Verizon Communications Inc. v. FCC (2014)

Last updated

Verizon v. FCC
Seal of the Court of Appeals for the District of Columbia.png
Court United States Court of Appeals for the District of Columbia Circuit
Full case name Verizon Communications Inc. v. Federal Communications Commission
ArguedSeptember 9, 2013
DecidedJanuary 14, 2014
Citation(s)740 F.3d 623 (D.C. Cir. 2014); 11-1355 (2014)
Holding
The FCC does not have the authority to regulate broadband providers as per the FCC's own Open Internet Order. The court vacated in part and upheld in part the FCC Open Internet Order 2010.
Court membership
Judge(s) sittingSenior Circuit Judge Laurence H. Silberman; Circuit Judges Judith Ann Wilson Rogers, David S. Tatel
Case opinions
Majority David S. Tatel, joined by Judith Ann Wilson Rogers
Concur/dissent Laurence H. Silberman

Verizon Communications Inc. v. Federal Communications Commission, 740 F.3d 623 (D.C. Cir., 2014), was a case at the U.S. Court of Appeals for the D.C. Circuit vacating portions of the FCC Open Internet Order of 2010, which the court determined could only be applied to common carriers and not to Internet service providers. [1] The case was initiated by Verizon, which would have been subjected to the proposed FCC rules, though they had not yet gone into effect. [2] The case has been regarded as an important precedent on whether the FCC can regulate network neutrality. [3] [4]

Contents

Background

Back in 2007, the Federal Communications Commission (FCC) censured Comcast for violating the Commission's network neutrality principles when it interfered with its users' access to peer-to-peer networking applications. This resulted in the court challenge Comcast Corp. v. FCC in 2010, in which the U.S. Court of Appeals for the District of Columbia held that the FCC did not have ancillary jurisdiction over the content delivery choices of Internet service providers under the language of the Communications Act of 1934. [5]

In that ruling, the Circuit Court hinted that it would accept separate jurisdictional arguments under other provisions of the 1934 Communications Act or the 1996 Telecommunications Act. [6] This prompted the FCC to establish new rules regarding non-discriminatory delivery of Internet content in late 2010. Because of the ruling in the Comcast case, those new rules were presented in reference to other provisions of the statutes, mostly Section 706 of the 1996 Act, as well as other types of ancillary authority via Titles II and VI of that Act. [7] The updated rules were released in December as the FCC Open Internet Order of 2010. These rules would forbid cable broadband and DSL Internet service providers from blocking or slowing online services or applications. [8] It would also prohibit mobile carriers from blocking VoIP applications such as Skype or blocking websites in their entirely, though those mobile restrictions were fewer than those on cable and DSL. [9]

The industry was unhappy with those new rules as well, with Verizon taking the lead in another court challenge just one month later. [2] Verizon requested judicial review of the 2010 Open Internet Order, again at the Circuit Court for the District of Columbia, with a charge that the FCC had again surpassed its regulatory authority. [10]

Circuit court ruling

The matter of FCC jurisdiction over the content delivery choices of Internet service providers rests on the classification process outlined in the Communications Act of 1934. The Commission determines if a company or product in its regulated industry qualifies as a "telecommunications service", which must follow common carrier rules under Title II of the Act, most notably a requirement to never discriminate against particular content or users; or as an "information service", which must follow much more lenient rules under Title I of the Act. (There are other classifications that are not relevant for the network neutrality dispute.) The court noted that the FCC had already classified cable broadband Internet, and later wireless Internet, as "information services" per this process as far back as 2002. [1]

As noted by the court, its task was "not to assess the wisdom of the Open Internet Order regulations, but rather to determine whether the Commission has demonstrated that the regulations fall within the scope of its statutory grant of authority." [1] The court then deconstructed the FCC Open Internet Order of 2010 into its constituent parts. The court vacated two parts of the order, determining that the FCC did not have the authority to impose network neutrality restrictions without classifying network providers as common carriers. Since the Commission had previously classified broadband providers as "information services" and not as "telecommunications services," such companies could not be ordered to practice non-discrimination under Title II of the Communications Act of 1934. [1]

