180 pages of analysis includes a 60 page partial dissent

Today the U.S. Court of Appeals for the D.C. Circuit rejected multiple Petitions for Review and upheld the FCC’s Open Internet Order. That order reclassified wired and mobile broadband Internet access services as telecommunications services and subjects providers of those services to several specific new rules and to certain key provisions of Title II of the Communications Act, while forbearing from applying most provisions of Title II. The FCC’s new rules formally took effect in June 2015, so today’s court ruling does not change the status quo.

Until the OIO, the FCC had treated providers of broadband Internet access as largely unregulated information service providers, an approach upheld by the Supreme Court in Brand X. However, relying on a reassessment of the nature of the service, as well as changes in consumer perception since Brand X, the FCC reclassified wired and mobile broadband as a telecommunications service, and included interconnection agreements between ISPs and edge providers within the ambit of the newly-regulated broadband service. Ironically the DC Circuit relied on Brand X to hold that it “was consistent with the statute’s terms for the Commission to take into account the end user’s perspective” in classifying a service as “information” or “telecommunications.” On that point, the DC Circuit agreed with the FCC’s conclusion “that consumers [now] perceive broadband service both as a standalone offering and as providing telecommunications… These conclusions about consumer perception find extensive support in the record and together justify the Commission’s decision to reclassify broadband as a telecommunications service.”

Previously, over the dissent of Justice Scalia, the Supreme Court had affirmed the FCC’s reliance on consumer perception to determine that broadband Internet access was an information service. Whereas the FCC originally viewed DNS and caching as integral parts of broadband services, the FCC now treats them as mere tools to manage the basic Internet access service, which the Commission now treats as telecommunications. The D.C. Circuit affirmed on that point too, finding that “DNS and caching” both “facilitate use of the network without altering the fundamental character of the telecommunications service,” such that the information transmitted itself was accessed by the end-user essentially without alteration.

In affirming the FCC, the Court turned away Petitioners’ legal arguments that the change in regulatory status violated the Communications Act, was without statutory authority, arbitrary and capricious, violated the First Amendment, and impermissibly regulated interconnection agreements between ISPs and edge providers, while at the same time forbore from certain provisions of Title II. The DC Circuit also rejected specific challenges to the rules themselves.

Petitioners could seek rehearing as well as rehearing en banc by all the DC Circuit judges, or seek certiorari in the Supreme Court. We will update you on further developments and also publish a more detailed Advisory on the rules and reasoning of the DC Circuit upholding them.