Net Neutrality Update: The D.C. Circuit Goes Through the Motions

Posted on March 8, 2012 by Harry Cole

Court resists FCC efforts to delay judicial review.

It’s been several months since that Hot Topic Of All Hot Topics, net neutrality, graced our space here. When last we reported on the subject, the net neutrality order had finally made it into the Federal Register, a number of parties had sought judicial review in a number of federal courts of appeals, the D.C. Circuit had been picked as the lucky court that will hear arguments on the matter, and a lone petition for reconsideration of the order had been filed with the Commission.

Then things got quiet.

It turns out that, despite the silence, things have been happening down at the D.C. Circuit. Earlier this month the court acted on a couple of FCC motions. While the court’s order consists of a whopping three sentences, it at least provides some tea leaves for us to study while we wait for further developments.

At issue were (a) the FCC motion to dismiss Verizon’s “notice of appeal” and (b) an FCC motion to have the court hold the case in abeyance while the Commission addresses the one petition for reconsideration of the net neutrality decision that was filed with the agency. [Spoiler alert: the court denies the abeyance request, but leaves the motion to dismiss in limbo.]

You can find the background on the Verizon notice of appeal in this series of posts from last year. As we indicated back then, Verizon filed both a “notice of appeal” (pursuant to Section 402(b) of the Communications Act) and a “petition for review” (pursuant to Section 402(a)) in an apparent effort to boost the chances that the D.C. Circuit would be the U.S. Court of Appeals to decide the fate of net neutrality. The Commission moved to dismiss the former almost immediately, presumably in the hope that, if the Verizon appeal were dismissed, the case might ultimately land in some other circuit.

Before Verizon even got a chance to oppose the FCC’s motion last fall, the Joint Panel on Multidistrict Litigation (JPML) had selected the D.C. Circuit to hear the case, so the Commission’s motion was moot.

Or maybe not.

Once the D.C. Circuit had jurisdiction of the case (that is, after the JPML had pulled the D.C. Circuit’s ping pong ball out of the official drum), we expected (a) the FCC to withdraw its motion and/or (b) Verizon to withdraw its “notice of appeal”. Neither of those things happened. 

Instead, Verizon filed an opposition to the FCC’s motion to dismiss, and the FCC replied. In its reply the FCC acknowledged that the jurisdictional issue the two parties were bickering over “will have little practical effect” on the case. Nevertheless, both sides pressed the Court for resolution of an issue that both seemed to agree was no longer important.

Which brings us to the court’s recent order. Rather than toss the Commission’s motion to dismiss as moot, the court has referred that motion to the panel of judges who will be assigned to hear the case. Most importantly, the court has directed the FCC and Verizon “to address in their briefs the issues presented” in the motion to dismiss; the parties are specifically ordered not simply to incorporate their previous arguments by reference.

Our guess is that, by taking incorporation by reference off the table, the court is calling the FCC’s bluff. If the FCC really still thinks that it’s important for the court to address the jurisdictional arguments presented in the motion to dismiss, then the FCC is going to have to dedicate precious space in its brief to those arguments. 

Contrary to what some readers may think, appellate briefs are subject to tight length limitations. Cases involving major league issues (like net neutrality) can easily require all the permitted space (probably with considerable squeezing to meet the court-imposed limits). Under such circumstances, a party would normally be reluctant to chew up valuable space tilting at unnecessary windmills. So it will be interesting to see if, in its brief, the Commission chooses to pursue the question of whether Verizon’s notice of appeal should have been dismissed. (Our guess is that the issue will be dropped by all concerned.)

And the FCC’s motion to hold the case in abeyance? The court denied the motion without discussion. The Commission had argued that, because the one and only petition for reconsideration of the net neutrality order is still pending, the whole proceeding is still technically in flux, and the court might want to hold off on wading into it until the FCC has acted on the pending recon.

That’s a classic argument, one the Commission has presented, successfully, many times before. And it often makes sense. Why, after all, should the court start to review an order which is still subject to change? No point in trying to hit a moving target.

