On December 14, 2017, Federal Communications Commission (FCC) voted to eliminate the robust net neutrality protections put in place by the Obama Administration in 2015. “Net neutrality” refers to the basic organizing principal upon which our internet infrastructure has relied since 2005: the internet, like electricity or phone service, exists as a public utility, and consumers have a right to open and equal access to all internet content.
The FCC’s 2015 rules reinforced the principle of net neutrality by ensuring that all data is delivered to all U.S. consumers at a standard rate. According to these rules, internet service providers such as AT&T, Comcast, and Verizon (known as “ISPs”) cannot block or “throttle” (i.e., slow down) the delivery of disfavored content; nor are they authorized to create so-called “fast-lanes” to distribute content more quickly for companies who pay more. Thus, the current net neutrality protections threatened by Pai’s announcement guarantee a level internet playing field for any company or website regardless of size, resources, or political favor. By contrast, the starkest example of a system without net neutrality, as discussed in a previous blog post, is China’s “Great Firewall”—a domestic internet ecosystem where the government selectively promotes as well as censors content.
The alternative to net neutrality, embraced by the FCC, is a so-called “transparency regime,” which allows companies to block, throttle, and fast-lane preferred content, provided they disclose this anti-competitive behavior somewhere, even somewhere as invisible as a single line buried in the terms of service.
The idea that internet service providers, whether broadband or wireless, may soon be allowed to manipulate what content we consume with only minimal disclosure obligations is deeply alarming. For example, an ISP like Verizon could give its proprietary video streaming service priority while making access to Netflix or Hulu prohibitively slow. Another substantial negative of such a system would be to radically disadvantage small websites and internet startups. If a company doesn’t have the resources to pay for consumers to access its domain through a “fast lane,” it will never be able to challenge established competitors.
Finally, and most frighteningly, the ability to pay to distort what information consumers can access would threaten the integrity of our democratic system perhaps even more than the social media interference we saw in the 2016 election. Equal access to all vendors in the marketplace of ideas under the First Amendment is a bulwark of our political system, and arguably a prerequisite for any functioning democracy. If ISPs gain the authority to promote financially favored and censor disfavored content, the First Amendment’s protections will themselves be jeopardized.
This leads us to the question of whether, assuming the FCC carries out the proposed rule change, a federal court might nonetheless be able to strike it down. The answer is probably yes, on several potential grounds.
One hook for judicial scrutiny involves a portion of the FCC order that proposes to ban states from introducing their own net neutrality laws to replace the repealed federal regulations. While the FCC will likely contend that the order falls within the scope of the federal government’s constitutional authority to regulate interstate commerce, states can potentially claim that the order violates the Tenth Amendment.
The third and most plausible avenue for courts to strike down the proposed rule derives from the fact that the FCC proposes not simply to weaken the existing bans on ISP blocking and throttling, but to dismantle them altogether, despite the fact that our entire internet ecosystem relies on them. The Administrative Procedure Act (APA) restrains federal agencies from making “arbitrary and capricious” rule changes without demonstrable good reason, particularly when the rule in place is widely relied upon. 5 U.S.C. §§ 706 (2)(a)-(f). The Trump Administration’s mere preference for rolling back regulations in order to empower businesses would be a facially inadequate reason.
In fact, the very purpose of the “arbitrary and capricious” provision in the APA was to prevent partisan regulatory oscillations after each election. In its seminal decision in Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co., the Supreme Court held that agencies “must examine the relevant data and articulate a satisfactory explanation for its action,” including a “rational connection between facts and judgment . . . to pass muster under the ‘arbitrary and capricious’ standard.” 463 U.S. 29, 43, 56 (1983). Likewise, the Court declared that “an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.” Id. at 42.
Given that net neutrality policies have been enormously successful according to almost any measure (and overwhelmingly affirmed by bipartisan public opinion), the FCC’s justification to eliminate them—or to reverse course—would have to be far more robust than what the agency has articulated to date.