A different part of the order, in which the FCC ordered all Internet service providers to provide transparent information on their network blocking policies, was upheld by the court because it was not contingent upon operators being classified as common carriers. Additionally, the court found that Section 706 of the Telecommunications Act of 1996 "vests the FCC with affirmative authority to enact measures encouraging the deployment of broadband infrastructure." [1] The court also agreed with the FCC that broadband providers represent a threat to Internet openness and could hinder future development without at least rules similar to those in the Open Internet Order. [11] Thus, the court hinted that the FCC could require Internet service providers to exercise network neutrality by reclassifying them as "telecommunications services" that were in turn required to act as common carriers. [1]

As a result of this ruling, most of the FCC Open Internet Order of 2010 was invalidated and vacated as a violation of the Commission's authority under the 1934 and 1996 Acts. The exception was the transparency provision.

Concurring/dissenting opinion

Judge Laurence H. Silberman wrote his own opinion, concurring in part and dissenting in part. Silberman was in general agreement with the majority that the FCC Open Internet Order of 2010 "impermissibly subjects broadband providers to treatment as common carriers." [1] Of significance is Silberman's statement that the FCC has the authority to take "measures that promote competition in the local telecommunications market or other regulating methods that remove barriers to infrastructure investment." This has been interpreted to mean that the FCC has the authority to challenge state laws restricting municipal broadband, which became controversial in the following years. [12] [13]

Reactions

Industry developments

Immediately following the decision, several major telecommunications firms issued statements agreeing with the ruling. For example, Verizon stated the ruling will result in more innovation and more choice for consumers. AT&T stated that their commitment to network neutrality will not diminish. Time Warner Cable stated that their commitment to deliver the best service will not be compromised. [14] As part of the Comcast/NBC merger, Comcast was required to follow the FCC Open Internet Order of 2010 for seven years. The company reiterated this commitment after the trial. [15]

Shortly after the ruling, Netflix updated its ISP speed rankings with data showing that average access speed via Verizon FiOS traffic had dropped between December 2013 and January 2014, just before the ruling. [16] Ars Technica found this to be suspicious. [17] Pointing to Netflix's performance change, several news outlets pointed out that the battle over non-discriminatory Internet access began to shift from network neutrality frameworks to private peering deals between service providers, which had not been covered by the FCC Open Internet Order of 2010. [17] [18] [19]

Academic and news commentary

Multiple news outlets claimed that the Verizon ruling was the death of network neutrality in the United States. [20] [21] [22] [23] [24] Since the court upheld the FCC's authority to regulate broadband providers to encourage nationwide broadband deployment, agreeing with the Commission's interpretation of Section 706 of the 1996 Telecommunications Act, some legal observers believed this should allow the FCC to reclassify broadband providers as "telecommunications services" and therefore subject them to common carrier regulations. [20] Legal scholar Annemarie Bridy predicted that the case would force the FCC's hand in reclassifying broadband providers as "telecommunications services," [25] something which the FCC had thus far resisted doing. Legal scholar Susan P. Crawford wrote that the FCC should move to regulate broadband providers as common carriers in order to preserve network neutrality in the United States. [26]

In response to the FCC's decision to not appeal the Verizon ruling but to establish new rules, James P. Tuthill, an attorney and lecturer at UC Berkeley School of Law, criticized the decision as the agency could have appealed to the Supreme Court, and that court would likely accept the case because of the significance of the issues and per a direct request by a federal agency. He also predicted that even if the FCC proposed new rules, they would be challenged by the industry and overturned based on the unchallenged Verizon precedent, so "simply calling a rose by another name will not change what it is, and the courts won't buy it." [27]

