FCC Chairman Tom Wheeler issued a statement on February 19 announcing that the FCC will not appeal a January 14 court decision from the D.C. Circuit Court of Appeals striking down most of the FCC’s net neutrality rules (see Edwards Wildman Client Advisory, January 2014 – D.C. Circuit Strikes Down Net Neutrality Rules, Affirms FCC Has Limited Authority to Regulate Broadband). Instead, Chairman Wheeler indicated that the FCC will revisit the entire issue by opening a docket titled “Protecting and Promoting the Open Internet” intended to lead to the adoption of new rules designed to withstand the expected legal challenges.

Chairman Wheeler elaborated upon three principles the FCC will use to guide its consideration and adoption of such new rules.

  • Enhancing the transparency rule requiring that network operators more fully disclose how they manage network traffic. The transparency rules survived the D.C. Circuit’s January decision. Chairman Wheeler now indicates that the Commission will try to build on that victory by strengthening and enhancing these rules, with the stated purpose of ensuring that users, and especially edge providers, have access to “the technical information they need to create and maintain their products and services as well as to assess the risks and benefits of embarking on new projects.” 
  • Reviving the no blocking rule. The D.C. Circuit struck down this rule as an improper per se common carrier regulation outside of the Commission’s jurisdiction when regulating a service, such as broadband Internet, which the Commission had not first determined was subject to the common carrier provisions of Title II of the Communications Act. Notably, Chairman Wheeler reserves the right to reclassify Internet access service as a Title II telecommunications service if necessary to survive another jurisdictional challenge. 
  • Reconsidering the non-discrimination rule consistent with Section 706 of the Communications Act, including possibly “(1) setting an enforceable legal standard that provides guidance and predictability to edge providers, consumers, and broadband providers alike; (2) evaluating on a case-by-case basis whether that standard is met; and (3) identifying key behaviors by broadband providers that the Commission would view with particular skepticism.”

In essence, Chairman Wheeler is attempting to resurrect the substance of the stricken rules, while seeking to shore up their legal basis. This would be the FCC’s “third bite at the apple” after the D.C. Circuit first rejected the FCC’s claims of legal authority to enforce its net neutrality “policy statement” in the court’s 2010 Comcast decision and then rejected some of the FCC new claims of authority under Section 706 in the recent Verizon decision. In Verizon, the D.C. Circuit opened the door to reviving the stricken rules by finding that Section 706 grants the FCC some unspecified amount of authority to implement rules that promote competition and encourage broadband deployment. It is likely that the FCC will ask for comment on the scope of its authority in light of that decision.

Chairman Wheeler also mentioned several other approaches that the FCC will pursue to maintain net neutrality. First, the FCC will investigate how competition in the Internet access market might be enhanced, with a particular focus on removing barriers to municipal broadband deployment. Second, the FCC will take up Internet service providers on their commitment to preserve net neutrality despite the D.C. Circuit decisions. Finally, the FCC will continue to evaluate whether reclassification of Internet access services as Title II telecommunications services is warranted.

In addition to his statement, the Chairman released a “Fact Sheet” showing how investment in mobile, broadband, and Internet-based businesses has grown since the FCC’s first net neutrality policy statement in 2005. FCC Commissioners Clyburn and Rosenworcel expressed support for Chairman Wheeler’s initiative, while Commissioners Pai and O’Rielly were skeptical that any new rules are needed or would be more successful at withstanding judicial scrutiny.