Verizon and MetroPCS filed their initial brief with the D.C. Circuit in their joint appeal of the net neutrality rules adopted by the Federal Communications Commission in its 2010 Open Internet Order. The briefs kick off the first legal challenge to the net neutrality rules which became effective in late 2011. The FCC is scheduled to respond in September, with final briefs due from the parties in November. The D.C. Circuit is not expected to rule on the appeal until 2013.
As we reported previously, the Open Internet Order focuses on three goals: (1) network transparency; (2) no blocking; and (3) no unreasonable discrimination. Under the rules, both fixed and mobile broadband Internet access providers must disclose the network management practices, performance, and commercial terms of their services. Fixed providers are prohibited from blocking access to all lawful content and services, while mobile providers must not block lawful websites and applications that compete with their services. The “no unreasonable discrimination” provision applies solely to fixed providers, leaving mobile operators free to favor or disfavor certain types of network traffic.
The brief challenges the net neutrality rules on four grounds:
- First, the brief alleges that the rules conflict with the Communications Act by imposing nondiscrimination requirements on fixed broadband Internet access providers. The brief emphasizes the Communication Act’s distinction between traditional “common carriers,” that must provide service to all customers on an equal basis, and private “information services,” such as broadband Internet access, that are normally outside of the FCC’s jurisdiction. The brief notes that the FCC previously refused to impose common carrier-type regulations on information services in order to foster developing technologies.
- Second, the brief alleges that the FCC lacked the statutory authority to adopt the net neutrality rules. The brief highlights the D.C. Circuit’s 2010 decision in Comcast v. FCC, which ruled that the FCC could not rely on its “ancillary” authority under the Communications Act to regulate broadband Internet access providers. The brief argues that the FCC failed to articulate any specific source of authority supporting the net neutrality rules, instead relying on “speculative inferences” rejected in the Comcast decision in support of the rules.
- Third, the brief alleges that the net neutrality rules violate the free speech rights contained in the First Amendment and the property protections set forth in the Fifth Amendment. The brief states that the net neutrality rules eliminate the “editorial discretion” held by Internet access providers to decide the types of speech they will transmit and how they will transmit it as part of their services. Under this view, Internet access providers should enjoy the same level of discretion as newspapers to feature specific content and the FCC should not impose uniform restrictions when customers have numerous outlets to access content on the Internet. The brief also contends that the rules constitute a “per se taking” of broadband Internet access providers’ property by allowing providers of content, applications, and devices to access private broadband networks for free.
- Fourth, the brief alleges that the net neutrality rules are arbitrary and capricious. The brief suggests that the FCC failed to identify any competitive issues in the broadband Internet access market that necessitated industry-wide regulation. The brief argues that the FCC’s concerns of discrimination in Internet access service remain hypothetical and that the net neutrality rules will stifle innovation and harm the public interest.
While Verizon and MetroPCS moved forward with their challenge of the net neutrality order, public interest group Free Press voluntarily withdrew its petition to review the new rules. Free Press previously challenged the exemption for mobile wireless providers from the nondiscrimination provisions of the net neutrality rules.