CINCINNATI (CN) — Multiple internet service provider associations on Thursday called the Federal Communication Commission’s “Open Internet” order a “power grab” that handcuffs their businesses with excessive regulations, arguing before a three-judge panel of the Sixth Circuit.
The providers pulled no punches in their assessment of the Biden administration’s updated regulatory scheme, and said the commission “has asserted total authority over how Americans access the internet.”
In 2015, under then-President Barack Obama, the commission classified high-speed internet as a Title II service under the act, which allowed the industry to be regulated like a public utility to ensure equal access and fair pricing for consumers.
President Donald Trump scrapped the so-called “net neutrality” rules following the 2016 election and reverted to classifying broadband as a Title I service, but the Biden administration reinstated the open internet order.
Both services were codified in the Communications Act of 1934.
Title I services are “information services” that involve a provider manipulating or changing data, subject to fewer government regulations, while Title II includes “telecommunication services” — the simple transmission of data — subject to more stringent regulations.
Tired of a “decade of regulatory whiplash,” the internet providers argue in their brief to the Sixth Circuit that broadband internet is best classified as an “information service,” and emphasized the prosperity that ensued after Trump lifted the order.
“When the commission repealed its last attempt at Title II treatment, its current supporters foretold that the sky would fall. But the opposite happened: Under Title I’s light-touch regime, the broadband industry has thrived, reaching more consumers at faster speeds and lower prices than ever before,” the providers said.
The federal government in its brief to the appeals court describes broadband as a “transmission conduit” that does not alter any information sent or received by consumers, which renders it a Title II telecommunication service.
“Today’s broadband providers are not like a pizzeria that delivers its own pizzas to customers; they are akin to DoorDash or GrubHub, the delivery companies that deliver food from third-party restaurants. Just as those companies pick up and deliver customers’ orders from restaurants, broadband providers offer transmission to and from user-selected websites and applications,” the commission said.
The broadband providers argue the original intent of the 1996 Telecommunications Act requires a minimal amount of government regulation.
U.S. Circuit Judge John Bush, a Donald Trump appointee, was skeptical.
“Does the initial understanding apply here? The internet was a very different animal back then,” he said.
Attorney Jeff Wall of Sullivan and Cromwell LLP in Washington, D.C., represented the providers.
“Congress knew about the internet in 1996, it was a very big and nascent thing back then. It said to the federal government, ‘hands off.’ We want the market to develop it, not the government,” Wall said.
Jacob Lewis, deputy general counsel for the commission, argued on behalf of the federal government and pushed back against his opposing counsel.
“This technology has changed enormously over time, and the history is not as clear as the petitioners would have you believe,” Lewis said.
U.S. Circuit Judge Richard Griffin, a George W. Bush appointee, asked about the major questions doctrine, which requires courts to presume Congress will only delegate expansive power to federal agencies through explicit text in the law.
The government argued the current issue is one of statutory interpretation, and that the doctrine only applies in cases that involve “unexpected issues.”
Griffin was also critical of the commission’s flip-flopping in recent years.
“The changing positions of your client, doesn’t that show the statute is ambiguous?” he asked. “One year it’s this, one year it’s that. Is it clear they have the authority to change the interpretation?”
“The petitioners are confusing the highway with the destination,” Lewis answered. “You expect that when you type in a web address, your request is going to be taken without change. Those websites are the things providing information services.”
Griffin seemed unconvinced, and asked the government’s attorney if the ideal strategy would be to stick to the policy of Congress at the time the act was passed, which stressed “unfettered access” for consumers, free of government regulation.
Lewis countered that Congress also made clear courts were in the best position to determine the definition of the term “telecommunication services.”
In his rebuttal, Wall emphasized the major questions doctrine undoubtedly applies to the current case.
“This is a major question if we’ve ever seen one,” he told the panel. “If one classification is a power grab, and the other is not, it invokes the major questions doctrine.”
The providers’ attorney was adamant the issues of throttling and limited access for consumers are non-existent in the real world, and accused the government of using them as a means to an end.
“This a key for the government to unlock a suite of government powers and use heavy-handed regulations in the industry,” he concluded.
No timetable has been set for the court’s decision.
U.S. Circuit Judge Raymond Kethledge, a George W. Bush appointee, rounded out the panel.