Friday morning the D.C. Circuit held nearly three hours of oral argument on the legality of the FCC’s “net neutrality” Order. Although the appeals court will likely end up affirming the rules, all of the judges on the panel seemed receptive to procedural objections raised by the regulated broadband providers. If so, then the court won’t reach the government’s sweeping First Amendment arguments, which apply a Kafkaesque interpretation of the FCC’s Order and claim that the First Amendment doesn’t apply.
Judges Tatel and Srinivasan appeared to generally side with the FCC on the factual and policy matters, with Judge Williams much more skeptical. Early on, most of the discussion focused on whether broadband providers were already offering “common carrier” service to their customers. The FCC had asserted as much in the Order, but Peter Keisler, the broadband provider association’s attorney, claimed that the FCC was merely “deeming” his clients to be providing common carriage, and denied that any were actually acting like common carriers. Judges Tatel and Srinivasan pressed Keisler about the distinction between telephone companies, which are classic “common carrier” telecommunications services, and his clients, while Judge Williams poked holes in the arguments of Jonathan Sallet, the attorney who argued this part of the case for the government.
Most interestingly, the providers’ procedural objections to the net neutrality Order found a very receptive audience in Judges Tatel and Srinivasan, with Judge Tatel particularly interested in whether the FCC had properly given notice about the policy change and the content of the new rules. Sallet repeatedly found himself on the defensive as Judge Tatel grilled him about the whether the regulatory changes matched up with what the regulated providers could have reasonably expected to face. Even if the court ends up deciding that the procedural defects were harmless, I wouldn’t be surprised if the court spends a great deal of time on this issue in its opinion.
At this stage of the litigation, only two parties still maintain their arguments under the First Amendment, Alamo Broadband, Inc. and Daniel Berninger. During the 20 minutes of argument devoted to the First Amendment, Judges Tatel and Srinivasan seemed skeptical that the First Amendment would even apply to broadband providers’ editorial discretion, while Judge Williams was much more sympathetic.
But Judge Srinivasan was also careful to clarify that the court wouldn’t need to reach the constitutional questions if it set aside the net neutrality Order on other grounds, such as the procedural defects that concerned Judge Tatel. Judge Srinivasan also explored whether the Order actually covered broadband providers who wanted to exercise First Amendment-covered control over the content they transmit. The FCC’s lawyer, Jacob Lewis, took up this argument later on by arguing that broadband providers who want to provide access to “some, not substantially all” Internet sites or a “filtered group” would not even be covered by the challenged rules. But Brett Shumate, the attorney for Alamo and Berninger, reminded the panel that that the Order itself indicates that it could apply to nearly any broadband provider who provides Internet access.
Shumate also pointed out that in Turner v. FCC (1994), the Supreme Court distinguished cable providers from traditional common carriers because unlike telephone companies, cable providers exercise no control over private communications made by their customers. Broadband providers, by contrast, have this capability. Judge Tatel objected: Isn’t it true that when people buy broadband, they expect to be buying access to the entire Internet, not the packaged content that they expect to obtain from cable? But Shumate pointed out that any such expectation would be the result of the FCC’s bullying of providers who try to diverge from a “common carrier” approach to broadband, such as by treating different types of traffic differently. The FCC has thus worked hard to prevent providers from exercising the very editorial discretion that the FCC now claims they do not exercise.
I’m not terribly optimistic about the likely panel vote, which I suspect will be 2-1 in favor of sustaining the rules and against application of the First Amendment. Although I was encouraged to see the judges taking such a strong interest in the procedural defects, a victory on that point almost certainly won’t translate into a victory on the First Amendment issue, at least in the court of appeals. But an adverse First Amendment ruling would have the beneficial result of teeing up the issue – and most especially, the government’s extreme position – for Supreme Court review.