On May 22, 2015, the FCC filed a Petition with the DC Circuit Court of Appeals, signaling its opposition to the May 9^th Petition by Internet service providers (ISPs) and cable companies (Petitioners) seeking a partial stay of the Open Internet Order. 

ISPs and cable companies are requesting a stay of the Commission’s decision to reclassify broadband Internet access service (both wireline and mobile) as a Title II telecommunications service. They also sought a stay of the Commission’s decision to regulate all future carrier behavior on the Internet through its new rule called the “No-Unreasonable Interference/Disadvantage Standard.”

In its Opposition, the Commission claims that the Petitioners have failed to meet the four requirements needed to support a stay. These factors include: (1) whether the stay applicant has made a strong showing that he or she is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) whether the stay meets the public interest. 

The nub of the Commission’s argument is that the partial stay request is completely misleading on it face.  ISPS and cable companies while appearing to support the Commission’s no blocking, no throttling and no paid prioritization (bright-line) rules are actually seeking to kill them.

Petitioners’ stay motion is not what it seems. It asks the Court to halt the application of Title II of the Communications Act to broadband, while allowing three bright-line rules to go into effect. But those bright-line rules are precisely the kind of regulation this Court held could not be applied until and unless broadband was reclassified as a “telecommunications service.” These rules prevent a broadband provider from, for example, blocking political speech it dislikes or providing a level of service that impairs an online video competitor - like Netflix or DISH’s new Sling service - that challenges the provider’s cable TV services. Granting the stay motion would effectively leave the FCC unable to stop these and similar practices (FCC Petition, DC Circuit Case 15-1063 at 3).

Moreover, the Petitioners cannot win on the merits because Title II reclassification is supported by the 2005 Supreme Court decision in the NCTA vs. Brand X case.

Brand X recognized that the Commission has the discretion, exercised in the Order, to divide broadband service into two components: an offering of pure transmission or “telecommunications services,” on the one hand, and a separate offering of “information services” - such as the provision of an email address - on the other.  And Brand X confirmed that the Commission has the authority to set “federal telecommunications policy in this technical and complex area,” and to “consider varying interpretations and the wisdom of its policy on a continuing basis.” (Id. at 4)

Finally, the Commission argues that the Petitioners have utterly failed to demonstrate that they would face irreparable harm if the Order is not stayed.

Petitioners showcase a few broadband providers representing a small percentage of the marketplace to allege that the entire industry will be harmed, yet even these cherry-picked examples fail to demonstrate harm from the Order. Of the 21 declarations from individual companies, six are from fixed wireless companies with a median of 1,100 customers. Nine declarations come from small cable broadband providers with a median of just over 2,100 customers (assuming that all video customers also subscribe to broadband). In addition to serving a small percentage of the marketplace, these fixed wireless, telco, and cable broadband providers overlook the fact that (1) they were subject to the Commission’s “no unreasonable discrimination” rule from 2011 to 2014, apparently without harm, and (2) representatives of nearly 900 other small broadband providers have operated voluntarily under the full panoply of Title II regulations since 2005 (Id. at 5-6).

The Commission does agree with Petitioners that the Court should expedite its decision in this case.

Petitioners filed their opposition to the FCC’s Petition on May 28^th. Now it is up to the Court to issue its decision before June 12.

The main problem with the Commission’s case is that it cannot demonstrate that there are any current adverse impacts on consumers, companies or the Internet itself while it’s no blocking, no throttling and no traffic prioritization rules are not yet in effect. To quote a famous politician, what difference does it make if reclassification is stayed if no one is facing blocked traffic anyway? 

That has always been the major weakness in the FCC’s case – it is implementing a solution to a problem that only hypothetically exists. That is why, if the Court judges this case fairly, the Petitioners stay request will be granted. However, in an age where even the judicial system has become politicized, no one knows whether this case will be judged on its merits or on its political implications.

By Andy Regitsky, CCMI