Sure. So I think what we’ve learned is that the Commission has the legal justification to look at broadband under either lens. And we’ve seen a much stronger growth of broadband legally. Well, legally, the Commission can look at it under either lens, Title I or Title II. But under Title I, we’ve seen much more investment and growth of the internet.

 

      And this uncertainty of if there is a change in administration or anything that it could, as you said, it’s a political issue, could change. And there is just a need for certainty. Clearer defined rules of the road that would once and for all settle the debate that broadband does operate much better with a light touch regulatory structure along with some basic net neutrality principles that everyone can get behind with the no blocking and no throttling. So what that means to me is the courts and the agencies have been dealing with this issue now since 2005, and it’s really time for Congress to get involved and once and for all settle this debate.

 

Lawrence Spiwak:   Okay. Matt?

 

Matthew Brill:  Well, I agree with all that. And in short, the sky hasn’t fallen. The internet’s working great. Consumers were told there was going to be some disaster after the RIF order. There were a lot of scare tactics. The internet’s better than ever. And under incredible strain during the COVID crisis, our internet services are robust and terrific.

 

      So that doesn’t free us of this political battle. We’re going to be debating classification, I think, until the end of time if there’s no legislation. I remain hopeful that if we can cut through the politics around Title I versus Title II, there is broad consensus on what legislation ought to look like. The industry strongly supports bright line rules against blocking, throttling, and paid prioritization. So if we can find a way post-election to get past the toxicity of some of the debate, I think there is a broad consensus on what the regulatory framework should look like. And if we enshrine it in legislation, we can stop debating classification.

 

Lawrence Spiwak:  Russ?

 

Russell Hanser:  Yeah, I agree with all that as well. The one thing I’ll add that I think I’ve learned recently is that there’s still a great deal of misunderstanding in the public about the issues and about specifically what ISPs’ incentives are and how ISPs are acting. The last thing I was really doing before the COVID clampdown started was going to a couple of states and testifying on some state laws. And of relevance here, there was a Connecticut state law and a Rhode Island state law that were both, in part, net neutrality laws.

 

      And based on the discussions I had, people looked really surprised when I pulled out and gave links to commitments that ISPs had made about what they would not do and how broad those were and how well that regime was working. They were surprised often to heat that there is federal enforcement. If ISPs — I shouldn’t say when because I don't think it’s happened — but if an ISP were to break its commitment, there’s enforcement mechanisms at both the federal and the state level. And there’s just not the bad behavior that we’ve been told time and again for 15 years is going to happen hasn’t happened.

 

      And a lot of people don’t know that, and I think that’s leading to a lot of heat with very little light. So that is all the more reason for clear rules of the road via federal legislation and to end this ping pong and to provide clarity throughout the ecosystem.

 

Lawrence Spiwak:  All right. Well, let’s throw it open, if we have any questions, to the audience.

 

Greg Walsh:  We’ll now go to the first question.

 

Matt Preston:  Yeah, hi there. My name is Matt Preston. I’m a 2L at University of Michigan Law School. Thank you all for your time, coming here today. I just wanted to briefly ask, absent a definitive answer, which doesn’t seem likely from what you’re saying, on the Section 706 interpretation issue, what other, I guess, mechanisms or arguments do you think would be feasible in settling the Title I/Title II debate, either from the agency itself or interested parties?

 

Lawrence Spiwak:  Matt, or -- who wants to take that?

 

Matthew Brill:  It’s Matt. I can try. I mean, I think now that the current FCC took the position that Section 706 doesn’t provide authority for bright line internet conduct rules outside of Title II, we’re really left with a choice of the agency reverting to Title II, which it almost certainly would do in the event Biden wins the election, or Congress, preferably, in my view, coming up with an approach that doesn’t turn on classification. Congress doesn’t need to resolve classification to decide what rules it wants in place.

 

      So it’s really, I think, either sticking with the current light touch approach, reverting to Title II, or legislation that maybe is the best of both with some increased safeguards to enshrine commitments into law but without all of the heavy burdens of Title II, many of which have nothing to do with net neutrality, things like rate regulation, service quality regulation. So those, I think, are the range of options on the table.

 

Russell Hanser:  Yeah, I think that’s right. And to underscore one of the points Matt made, the reason we’re in this classification debate is because these classifications were invented in 1996 when, at least outside of university settings, virtually nobody had broadband other than dial-up. And people weren’t thinking about this. So this is another area why federal -- petitions for federal regulation would be useful because it would get us out of this construct that was never meant to apply to this set of services and has led to lots and lots of angst and also lost of administrative costs on all sides.

 

Lawrence Spiwak:  Kristine, have you got something?

 

Kristine Hackman:  Going back to Russ’s point about why we have this structure, when you look at when Title II came about and Title II regulation, that was in 1934 when there was one monopoly telephone company. And when you look at the broadband market today, we see competition, I think, beyond which even then framers of the 1996 Telecommunications Act rewrite were able to even envision.

