Supreme Court Should Free the Internet From the FCC

The Federal Communications Commission, at least under previous chairmen, desperately wanted to control the internet. To further this objective, the FCC reversed its prior determination that providing broadband internet access was an “information service,” rather than a “telecommunications service,” under Title II of the Communications Act of 1934, thereby granting itself more power. The commission also determined that Section 706 of the Telecommunications Act of 1996 constituted an independent grant of regulatory authority over the internet. Relying on both these interpretations, the FCC then sought to outlaw paid prioritization—to institute “net neutrality”—by issuing a new policy cloaked in an Orwellian title; the “Open Internet Order.”

Despite its label, the order actually had the practical effect of closing the internet to Daniel Berninger’s new start-up, Hello Digital, a social media platform designed to allow users to discuss issues featured on the site in real time. The website’s high-definition voice feature would require that its content be prioritized to function properly, so when the FCC’s order prevented Berninger from paying for that priority, he was left with little choice but to sue. In deciding the case, the U.S. Court of Appeals for the D.C. Circuit ruled for the commission after granting so-called Chevron deference to the FCC’s statutory interpretations. (Under Chevron U.S.A. v. Natural Resources Defense Council, if an agency is charged with administering an ambiguous statute, courts will defer to that agency’s interpretation as long as it is deemed a “permissible construction.”)

But when Congress passed the 1996 Act, it directed that only some of that law’s provisions be inserted into the FCC-administered Communications Act of 1934. One such addition was Section 230, which specifically said that “[i]t is the policy of the United States … to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation.” Section 706, however, was noticeably absent from congressional inclusion into the original 1934 Act. Furthermore, there’s no evidence that Congress meant to give the FCC regulatory authority over Section 706, a fact that the FCC itself recognized until 2010. Finally, the FCC’s purported limitations on its own regulatory authority under the provision are practically meaningless. These illusory limits basically amount to: (1) we will only regulate communications by radio or wire (but the internet uses wires); (2) we will only issue rules designed to encourage broadband deployment (but courts should just take our word for it when we claim this is our purpose); and (3) we will not create rules that conflict with the 1934 Act (even though Congress decided not to make Section 706 part of that law in the first place).

Because Section 706 was never meant to be administered by the FCC and the agency believes its authority is subject to virtually no practical constraints, Cato has joined the Competitive Enterprise Institute, Reason Foundation, and Individual Rights Foundation on an amicus brief urging the Supreme Court to place the task of interpreting these statutory provisions where it rightfully belongs: in an independent judiciary. Or the new FCC could rescind its previous order and save the Court the trouble.