Other commentators had mixed reactions to the ruling. April Glaser, a staff activist at the Electronic Frontier Foundation, noted that the ruling could significantly restrict the FCC's potential approaches toward network neutrality regulation. [28] Conversely, others believed that the ruling gave the FCC too much power, to the point at which it could restrict innovative network management strategies by ISPs that might be requested by users. [29]

Public and government reactions

In January 2014, in response to the ruling, a campaign was launched on the White House's petition site, urging President Barack Obama to direct the FCC to reclassify ISPs as common carriers. The petition received more than 105,000 signatures. The Obama administration replied to the petition, stating that although the President "vigorously supports" a robust, free, and open Internet, he was not able to direct the FCC to do anything because the FCC is an independent agency. [30]

In February 2014, Tom Wheeler, then chairman of the FCC, issued a statement responding to the court's decision and laying out the Commission's intentions for the future of network neutrality. Wheeler stated that the Commission would not appeal the Verizon ruling, but would take the court's advice on reclassification of Internet service providers in the interests of non-discriminatory content delivery. [31] [32] The FCC then opened a new proceeding asking for public comment, [33] and in April the Chairman announced that he would be circulating a draft network neutrality-oriented Notice of Proposed Rulemaking on the matter. [34] [35] [36]

In 2015, the FCC reclassified Internet service providers as "telecommunications services" under the Communications Act of 1934, as had been suggested by the judges in the Verizon ruling. [37] This led to yet another Circuit court challenge from the industry, United States Telecom Association v. FCC , in 2016.

Related Research Articles

<span class="mw-page-title-main">Federal Communications Commission</span> Independent U.S. government agency

The Federal Communications Commission (FCC) is an independent agency of the United States government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisdiction over the areas of broadband access, fair competition, radio frequency use, media responsibility, public safety, and homeland security.

<span class="mw-page-title-main">Internet service provider</span> Organization that provides access to the Internet

An Internet service provider (ISP) is an organization that provides services for accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise privately owned.

<span class="mw-page-title-main">Net neutrality</span> Principle that Internet service providers should treat all data equally

Network neutrality, often referred to as net neutrality, is the principle that Internet service providers (ISPs) must treat all Internet communications equally, offering users and online content providers consistent rates irrespective of content, website, platform, application, type of equipment, source address, destination address, or method of communication.

<span class="mw-page-title-main">Xfinity</span> American cable provider

Comcast Cable Communications, LLC, doing business as Xfinity, is an American telecommunications business segment and division of Comcast Corporation used to market consumer cable television, internet, telephone, and wireless services provided by the company. The brand was first introduced in 2010; prior to that, these services were marketed primarily under the Comcast name.

National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005), was a United States Supreme Court case in which the court held that decisions by the Federal Communications Commission on how to regulate Internet service providers are eligible for Chevron deference, in which the judiciary defers to an administrative agency's expertise under its governing statutes. While the case concerned routine regulatory processes at the FCC and applied to interpretations of the Communications Act of 1934 and Telecommunications Act of 1996, the ruling has become an important precedent on the matter of regulating network neutrality in the United States.

<span class="mw-page-title-main">NCTA (association)</span> American telecommunications organization

NCTA – The Internet & Television Association, formerly known as the National Cable & Telecommunications Association (NCTA), is a prominent trade association representing the American broadband and cable television industries. As of 2011, the NCTA represented more than 90% of the U.S. cable market, over 200 cable networks, and various equipment suppliers and service providers to the cable industry.

In the United States, net neutrality, the principle that Internet service providers (ISPs) treat all data on the Internet the same, and not discriminate, has been an issue of contention between network users and access providers since the 1990s. With net neutrality, ISPs may not intentionally block, slow down, or charge money for specific online content. Without net neutrality, ISPs may prioritize certain types of traffic, meter others, or potentially block traffic from specific services, while charging consumers for various tiers of service.

