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09/29/2017

ACA Urges U.S. Supreme Court To Review Flawed FCC Decision Imposing Title II Regulation On Broadband Internet

Court Should Reverse Agency Common Carrier Treatment Of Broadband Internet Service Providers

 

PITTSBURGH, Sept. 28, 2017 - The American Cable Association is urging the U.S. Supreme Court to grant review of a divided D.C. Circuit decision upholding the Federal Communications Commission's decision to reclassify "Broadband Internet Access Service" providers as common carriers subject to heavy regulatory burdens and uncertainty. In doing so, the Court would restore the highly successful light-touch approach to Internet regulation that created a stable environment in which to invest in infrastructure and services and allowed Internet service providers to deploy advanced services across the nation.

The FCC's fundamental alteration of broadband policy - reclassifying broadband Internet service as a telecommunication service under Title II of the Communications Act - came in 2015 in an order that was later affirmed by a panel of the U.S. Court of Appeals for the D.C. Circuit. In a filing today (attached), ACA, through its legal counsel, is asking the Supreme Court to grant review of that decision because of its great practical impact on the broadband industry and independent legal significance, notwithstanding the new FCC's decision to revisit its earlier decision and restore the information service classification.

"The D.C. Circuit erred in upholding the FCC's 2015 Open Internet Order, which should have been overturned because the FCC lacked authority from Congress to subject broadband Internet service providers to common carrier regulation, failed to adequately justify the change from its previous approach, and entirely failed to take into account that broadband providers had relied on decades of FCC precedent that was eliminated in a flash," ACA President and CEO Matthew M. Polka said. "Not only did the FCC fail to point to new factual circumstances to support the conclusion that broadband service had evolved from an information service into a telecommunications service like a plain-old voice line, it admitted it would have imposed common carrier regulation on the service regardless."

The FCC's decision has enormous economic implications - for the American public and providers of Internet access services alike. The agency's actions in converting broadband Internet service into a telecommunications service it could more heavily regulate raises important legal questions about the scope of the authority Congress delegated to the FCC under the Communications Act, including whether the FCC could take that action without explicit authority from Congress. ACA urged the high court to find that, under the "major questions" doctrine, the FCC's authority to resolve ambiguities in statutory language is limited to "interstitial" issues where Congress would expect agencies to fill statutory gaps, and does not extend to fundamental changes except where Congress clearly grants that broader authority.

Under Title II, common carrier rates and practices must be "just and reasonable" and "unjust and unreasonable discrimination in charges [or] practices" is prohibited. Reclassification thus threatens to expose broadband providers to a host of regulatory actions and private litigation, raising the cost to borrow funds and introducing uncertainty as to the legality of services designed to enhance the consumer experience.

FCC's reclassification of broadband Internet service had a particularly dramatic impact on the smallest participants. For example, ACA's members - 750 small and medium-sized providers - sometimes serve as few as 50 customers, often in rural and sparsely populated regions. While providing personalized and innovative services, such smaller entities are singularly ill-positioned to bear the burdens imposed by the FCC's wholesale re-interpretation of the scope of its regulatory authority.

"The FCC's about-face on common carrier regulation and the overhang of potential rate regulation had an immediate and detrimental impact on ACA members, who were forced to shift limited financial resources from forward-looking infrastructure deployment to backward-facing regulatory compliance, impaired their ability to finance their networks and chilled their incentives to deploy new features and services," Polka said. "Removal of this harmful decision will free operators to increase broadband Internet investment, deployment and innovation."

For decades, ACA member companies invested in upgrading their networks, improving their capacity, and expanding their offerings to better serve otherwise difficult to reach businesses and individuals. They were able to do so because, under the FCC's long-standing construction of the statute, their Internet access services were not "telecommunications" or "basic" services subject to onerous common-carrier regulations. Instead, they were "enhanced" or "information" services exempt from those impositions.

The FCC's 2015 about-face, however, subjects these services to common-carrier regulation better suited to 19th century railroad monopolies than to small Internet service providers. While the FCC purported to create a "Modern Title II," forbearing from some statutory requirements, many of the most onerous requirements remain. High court review of this action is necessary to more clearly establish the scope of FCC authority over Internet services under the Communications Act.  

 

About the American Cable Association:  Based in Pittsburgh, the American Cable Association is a trade organization representing about 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/