Industry Groups Lead Net Neutrality Lawsuit Parade

Several wireless and cable industry groups on Tuesday filed lawsuits challenging the Federal Communications Commission’s new open Internet rules.

The lawsuits seek to nullify the new rules on the grounds that the FCC exceeded its authority in making them — most notably by redefining broadband service so it can be regulated like a utility.

In making their move, the CTIA, which represents wireless carriers, and the NCTA and American Cable Association, which represent cable operators, joined USTelecom, a broadband industry trade group, in disputing the new rules in the federal appeals court for the District of Columbia.

Alamo Broadband, a cable provider in Texas, has filed a lawsuit against the rules in the federal appeals court in New Orleans.

“With today’s filing, CTIA seeks to protect the competitive mobile marketplace that thrived under a deregulatory framework for decades,” said CTIA Chairman Ron Smith, who is also CEO of Bluegrass Cellular.

“The FCC’s new Internet rules are full-service regulations that will harm mobile consumers and providers across the country, as well as our nation’s wireless future,” he added.

Support Open Internet

The trade groups have emphasized that they do not oppose Net neutrality. What they object to is the way the FCC seeks to enforce it.

“This appeal is not about Net neutrality but the FCC’s unnecessary action to apply outdated utility style regulation to the most innovative network in our history,” said NCTA President and CEO Michael Powell.

“The FCC went far beyond the public’s call for sound Net neutrality rules,” he added. “Instead, it took the opportunity to engineer for itself a central role in regulating and directing the evolution of the Internet.”

The introduction to the 400-some pages of new rules, which cover both wired and wireless broadband, states the commission’s “carefully tailored rules” will prevent specific practices harmful to Internet openness, such as blocking, throttling and paid prioritization.

The new rules establish a strong standard of conduct designed to prevent the deployment of new practices that would harm Internet openness, as well as enhance existing transparency rules so consumers are fully informed as to whether the services they purchase are delivering what they expect, according to the FCC.

“A lot of the carriers and operators don’t have much of a problem with open Internet principles — it’s just Title II that they have a problem with,” said Doug Brake, a telecom policy analyst at ITIF, the Information Technology & Innovation Foundation.

“It’s a reversal in policy from what we had since the beginning of the Internet,” he told the E-Commerce Times.

Strong Case

In order to create its strong standards, which have been overturned by the courts on two previous occasions, the FCC felt it was necessary to reclassify broadband as a telecommunication service under Title II of the federal Telecommunications Act of 1934, which gives the commission broad powers to regulate services covered by that law.

“I believe the FCC has a strong case in defending its rules and its reclassifcation,” said Christopher Lewis, vice president for government affairs at Public Knowledge.

“The court, in the past, has completely deferred to the agency’s expertise in determining classification,” he told the E-Commerce Times.

“That was the case in 2005 when the FCC approved the change of broadband from Title II to Title I,” Lewis pointed out. “I assume that deference will continue when the FCC changes it back to Title II.”

The NCTA maintains the commission exceeded its authority when writing the new rules.

“Congress clearly intended for the Internet to evolve unencumbered by complex, inefficient government regulations,” said former U.S. Solicitor General Theodore B. Olson, who is representing the NCTA in its suit.

“Instead of letting regulators play the central role in determining how the Internet evolves, they wanted these decisions to be left to the creativity of entrepreneurs, engineers and consumers,” he argued. “The commission’s decision to expand its power and apply heavy regulation has undermined that core principle.”

Back to the Ranch?

Congress’ intention that the government should take a light-touch approach to the Internet is embodied in a 1996 amendment to the Communications Act.

The policy of the United States is “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,” it states.

“That’s not only a light touch — it’s virtually no touch at all,” Cinnamon Mueller partner Barbara Esbin told the E-Commerce Times.

In addition to the FCC’s authority in adopting its new open Internet rules, its processes are being challenged. In essence, the public wasn’t given a sufficient opportunity to comment on what finally emerged from the commission as new rules, according to opponents.

“It may seem arcane, but the entire purpose of notice and comment rulemaking is for an agency to lay out clearly enough what it’s thinking of doing in order to draw feedback that’s specific to its proposal,” explained TechFreedom President Berin Szoka.

“What the FCC did was not adequate to ensure that the people commenting on the proposal really knew what the FCC was planning to do,” he told the E-Commerce Times.

While much attention is being focused on Title II and reclassification, the notice objection could send the whole Net neutrality issue back into the FCC’s lap again.

“It’s the most likely grounds for resolving this entire case,” Szoka said, “which means the whole thing will start all over again, most likely in May or June of next year.”