<span class="mw-page-title-main">Internet in the United States</span> Overview of the Internet in the United States of America

The Internet in the United States grew out of the ARPANET, a network sponsored by the Advanced Research Projects Agency of the U.S. Department of Defense during the 1960s. The Internet in the United States in turn provided the foundation for the worldwide Internet of today.

<span class="mw-page-title-main">Julius Genachowski</span> American lawyer and businessman

Julius Genachowski is an American lawyer and businessman. He became the Federal Communications Commission Chairman on June 29, 2009. On March 22, 2013, he announced he would be leaving the FCC in the coming weeks. On January 6, 2014, it was announced that Genachowski had joined The Carlyle Group.

<i>Comcast Corp. v. FCC</i> 2010 US Court of Appeals for the District of Columbia case

Comcast Corp. v. FCC, 600 F.3d 642, is a case at the United States Court of Appeals for the District of Columbia holding that the Federal Communications Commission (FCC) does not have ancillary jurisdiction over the content delivery choices of Internet service providers, under the language of the Communications Act of 1934. In so holding, the Court vacated a 2008 order issued by the FCC that asserted jurisdiction over network management policies and censured Comcast from interfering with its subscribers' use of peer-to-peer software. The case has been regarded as an important precedent on whether the FCC can regulate network neutrality.

<span class="mw-page-title-main">Marvin Ammori</span> American activist and lawyer

Marvin Ammori is an American lawyer, civil liberties advocate, and scholar best known for his work on network neutrality and Internet freedom issues. He currently serves as Chief Legal Officer of Uniswap.

The Federal Communications Commission Open Internet Order of 2010 is a set of regulations that move towards the establishment of the internet neutrality concept. Some opponents of net neutrality believe such internet regulation would inhibit innovation by preventing providers from capitalizing on their broadband investments and reinvesting that money into higher quality services for consumers. Supporters of net neutrality argue that the presence of content restrictions by network providers represents a threat to individual expression and the rights of the First Amendment. Open Internet strikes a balance between these two camps by creating a compromised set of regulations that treats all internet traffic in "roughly the same way". In Verizon v. FCC, the Court of Appeals for the D.C. Circuit vacated portions of the order that the court determined could only be applied to common carriers.

Internet bottlenecks are places in telecommunication networks in which internet service providers (ISPs), or naturally occurring high use of the network, slow or alter the network speed of the users and/or content producers using that network. A bottleneck is a more general term for a system that has been reduced or slowed due to limited resources or components. The bottleneck occurs in a network when there are too many users attempting to access a specific resource. Internet bottlenecks provide artificial and natural network choke points to inhibit certain sets of users from overloading the entire network by consuming too much bandwidth. Theoretically, this will lead users and content producers through alternative paths to accomplish their goals while limiting the network load at any one time. Alternatively, internet bottlenecks have been seen as a way for ISPs to take advantage of their dominant market-power increasing rates for content providers to push past bottlenecks. The United States Federal Communications Commission (FCC) has created regulations stipulating that artificial bottlenecks are in direct opposition to a free and open Internet.

Net bias is the counter-principle to net neutrality, which indicates differentiation or discrimination of price and the quality of content or applications on the Internet by ISPs. Similar terms include data discrimination, digital redlining, and network management.

<span class="mw-page-title-main">Ajit Pai</span> American attorney and former FCC chairman (born 1973)

Ajit Varadaraj Pai is an American lawyer who served as chairman of the Federal Communications Commission (FCC) from 2017 to 2021. He has been a partner at the private-equity firm Searchlight Capital since April 2021.

Net neutrality law refers to laws and regulations which enforce the principle of net neutrality.

<i>United States Telecom Association v. FCC</i> (2016)

United States Telecom Association v. FCC, 825 F. 3d 674, was a case at the U.S. Court of Appeals for the D.C. Circuit upholding an action by the Federal Communications Commission (FCC) the previous year in which broadband Internet was reclassified as a "telecommunications service" under the Communications Act of 1934, after which Internet service providers (ISPs) were required to follow common carrier regulations.

