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Title II reclassification: FCC can't redefine competition as monopoly without being arbitrary/capricious

The discussion at the Federalist Society about former U.S. Solicitor General Greg Garre's excellent legal analysis  (that the FCC does not have the legal authority to promulgate Internet traffic rules), surfaced what I believe to be yet another insurmountable barrier for the FCC to overcome -- beyond the litany of legal barriers outlined by Mr. Garre.

  • FCC reclassification of broadband as Title II common carriage would practically force the FCC to redefine competition in a way that would be arbitrary and capricious. 

Let me explain. 

Public Knowledge's Gigi Sohn laid out  the counter argument to Mr. Garre's analysis that the FCC could reclassify broadband as Title II by simply revisiting the basis for the FCC's 2002 decision and overturning it as wrong on three counts:

  1. Information services and telecommunications services are no longer necessarily intertwined;
  2. Facilities based competition has not arrived;
  3. Consumers are no longer protected. 

Ms. Sohn added this about what the FCC could do: "They just have to give a reasoned explanation. They don't actually have to show that the new decision was better than the old decision." -- per Washington Internet Daily.

  • That sounds a lot like waving a magic wand.

While I think it will be exceedingly difficult for the FCC to argue any or all three of Gigi's points, let me zero in on the competition assessment, which appears to me to be the most vulnerable of all.       

If the FCC were to try and argue fifteen years after the passage of the Telecom Act that facilities based competition has in fact not arrived or that what exists is not sufficient to warrant continuation of the deregulation long since granted, the FCC logically would have to come up with some definition of competition or some new competition standard as a basis to justify their new assessment, (which by the way would be diametrically opposite to the current FCC's implicit and operative competitive standard/assessment.) 

This presents the FCC with a serious dilemma.

  • The purpose of the 1996 Telecom Act was to "promote competition and reduce regulation" because in 1996 communications was a monopoly environment.
    • For over the last decade both the Clinton and Bush FCC's have repeatedly determined that monopoly's don't exist and that the markets are either competitive or on a competitive trajectory based on Telecom Act authority and requirements.
  • For the current FCC to then come along and change the long-standing operative definition/measure of competition to some other new FCC-devised definition/measure not predicated on the Telecom Act, would be a quintessential example of an arbitrary and capricious decision that would not withstand court scrutiny.
    • "A reasoned explanation" almost by definition cannot be "reasoned" if it is arbitrary and capricious.
    • If all the FCC had to do was give reasons they arguably would have boundless authority, which is baldly contrary to our constitutional system of checks and balances of power as Mr. Garre pointed out.

In short, most every indicator of facilities-based competition: choice, value, price, innovation, investment, over most any period the FCC could choose, will show broadband competition increasing/improving over that period. 

  • And the FCC record over the last decade is replete with evidence of that fact.

At core the FCC cannot make up a new definition of competition that effectively rules a non-monopoly market to be a monopoly market without being arbitrary and capricious.  

 

      

 

  

 

 

 

 

 

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