A recent case was decided in the United States Court of Appeals for the District of Columbia Circuit that is creating ripples throughout the realm of administrative and utility law. It was a direct response to the Federal Communications Commission (“FCC”) adoption of the “2015 Open Internet Order.” This order reclassified broadband internet from an “information service” to a “telecommunication service” under the Telecommunications Act of 1996. U.S. Telecomm. Ass’n v. Fed. Commc’n Serv., 825 F.3d 674, 678 (D.C. Cir. 2016). This is a major step in broadband regulation because telecommunication services are subject to common carrier regulation under the Telecommunication Act. Id. The 2015 Open Internet Order consisted of three components: 1) Commission reclassified both fixed and mobile broadband as telecommunications services, 2) the commission forbears to include certain parts of the Telecommunications Act that it saw unnecessary, and 3) the commission promulgated five open internet rules that applied to both fixed and mobile broadband services. Id. at 687.
Three separate groups of petitioners, including U.S. Telecommunications Association, argued against the FCC’s reclassification. The DC Court of Appeals turned to the Chevron 2-part test of statutory interpretation to see if the FCC’s 2015 Open Internet Order is constitutional under the Telecommunications Act. Id. at 699. First, the court asked whether Congress has directly spoken to the precise question at issue and if it is clear then that is the end of that matter. U.S. Telecom Association, 825 F.3d at 699. If the Telecommunications Act of 1996 is silent or ambiguous, then the question is whether the agency’s answer is based on a permissible construction of the statute. Id. The court held that the statute was ambiguous but the agency’s answer is based on a permissible construction of the statute. Id. at 700. Furthermore, the court upheld the FCC’s decision to regulate on a “case-by-case basis” under the act. Id. at 709.
It will be interesting to see how the FCC regulates broadband services on such a basis. The idea of regulation by a federal agency within a particular field on a “case-by-case” basis falls within the constitutional law theory of conflict preemption. If a state determines to regulate broadband internet outside the scope of the FCC’s 2015 Open Internet Order, it appears that the FCC will attempt to strike it down. But there are still many questions that have yet to be answered. Have individual State’s already started to regulate broadband internet providers? Are they in line with the FCC’s Open Internet Order? How much power do individual states have to regulate broadband providers? What are the types of State regulation schemes that conflict with the FCC’s Open Internet order? These questions seem to be unanswered in this unsettled area of the law.