"Net Neutrality" is the first segment of the HBO news satire television series Last Week Tonight with John Oliver devoted to net neutrality in the United States. It aired for 13 minutes on June 1, 2014, as part of the fifth episode of Last Week Tonight's first season.

Net neutrality is the principle that governments should mandate Internet service providers to treat all data on the Internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. For instance, under these principles, internet service providers are unable to intentionally block, slow down or charge money for specific websites and online content.

<i>Mozilla Corp. v. FCC</i> 2019 American court case

Mozilla Corp. v. FCC, 940 F. 3d 1 was a ruling the United States Court of Appeals for the District of Columbia Circuit in 2019 related to net neutrality in the United States. The case centered on the Federal Communications Commission (FCC)'s decision in 2017 to rollback its prior 2015 Open Internet Order, reclassifying Internet services as an information service rather than as a common carrier, deregulating principles of net neutrality that had been put in place with the 2015 order. The proposed rollback had been publicly criticized during the open period of discussion, and following the FCC's issuing of the rollback, several states and Internet companies sued the FCC. These cases were consolidated into the one led by the Mozilla Corporation.

References

  1. 1 2 3 4 5 6 7 Verizon v. FCC, 740 F. 3d 623 (D.C. Cir., 2014).
  2. 1 2 "Verizon Sues F.C.C. to Overturn Order on Blocking Web Sites", The New York Times, January 20, 2011
  3. ↑ Speta, James B. (June 2014). "Unintentional Antitrust: The FCC's Only (and Better) Way Forward with Net Neutrality after the Mess of Verizon v. FCC". Federal Communications Law Journal. 66 (3): 491–508 – via HeinOnline.
  4. ↑ Ragha, Nisha (Spring 2015). "The Fall of Net Neutrality: The End of An Era and a Call for Reform". Cardozo Public Law, Policy and Ethics Journal. 13 (2): 559–594 – via HeinOnline.
  5. ↑ Circuit Judge Tatel (April 6, 2010). "Comcast Corp. v. FCC, 600 F.3d 642" (PDF). United States Court of Appeals, District of Columbia Circuit.
  6. ↑ Tatel, Judge. "Comcast Corp. v. FCC, at 30 (D.C. Cir. 2010)" (PDF). United States Court of Appeals for the District of Columbia. Retrieved February 12, 2013.
  7. ↑ "Net Neutrality at the FCC: A Critique of the Legal Reasoning of its Net Neutrality Order". January 10, 2011. Archived from the original on January 17, 2011. Retrieved March 16, 2011.
  8. ↑ FCC. "In The Manner Of Preserving the Open Internet Broadband Industry Practices" (PDF). FCC. Retrieved February 28, 2014.
  9. ↑ "FCC Passes Compromise Net Neutrality Rules", WIRED (December 21, 2010)
  10. ↑ "Verizon Files Appeal in Federal Court Regarding FCC Net Neutrality Order" Verizon's statement (January 20, 2011)
  11. ↑ Kevin, McCarthy. "OLR BACKGROUNDER: APPELLATE COURT DECISION ON NET NEUTRALITY" (PDF). Connecticut Office of Legislative Research. Retrieved February 28, 2014.
  12. ↑ Judis, John (April 30, 2013). "The Next Elizabeth Warren Susan Crawford's crusade against lousy, overpriced Internet providers". New Republic. Retrieved February 28, 2014.
  13. ↑ Brodkin, Jon (February 19, 2014). "FCC thinks it can overturn state laws that restrict public broadband". Ars Technica. Retrieved February 20, 2014.
