Last Friday the DC Circuit heard oral arguments in appeals of the FCC’s decision to classify broadband Internet services as Title II telecommunications services.  The three-judge panel appeared to agree with FCC claims that Title II classification is legally justified, but also sympathized with petitioner’s challenges against other aspects of the FCC order, which include the reclassification of mobile broadband services under Title II and the ban on paid prioritization arrangements. 
Friday’s hearing marked the FCC’s third trip to the DC Circuit in recent years to defend rules that promote net neutrality—i.e., the free flow of lawful web content across broadband networks without the threat of discrimination or other practices that would block, throttle or otherwise impede such traffic.  Responding to concerns raised by the DC Circuit in last year’s remand of the FCC’s 2010 Open Internet order, which had premised the agency’s authority to regulate broadband Internet services on Section 706 of the 1996 Telecommunications Act, the FCC adopted rules in February that reclassified broadband services as telecommunications services pursuant to Title II of the 1934 Communications Act.  The FCC, however, forbore from applying many Title II common carrier regulations to broadband network providers. 

Because consumers cache information from the web for private use on their own home networks, attorneys for the U.S. Telecom Association and other joint industry petitionersadvised the court that broadband services do not fit the definition of a Title II telecommunications service.  Countering, however, that the transmission of information does not equal an information service, Judge David Tatel cast doubt on the petitioners’ claims, explaining: “it seems like [broadband] meets the statutory definition of telecommunications—transmission, between end points specified by the user, of information of the user’s choosing.”  Tatel hinted that the Supreme Court’s 2004 Brand X ruling, which accorded the FCC deference in the regulatory classification of cable modem services, also corresponds to the case at hand.  Judge Steven Williams suggested that the computing and information service aspects of broadband network offerings could fall under the “management” exemption of the definition of information services contained in the Communications Act, which states that information services do not include the use of information service capabilities “for the management, control, or operation of a telecommunications system or the management of a telecommunications service.” 

With respect to paid prioritization, however, Williams voiced concern that the FCC’s ban could wipe out “a lot of perfectly innocent deals” between ISPs and website operators, adding that the FCC could have taken a “less dangerous” path in addressing potential anticompetitive conduct.  Drawing a parallel between paid prioritization arrangements and railroad policies that require customers to pay extra to transport goods in refrigerated cars, Williams observed:  “if you want something special, you pay for something special.”  Williams and both of his colleagues also appeared receptive to petitioner arguments that the FCC erred in reclassifying mobile broadband under Title II because mobile networks are not part of the public switched network that Congress had authorized the FCC to regulate.  Nevertheless, in the event the court upholds Title II reclassification for fixed broadband networks but not for mobile broadband, Judge Sri Srinivasen warned that the court’s ruling could have “practical implications” for consumers who link to the web through a mobile carrier signal but not through a Wi-Fi connection that links to a fixed broadband network, asserting: “where I am in my house determines whether I’m subject to blocking.”