Appeals court registers concerns about FCC 'net neutrality' order

A three-judge federal appeals court panel wrestled today with whether the transmission of data and the manipulation of it by a website are an “inextricably" linked or potentially divisible component of broadband service, a distinction upon which the Federal Communications Commission’s net neutrality policy may live or die.

During more than four hours of oral argument at the US Court of Appeals for the DC Circuit in Washington, however, the issue of public safety, and whether the FCC’s decision last year to discard net neutrality rules could harm communications by local governments and emergency services, emerged as a serious concern for US Circuit Judges Patricia Millett and Robert Wilkins.

Meanwhile, the third judge on the panel, US Circuit Judge Stephen Williams, aimed a series of critical questions at five groups of petitioners who are seeking to restore the FCC’s 2015 “Open Internet Order,” which classified fixed and wireless consumer broadband services as more tightly regulated “common carrier” services regulated under Title II of the Communications Act.

Williams noted that while the DC Circuit had affirmed the 2015 order the following year that consumer broadband could be classified as a telecommunications service, it didn't mandate that interpretation of federal law.

In the FCC’s 2018 decision to roll back rules against the blocking or throttling of Internet content, relying on antitrust and consumer protection enforcement by the Federal Trade Commission to police abuses by Internet service providers, a group of local and state governments told the appeals court the FCC had left them defenseless from decisions by ISPs to favor the traffic of better-paying customers.

The FCC's “Restoring Internet Freedom” order replaced those specific prohibitions with transparency requirements that ISPs report any time they block or slow content, or impose fees for faster connections, a policy called “paid prioritization.”

Danielle Goldstein, a lawyer representing Santa Clara County, California, told the judges today that net neutrality “harms in public safety truly are irreparable,” and that an FTC antitrust or consumer protection investigation “can’t bring back a life or a home” lost to a fire or other emergency because of communications problems.

“The transparency rule isn’t responsive to public safety concerns at all,” Goldstein told the judges.

That was an argument that appeared to hit home with Millett, who spent nearly 30 uninterrupted minutes firing tough questions at Tom Johnson, the FCC’s general counsel. Several of those questions revolved around why the FCC rulemaking process that led to the 2018 order never studied in detail how the net neutrality change could harm firefighters, public health teams or other public safety services. “That, unless I missed it, is not in your order,” Millett told Johnson.

“The burden ought to be on them to show concrete harm,” Johnson answered, prompting an apparently incredulous Millett to snap back: “Why should the burden be on them?”

After pushing Johnson to confirm that paid prioritization services could be created and sold by ISPs under the new rules, as long as they were properly disclosed, Millett said she was concerned about the impact of paid prioritization service on public safety service.

“If local governments can’t afford to pay for this for their firefighters” and other emergency services, Millett wondered, “how does that help them?”

Millett said she wanted to see that the FCC had at least studied the public safety question. “I’m trying to see that the commission either said, ‘That won’t happen,’ or ‘it’s OK if that happens.'” She did not get a clear answer to that question.

Millett and Wilkins also said they are concerned about whether the pre-emption section of the Restoring Internet Freedom order, which blocks states or local governments from imposing net neutrality rules, could impact public safety.

Steven Wu, a lawyer arguing for the New York attorney general, told the judges the FCC was legally inconsistent in declaring that it lacked the authority to regulate broadband as a Title II common carrier, but deciding in the same order that it could block states from passing laws against blocking, throttling or paid prioritization. The California legislature passed such a net neutrality law last year, only to see it challenged in federal court by the US attorney general.

“When federal power is withdrawn, it is done without prejudice to states acting in that area,” Wu said.

Wilkins raised the hypothetical of whether the FCC pre-emption rule would prevent New York or other states from passing a law prohibiting ISPs from throttling services for firefighters.

“It would depend on the facts of the case,” Johnson said.

“Your order would seem to prohibit that,” Wilkins said.

The FCC under Republican leadership last year declared that wired consumer broadband services are a less-heavily regulated “information service” as defined under Title I of the Communication Act. Because the transmission of data though an ISP is “inextricably linked” to a website or app, both of which are defined as information services, the offering of an ISP is also an information service, the FCC said.

The FCC made a public policy decision, FCC lawyers told the circuit judges, that the threat of blocking and throttling was less than the slowdown in broadband network investment because of tighter Title II regulations. “The Title II rules were depressing innovation and investment,” Johnson told the judges.

“There is not a track record of ISP misconduct, at all, in the past 12 years,” another FCC lawyer, Jon Nuechterlein, told the judges.

The petitioners contesting the 2018 order include a collection of states and local governments; a group of Internet companies including Mozilla, Vimeo and Etsy; and a selection of public interest groups including Public Knowledge and the Hispanic Media Coalition.

They were pushing five key arguments today, including that the transmission of data through an ISP, and the manipulation of that data through a website or app, are divisible components. That would negate the FCC’s argument that those things can’t be separated, and that both are therefore Title I “information services” under federal law.

In addition to their argument that the FCC had failed to properly study public safety questions, the petitioners said the FCC never studied whether antitrust or consumer protection law would be sufficient to protect net neutrality.

Under the Administrative Procedure Act, or APA, “my point is that thy were compelled to perform a reasonable analysis, and they just didn’t,” said Kevin Russell, a lawyer representing Public Knowledge. “They failed to analyze whether antitrust law will do anything to rectify that.”

It was a point that Millett picked up on. “What would a court have to do to decide whether the expression of antitrust law is insufficient” to protect net neutrality? she asked.

“It’s an APA problem for an agency not to give an adequate explanation" of its order, Russell answered, “even if it is right.”