  14. ↑ Lowensohn, Josh (January 14, 2014). "Comcast, Verizon, and others promise net neutrality ruling won't hurt customers". The Verge. Retrieved February 28, 2014.
  15. ↑ Brodkin, Jon (January 14, 2014). "How the FCC screwed up its chance to make ISP blocking illegal". Ars Technica. Retrieved February 14, 2014.
  16. ↑ Joris Evers (February 10, 2014). "Brazil, Chile Lead In Broadband in Latin America" (Press release). Netflix. Netflix. Retrieved March 18, 2014.
  17. 1 2 Brodkin, Jon (February 10, 2014). "Netflix performance on Verizon and Comcast has been dropping for months". Ars Technica. Retrieved March 18, 2014.
  18. ↑ FitzGerald, Drew; Ramachandran, Shalini (February 18, 2014). "Netflix-Traffic Feud Leads to Video Slowdown". Wall Street Journal. Retrieved March 18, 2014.
  19. ↑ Gustin, Sam (February 19, 2014). "Here's Why Your Netflix Is Slowing Down". TIME. Retrieved March 18, 2014.
  20. 1 2 Brodkin, Jon (January 14, 2014). "Net neutrality is half-dead: Court strikes down FCC's anti-blocking rules". Ars Technica. Retrieved February 14, 2014.
  21. ↑ Wyatt, Edward (January 14, 2014). "Rebuffing F.C.C. in 'Net Neutrality' Case, Court Allows Streaming Deals". New York Times. Retrieved February 14, 2014.
  22. ↑ Fung, Brian. "Federal appeals court strikes down net neutrality rules". Washington Post. Retrieved February 14, 2014.
  23. ↑ Moritz, Scott. "Verizon Victory on FCC Rules Seen as Loss for Netflix". SFGate. Retrieved February 14, 2014.
  24. ↑ Dattaro, Laura (January 15, 2014). "Why the Courts Ruled Against Net Neutrality". Popular Mechanics. Retrieved February 14, 2014.
  25. ↑ Bridy, Annemarie. "Is There a Future for Net Neutrality after Verizon V FCC". Freedom to Tinker. Retrieved February 14, 2014.
  26. ↑ Crawford, Susan (January 15, 2014). "Did the Government Just Break the Internet?". Bloomberg.com. Bloomberg News. Retrieved February 28, 2014.
  27. ↑ Tuthill, James (February 25, 2014). "FCC throws in towel, but public has right to know why". San Francisco Chronicle. Retrieved March 20, 2014.
  28. ↑ Glaser, April (February 25, 2014). "Why the FCC Can't Actually Save Net Neutrality". Electronic Frontier Foundation. Retrieved March 20, 2014.
  29. ↑ Tummarello, Kate (February 25, 2014). "FCC grasps for expanded powers with net neutrality push". The Hill. Retrieved March 20, 2014.
  30. ↑ Musil, Steven (February 18, 2014). "White House says it won't direct FCC to reclassify broadband". CNET. Retrieved March 18, 2014.
  31. ↑ Wheeler, Tom. "STATEMENT BY FCC CHAIRMAN TOM WHEELER ON THE FCC'S OPEN INTERNET RULES FEBRUARY 19, 2014". FCC. Retrieved February 20, 2014.
  32. ↑ Brodkin, Jon (February 19, 2014). "FCC won't appeal Verizon ruling, will regulate 'Net on "case-by-case basis"". Ars Technica. Retrieved February 20, 2014.
  33. ↑ "New Docket Established to Address Open Internet Remand". Federal Communications Commission. February 19, 2014.
  34. ↑ "Setting the Record Straight on the FCC's Open Internet Rules". Federal Communications Commission. April 24, 2014.
  35. ↑ "May 2014 Open Commission Meeting". Federal Communications Commission. November 25, 2013.
  36. ↑ "FCC ANNOUNCES TENTATIVE AGENDA FOR MAY OPEN MEETING" (PDF). Federal Communications Commission. April 24, 2014.
  37. ↑ Ruiz, Rebecca R.; Lohr, Steve (February 26, 2015). "F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility". The New York Times. ISSN   0362-4331 . Retrieved November 6, 2022.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.