How FCC Data Roaming Order Undermines FCC's Net Neutrality Regulations

The FCC's Open Internet Order is even more likely to be overturned in court than before because the FCC's extraordinary delay in publishing its December net neutrality regulations has oddly moved the FCC's April Data Roaming Order to the front of the line of cases challenging the FCC's overall legal authority to regulate broadband.

• (The April 7 Data Roaming Order was published in the Federal Register 29 days after the decision; the December 21 Open Internet Order may not be published until late summer or fall, 7-9 months after the decision, per Politico's Morning Tech.)

Consequently both cases are now more likely to be heard in the FCC-unfriendly D.C. Circuit Court of Appeals.

• First, the FCC is modifying wireless licenses in the data roaming order and relying on its general Title III licensing authority to do so, while adjudicating licensing issues falls under the exclusive jurisdiction of the D.C. Circuit.
• Second, the data roaming order raises the same fundamental legal question a D.C. Circuit panel unanimously decided in Comcast vs. FCC, which the FCC interestingly did not appeal.
• Finally, sequence, i.e. the order of court precedents being established, matters profoundly in clearly resolving the grand question of whether the FCC has the statutory authority to regulate broadband.

If the FCC has been trying to game the process (as it appears to be on the surface) by on one hand claiming the Open Internet rules are practically operative and enforceable for these several months in 2011, while on the other hand delaying the legal trigger that affords those affected the due process to legally challenge the rules in both Court and in the U.S. Senate, the delaying maneuver appears to have backfired and undercut the FCC's strategy and hope to keep the question of the FCC's overall authority to regulate broadband out of the clearly FCC-unfriendly D.C. Court of Appeals.

• In the end, the FCC's apparent attempt to have it both ways -- i.e. have both de facto and un-contestable net neutrality regulations for an extended period of time -- could have real cost to the FCC's ultimate legal broadband authority.

Most have missed the very important legal significance of Verizon's challenge of the narrow Data Roaming Order to the FCC's signature sector-wide Open Internet Order.

• It is critically important and relevant because both orders at bottom raise the exact same legal authority question: does the FCC has direct statutory authority to price regulate an unregulated information service?

The legal connection/significance was easy for many to miss, because:

• First the data roaming issue practically targeted only two companies, Verizon and AT&T, not the entire broadband industry;
• Second, the AT&T-T-Mobile transaction has distracted and diverted most media and industry attention from the significance of the Data Roaming Order;
• Third, the pretext for the data roaming regulations was a politically positive public narrative of promoting universal broadband coverage by helping politically sympathetic rural carriers, not the negative and highly controversial net neutrality demonization campaign by FreePress et al, of unproven network "discrimination;" and
• Finally there was little to no public analogizing of the data roaming issue to net neutrality, so most people did not catch the arcane but hugely significant legal analogy at work here.

However, just because the politics and media coverage did not connect-the-dots between the Comcast vs. FCC decision, the FCC data Roaming Order, and the FCC Open Internet Order, that does not mean that the legal challenges of the twin broadband price regulation orders won't easily connect-the-dots legally.

As the incisive dissents to the Data Roaming Order by Commissioners' McDowell and Baker exposed, the FCC does not have the sweeping statutory authority to price regulate unregulated broadband information services.

• As Commissioner McDowell dissented: "...my colleagues in the majority are, in essence, imposing a Title II common carrier regulatory regime in violation of Title III of the Communications Act and contrary to Commission precedent."
  • Simply the FCC is ignoring the plain language of the law and ignoring that the FCC decided unanimously just four years ago that wireless broadband is an unregulated information service and that "data roaming must be 'free from common carrier regulation.'"
• As Commissioner Baker dissented: "...in imposing data roaming obligations on mobile broadband services, we exceed our authority and impose rules of common carriage that are impermissible under our statute."

Anyone who reads the law, the FCC's legal analysis and the McDowell/Baker dissents, will see how tortured and inherently self-contradictory the FCC majority's legal defense of the FCC's authority is.

• It is eerily similar to the presumptuous and inherently self-contradictory legal defenses of both the Comcast enforcement decision and the FCC's Open Internet Order.

And if one reads Verizon's Notice of Appeal, and the FCC's data roaming order, which legally depends exclusively on the FCC's Title III radio license authority, it is pretty clear that the FCC's data roaming order, unlike the Open Internet Order, will fall under the D.C. Circuit Court of Appeals exclusive jurisdiction to adjudicate matters involving the modification of wireless radio licenses.

• Thus, it is then more likely that the new D.C. Circuit panel that decides the data roaming order will be more likely to respect the precedent already established unanimously by the D.C. Court of Appeals panel in Comcast vs. FCC, i.e. that the FCC does not have unbounded legal authority to regulate broadband services and prices because that would give the FCC the power to de facto legislate, violating the Constitution's separation of powers doctrine.

For those looking for additional parallels here, the Wiley Rien lawyer, Helgi Walker, that beat the FCC in Comcast vs. FCC, is the same lawyer that will argue for Verizon in both the Data Roaming Order and in the Open Internet Order.

In sum, the FCC's apparent tactical machinations to delay the publication of the Open Internet rules in order to enjoy de facto industry regulation without affording those affected the due process opportunity to legally challenge the net neutrality regulations, ultimately have backfired on the FCC, because the delay now has most likely reordered the legal sequence of how these cases are decided in a manner that strongly disfavors the FCC.

• The law of unintended consequences proves once again it cuts in very unexpected ways.