 

      So, 100 percent, broadband is essential, and the current climate has really reinforced that. But just because it is essential doesn’t mean that it needs to have this heavy-handed regulation that was really intended when there is not competition in the market. So I think when we’re looking at it, and again, the reason that I agree with Russ and Matt that this is an opportunity for Congress to step in here is we really do have this vibrant, competitive broadband market that has grown up under the 1996 act when broadband has by and large been considered a Title I information service.

 

Lawrence Spiwak:  And just to add one last little thought to that, having written more law reviews on 706 than I care to think about, I think originally, 706, the way that the FCC first started to use it was a form of what I would describe as super-ancillary authority. And that was the roadmap given in the Verizon case. I think, had they stuck to their knitting, they could have done it.

 

      But because they opted for reclassification, I would submit — I wrote a big law review about this called “USTelecom and its Aftermath” — the 706, which is, as the court in Mozilla said, it’s not an affirmative manner of authority, but actually give it more authority than Title II. And it became so abused that I think the current Commission had no choice but to reduce it to being hortatory.

 

      And firms are not passive recipients of regulation. They think part of the problem is you have your choice. You can do Title I or Title II. And there’s no -- it’s either all or nothing. And I think the court -- my own view is like a lot of this could have been solved had the FCC followed the roadmap given by -- it would not have been entirely clean, but at least I think the court back in the Verizon case gave a roadmap. But we are long past that now because this has now just become doctrinal religion.

 

      So any other questions?

 

Greg Walsh:  Looks like we have one final question.

 

Tricia Paoletta:  Hi, it’s Tricia Paoletta from Harris, Wiltshire & Grannis. Thanks. You all have been great. It’s been wonderful. Following up on Kristine’s mention of what might be in congressional legislation, and I guess this is Matthew’s as well, I heard Kristine say there’s consensus on preventing throttling and blocking. I head Matt add paid prioritization, but I know there’s been discussion with 5G and network sizing that that is a form of paid prioritization, or could be. So where is industry on that from your perspective? Thank you.

 

Matthew Brill:  Well, that’s a great question, and a hard question because I think it’s easy to say there’s consensus against blocking and throttling. The companies I represent have run newspaper adds saying that. There’s, I think, a little work to be done on what a ban on paid prioritization looks like. Is it a categorical ban, or a ban on conduct that is anticompetitive or unreasonable, or are we going to let the FTC define what that means? And then there are some other issues that have been fought about for a long time like interconnection. Is the exchange of internet traffic going to be subject to regulation as it was under the Title II order and as it is not at all under the RIF order?

 

      And so it’s not that there’s complete consensus on all this. I think 5G brings additional issues to the table, and then depending on how deep into these issues you go, are we going to have specific federal law on zero rating and other practices like data caps? I think simple is better, and some bright line rules preventing blocking, throttling, and some form of anticompetitive prioritization are sufficient. But we’re sure to have debate about the remaining 10 percent of issues that probably remain subject to good faith disputes.

 

Lawrence Spiwak:  All right. Kristine?

 

Kristine Hackman:  I was going to clarify my perspective was really coming from my membership of wireline providers, Tricia, so it was a great question. And I’m very much closer to the wireline side, which is why I threw out the two examples I did and didn’t get into some of the nuances as Matt described.

 

Lawrence Spiwak:  Russ?

 

Russell Hanser:  Sorry, I was just -- the only thing I want to add is Tricia, your question really highlights another point which haven’t mentioned here but running through the net neutrality debate. Prioritization of one form or another has been a part of virtually every communications protocol we have used in recent years.

 

      And prioritization is a very important part of network management. Your video needs to arrive with a little bit more speed and reliability than your email traffic and so forth. So in any time we talk about prioritization, we do have to talk about the standards that are being used and the protocols that are being used and make sure that we’re drawing very careful lines.

 

Lawrence Spiwak:  And I would add on top of that as much as we would love, it’s become political nomenclature to use the phrase no paid prioritization and no blocking. I think, as all my academic work has shown, I personally think you have a giant constitutional problem. It’s a rate of -- no blocking is a rate of zero. And so how do you get a rate of zero? You just can’t pick a rate. To me, that’s a confiscatory rate. And as Russ said about paid prioritization, even Title II doesn’t go that far under 202. So I think there’s a lot of problems.

 

      And as we all know that once you codify something into law, it could be a very long time before it’s changed. I mean, we’re dealing with a law right now from 1934. I think we need a better standard, which is why, again, I kind of like the idea of the commercially reasonable standard. It’s a little more flexible. The D.C. Circuit came up with in the Data Roaming Order in Cellco is one of my ideas. And a lot of people have had that. But to be continued.

 

      Well, I would like to thank my outstanding panel. This was absolutely fantastic. Matt Brill, Kristine Hackman, Russ Hanser, I want to thank everybody. I also want to thank everybody for tuning in. Hopefully, it was educational. As I think one thing that came out of this, this is certainly to be continued. But we appreciate it, and we look forward to seeing you at the next The Federalist Society teleforum. Thank you so much.

 

Greg Walsh:  On behalf of The Federalist Society, I would like to thank our speakers for the benefit of their valuable time and expertise today. We welcome listener feedback by email at [email protected]. Thank you all for joining us. We are adjourned.

 

[Music]

 

Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s Practice Groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at www.fedsoc.org.