The battle over Internet regulation will enter its third decade as parties that lost in their original appeal of the FCC’s Restoring Internet Freedom Order (Order) at the DC Circuit Court earlier this year have appealed that opinion. They are requesting a rehearing of the case by the entire Court. The first appeal was defeated 2 to 1 by a panel of three judges.

The new appeal was filed on December 13, 2019, by Mozilla Corporation, Etsy, Incompas, Vimeo, and the Ad Hoc Telecom Users Committee. They were joined by a group of consumer advocates filing separately.

In the disputed Order, the FCC reversed the previous FCC’s Order called “USTA,” and determined that broadband Internet access service (BIAS) is an information service and not subject to onerous telecommunications rules. Using this classification, the FCC determined that the bright-line net neutrality rules of forbidding blocking, degrading or prioritization of Internet traffic were not needed. Instead, the FCC found that a combination of ISP transparency, market pressure and Federal Trade Commission antitrust regulations could successfully police the Internet.

Consumer and state advocates were furious, claiming that the Commission completely abrogated its responsibility and immediately filed an appeal at the DC Circuit. They wanted the Obama-era net neutrality bright-line rules restored and BIAS reclassified as an information service. They lost when two of the three judges seemed to agree with their arguments but concluded they were constrained by the 2005 Supreme Court decision (Brand X) which found that the FCC could lawfully classify BIAS as an information service.

Appellants believe they would have better luck if the full Court hears the case. They make the following arguments to justify a rehearing.

1. The panel’s decision conflicts with the Supreme Court’s 2005 decision in the Brand X case.
   
   First, the Supreme Court’s grant of permission to an agency to do something based on the record before it does not shield forever the agency’s making the same decision on a different record reflecting new or changed technologies.
   
   Second, the Court’s setting aside of the FCC’s reclassification would be perfectly consistent with the functional integration standard announced in Brand X...Indeed, the Brand X court describes presciently the circumstances where the functional integration test would not be met: there is no “functional integrat[ion]” when the telecommunications is “only trivially dependent” on the information service component.
   
   And third, this Court has already interpreted Brand X correctly in USTA, where it approved as reasonable the reverse conclusion reached by the FCC in 2015—the conclusion that DNS and caching are not enough to make an information service out of broadband access. The USTA court did so without fear of running afoul of Brand X. (Mozilla appeal, pp. 9-10.)

DNS is Domain Name System, a function that “matches the Web site address the end user types into his browser . . . with the IP address of the Web page’s host server. Caching allows data storage so that future requests for that data can be served faster.

2. The opinion conflicts with the DC Circuit opinion in 2016 affirming the FCC’s decision at that time to classify broadband Internet access service as a telecommunications service. The Court accepted that decision so how could it violate Brand X now?
    
3. A rehearing is necessary because the 2 to 1 opinion involves an issue of exceptional importance, as it impacts U.S. policies promoting the open Internet, with ramifications for consumers and Internet companies nationwide.
   
   To abolish all net neutrality rules, the FCC found that antitrust and consumer protection laws were sufficient safeguards to deter and police anti-competitive conduct by ISPs. The Panel left no doubt that it did not like what it read in that part of the FCC’s Order, observing that “the Commission’s discussion of antitrust and consumer protection law is no model of agency decision making.” The Panel moreover found that the FCC “failed to provide any meaningful analysis” of whether antitrust and consumer protection laws would “in practice, prevent blocking and throttling.” The Panel also took the FCC to task for “fail[ing] to explain what, if any, concrete remedies might address these antitrust violations.” Id. at 92-93. Still, the Panel found that the FCC “barely survives arbitrary and capricious review” because the FCC “viewed those laws as only one part of a larger regulatory and economic framework” and the agency had not “‘entirely failed to consider an important aspect of the problem. (Id., pp. 19-20).

The DC Circuit will now have to decide if a rehearing should be granted. Since there is so much disagreement on this case, we believe that is likely. Regardless of what this Court decides, final resolution of net neutrality will likely rest with the Supreme Court and is years down the road.

We can only hope that this meandering legal path is preempted by Congress, but that seems more and more an unlikely hope.