Title II, Round 2

Now that we know the broad outlines of the FCC’s forthcoming open internet order the next phase of the battle over net neutrality rules is getting under way. It will be fought out on at least three fronts: in the courts, on Capitol Hill and within the FCC itself.

The main front will be in the courts, where litigation is all but certain to be filed challenging the commission’s decision to reclassify broadband access as a Title II telecommunications service, probably by AT&T, just as soon as the new rules are formally published in the Federal Register. AT&T has already telegraphed its litigation plans, as well as the legal arguments it’s likely to make.

ppcommissioners-nov-2013-webPresumably, the FCC’s lawyers are already at work on rebutting those arguments. Ars Technica has a good piece up previewing the likely counter-arguments.

The first shots have already been fired, meanwhile, on Capitol Hill, where the Republican chairs of the House Oversight and Senate Homeland Security and Government Affairs committees, Rep. Jason Chaffetz and Sen. Ron Johnson, respectively, have each sent letters to FCC chairman Tom Wheeler (here and here) demanding documents and information regarding contacts between the FCC and the White House in the lead up to last week’s net neutrality announcement. the FCC’s deliberations and Wheeler’s apparent change of heart regarding Title II reclassification.

Both letters make reference to the detailed tick-tock published last week by the Wall Street Journal on the extensive and secretive efforts within the White House to build the case for strong net neutrality rules, leading up to Obama’s dramatic announcement in November calling for reclassification, and both chairmen vow hearings into whether the White House and President Obama unduly influenced or interfered with the FCC’s deliberations and Wheeler’s apparent change of heart regarding Title II.

Apart from the GOP’s usual anti-Obama Tourette’s, it’s hard to see why the Republicans would want to make a public show of defending the telecom companies and berating Obama and chairman Wheeler for embracing a widely popular position, but it might win points (and contributions) from telecom companies down the line. Should the courts ultimately uphold the FCC’s decision the telecom companies are almost certain to come to Capitol Hill asking for legislation to limit how broadly the commission is able to wield its new authority.

While the legislative battle heats up, Republican FCC commissioner Ajit Pai, who opposes reclassification, seems to be trying to mount some sort of insurgency from with the commission itself. Last week he issued a multi-part critique of what he called “President Obama’s plan to regulate the internet,” and on Tuesday (2/10) he plans to hold a press conference, presumably to denounce the plan further. His pointed reference to “President Obama’s plan,” suggests he’s angling to disclose additional information regarding possible White House interference with the independent agency.

With only one other likely “no” vote on the commission, Pai obviously can’t block Wheeler’s plan from being approved but he can certainly provide ammunition to its opponents and his vocal internal agitation could leave the FCC’s enforcement bureau gun-shy in policing the ISPs.

The main question in all this for OTT providers is whether the courts analyze the application of Title II to retail broadband service separately from its application to network interconnection issues, or as part of a package, and, should a court ultimately throw out the FCC’s new rules, whether Congress would address both issues, or only retail broadband.

As discussed in our previous post on the FCC’s move, the commission’s decision to create a process for vetting interconnection agreements under a Title II “just and reasonable” standard is the most important component of the new rules for OTT providers. If the court were to rule the FCC lacked sufficient grounds for reclassifying retail broadband access as a Title II service, would that necessarily mean no Title II for interconnection arrangements, either? Alternately, could the court uphold Title II for retail broadband but rule the FCC overreached in applying it to non-consumer facing interconnection arrangements?

Similarly, if the court were to throw out the FCC’s new rules, would any effort by Congress to write its own net neutrality rules include interconnection? The GOP bill introduced last month in the House and Senate is silent on the issue. But I wouldn’t expect Netflix to remain silent if it comes to that.

We’re a long way yet from having answers to those questions.