FCC Launches Proceeding to Rollback Net Neutrality

by Perkins Coie

Perkins Coie

New developments: Since we published our update below, the FCC has adopted a Notice of Proposed Rulemaking to begin the process of rolling back the rules and regulatory framework for net neutrality. The 2-1 vote came after the FCC received over 1 million comments on the proceeding, even before the proposal was formally offered to the public. As noted below in our May 1, 2017 update, the FCC is proposing to reverse the Title II classification of Broadband Internet Access Service (BIAS) and revert to a Title I classification, one that has been previously found to be unable to support net neutrality enforcement actions.

In addition, the full U.S. Court of Appeals for Ninth Circuit recently agreed to rehear an earlier decision by a three-judge panel on that court determining that the FTC lacks jurisdiction over non-common carrier activities performed by common carriers. The en banc panel said the prior decision, discussed below, can no longer be cited as precedent while the rehearing is pending.

Original client update:

FCC Chairman Ajit Pai has waded back into the shark-infested waters of net neutrality by releasing a draft NPRM proposal to reverse the FCC’s recently upheld consumer protection rules prohibiting Broadband Internet Access Service (BIAS) providers from treating online content, apps, connected devices and services in a discriminatory manner. Under a new FCC procedure, the draft NPRM is essentially a non-binding sneak preview of the NPRM prior to its full vote by the FCC’s commissioners in the 2017 May Open Commission Meeting. 

Shortly after Pai released the draft NPRM, the U.S. Court of Appeals for the District of Columbia Circuit denied the petitions to rehear en banc its 2016 decision in U.S. Telecom Association v. FCC that affirmed the FCC’s 2015 Open Internet Order. The en banc denial starts the 90-day clock for petitions seeking U.S. Supreme Court review, although it is unclear if any such petitions will be pursued in light of Chairman Pai’s stated intention to repeal the FCC’s 2015 net neutrality rules at issue. In fact, Chairman Pai released a statement shortly after the D.C. Circuit’s denial of the rehearing petitions in which he described that denial as confirming that “the FCC has the authority to classify broadband Internet access service as an information service,” as Pai proposes to do, and he confirmed that “the Commission on May 18 will begin the process of repealing the FCC’s Title II regulations.”

A Contentious History

Net Neutrality has taken a long and winding road, and the end may still not be in sight. 

The FCC’s first efforts to articulate consumer rights to access online content, apps, devices and services of their choice began in 2005 when the FCC adopted an Internet Policy Statement with voluntary guidelines for the practices of BIAS providers. The Internet Policy Statement itself was adopted in response to the Supreme Court’s Brand X decision affirming the FCC’s prior deregulation of BIAS by reclassifying its transmission component as part of an integrated “information service” under Title I of the Communications Act. When the FCC sought to enforce the Internet Policy Statement a few years later, however, the D.C. Circuit vacated that enforcement action. In response, the FCC adopted binding net neutrality rules in 2010 without changing the Title I regulatory classification of BIAS. Upon review, the D.C. Circuit found in 2014 that the agency’s rules improperly treated BIAS providers as “per se common carriers” without first reclassifying BIAS as a telecommunications service under Title II of the Communications Act.

Having been stung by the appellate court twice, in 2015 Chairman Wheeler decided to follow the D.C. Circuit’s legal roadmap by reclassifying BIAS as a Title II telecommunications service in its 2015 Open Internet Order. In taking this action, the FCC also employed the concept of “forbearance” to enact the more lenient Title II regulatory framework that has long applied to mobile wireless telecom services, rather than the full panoply of Title II obligations, such as tariffs and rate regulation, that historically applied to landline telephone communications. Those actions were vociferously opposed by Commissioner O’Rielly and then-Commissioner Pai, in a preview of the current effort to roll back the 2015 Order.

Proposed Rollback of Net Neutrality

Chairman Pai’s current draft NPRM sharply criticizes the 2015 Open Internet Order by arguing it has caused a decline in broadband infrastructure investment and jobs, and stifled innovation. Under this premise, the draft NPRM proposes to “re-reclassify” BIAS as a Title I information service and thereby effectively jettison the agency’s Title II authority to adopt and enforce net neutrality rules.  

The NPRM also seeks comment on the need for retaining the so-called “bright line rules” of net neutrality—clear prohibitions on blocking, throttling, and “paid prioritization” (i.e., the BIAS provider practice of requiring websites to pay for preferential treatment). It similarly questions the need for the BIAS provider transparency rule that requires disclosure of providers’ network-management practices and performance data, as well as the FCC’s underlying statutory authority for the transparency rule, despite that rule being twice affirmed by the D.C. Circuit. The draft NPRM also questions the utility of the FCC’s enforcement regime and its authority to oversee the business-to-business interconnection of BIAS and common carrier networks.

Finally, the draft NPRM also proposes to “return” authority to the Federal Trade Commission to “police the privacy practices of Internet service providers.” As we have previously noted, however, the FTC’s jurisdiction over broadband privacy is uncertain, and “re-reclassifying” BIAS as a Title I service would not fully cure what caused the U.S. Court of Appeals for the Ninth Circuit to find that the FTC lacks jurisdiction over common carriers under the FTC Act in the first place. In fact, the AT&T decision arose from facts that predate the FCC’s 2015 Title II reclassification, and concerned the then Title I wireless data services of a mobile wireless carrier that also provided traditional Title II voice telephony service. The Ninth Circuit found that the FTC lacks jurisdiction over common carriers even when the FTC targets its non-common carrier services. Although the Ninth Circuit’s decision is not binding on other circuits, it is unclear how the FCC’s reclassification of BIAS as a Title I non-common carrier service would restore FTC jurisdiction over the BIAS services provided by common carriers. 

Short of a legislative amendment to the FTC Act (or the overturning of the Ninth Circuit’s decision in AT&T), the reclassification of BIAS as a Title I service would arguably only restore FTC authority over BIAS providers that do not also provide common carrier services, such as certain cable and satellite companies, but would not be applicable to traditional landline and mobile voice providers.  

Perilous Path Forward

The proposed reclassification of BIAS under Title I faces some potential legal hurdles. 

First, the FCC will need to establish a rational basis supporting a dramatic reversal of the agency’s prior findings regarding the broadband industry only two years ago, which included consideration of millions of comments and which were affirmed by the D.C. Circuit less than a year ago. 

Second, if in following the proposed reclassification of BIAS under Title I the FCC hopes to retain some authority to enforce net neutrality-like principles, what is the legal foundation for doing so in light of the D.C. Circuit’s repeated reprimands of such efforts?  

The FCC’s draft NPRM has already drawn passionate praise and criticism from affected industry stakeholders. FCC Commissioner Mignon Clyburn and FTC Commissioner Terrell McSweeny, both Democratic members of their agencies, issued a joint statement calling the proposal “net neutrality in name only.” Indeed, Republican FCC Commissioner Michael O’Rielly recently spoke for many close observers of the net neutrality debate when he stated, “The only way to bring resolution to the net neutrality debate once and for all is for Congress to consider and enact legislation on the subject matter, as it deems appropriate. There can be no lasting peace until that happens … [and] our action in the coming weeks and months will deliver this debate squarely to Congress’ doorstep.” 

In light of the potential perils of the FCC’s new regulatory proceeding, the long and litigious history of net neutrality, and the apparent necessity of new Congressional legislation, it does not appear that the contentious and partisan debate over net neutrality will end any time soon.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Perkins Coie | Attorney Advertising

Written by:

Perkins Coie

Perkins Coie on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.