But here, the single petition for reconsideration involves a very limited aspect of the overall net neutrality decision. (It seeks clarification of the “special services” aspect of the order.) By contrast, Verizon is challenging the most fundamental aspects of the decision, including particularly whether the FCC has the necessary authority to engage in net neutrality regulation. 

In its opposition to the Commission’s abeyance motion, Verizon argued that, given the limited nature of the matters still before the Commission, resolution of the petition for reconsideration will not affect the core issue already before the court. In other words, the real target of Verizon’s challenge will not be moving around at all.

If the court had any reluctance at all about diving into the net neutrality morass sooner rather than later, it could have granted the Commission’s motion. That would likely have delayed the judicial review process for months at least, maybe years. But the court declined that opportunity. Court to parties: bring it on . . . now.

Of course, the court still had not, at last check, announced a briefing schedule for the case, much less an argument date. But the denial of the abeyance motion seems a pretty good indication that the court intends to keep its review of net neutrality moving as quickly as possible.

Be sure to check back with CommLawBlog for updates.
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Net Neutrality Update: One Lonely Reconsideration Petitioner

Posted on November 14, 2011 by FHH Law

Could a single petition for reconsideration delay judicial review?

The Commission has announced that it has received one – and, apparently, only one – petition for reconsideration of its Open Internet order released last December (but not published in the Federal Register until September). For the curious among you, the seven-page petition – which is actually titled "Petition for Clarification or Reconsideration" – may be found here.  (It asks the Commission to clarify the "special services" aspect of the net neutrality order, particularly as that aspect would affect "enterprise customers".)

The import of this filing lies not so much in the substance of the arguments it presents, but rather in the effect that it might have on the timing of judicial review. As we have previously reported, multiple petitions for review of the Open Internet order have been filed with various federal courts of appeals */; all those petitions are set to be heard in a consolidated proceeding before the U.S. Court of Appeals for the D.C. Circuit. So the train heading toward Judicial Resolution is loaded up and ready to leave the station. 

But with the filing of the recon petition, there is now a lingering bit of business still pending before the Commission.  Theoretically, the FCC’s disposition of the petition for reconsideration could alter – maybe even eliminate – some arguments that might otherwise have to be resolved by the court on appeal. When such circumstances arise, it is routine – but not absolutely required – for the court to hold its processes in abeyance pending agency action on the reconsideration issues. The abeyance approach often seems the most efficient way of handling such situations.  Indeed, if the court steps in and tries to rule before the agency's action has stopped moving around, the result can be (and, in some cases has been) far more disruptive than if the court had chosen to wait.  It will be interesting to see whether the FCC (or some other party) files a request for the Court to hold the appeal in abeyance in light of the petition for reconsideration.

In dealing with the recon petition, the Commission will next publish a notice in the Federal Register, alerting the public to the filing of the petition and inviting responses to it. What with the time it will likely take to get that notice into the Register, and then the additional time for responses and replies, the matter won’t be ready for the Commission even to begin to think about it until early next year, at the soonest.

Whether the single petition for reconsideration in the Open Internet proceeding will slow down – or stop entirely – the appellate process is not clear. It’s hard to imagine that a relatively terse recon effort can, or should, delay judicial resolution of the broad range of issues likely to be presented on appeal. But stranger things have been known to happen. We’ll try to keep an eye on things, so check back here for updates.

*/  Speaking of those multiple petitions for review filed in multiple circuits, we note that three of the petitioners are bailing out of the proceeding.  The three – People's Production House, Media Mobilizing Project and Mountain Area information Network – had filed their petitions in the 2d, 3d and 4th Circuits, respectively.  On October 28, each filed a Motion for Voluntary Dismissal asking the D.C. Circuit to dismiss its respective petition.  No reason for the early departures was given (and, truth be told, the Court's rules do not require any such explanation).  Suspicious minds might guess that these petitioners filed their initial petitions largely, if not exclusively, in an effort to keep the case out of the D.C. Circuit – but as they hustle out the door now, we'll probably never know for sure.

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Net Neutrality Rules Make It to Federal Register

Posted on September 23, 2011 by FHH Law

As predicted on CommLawBlog, effective date is November 20, 2011 . . . but don’t hold your breath

It’s official! The Commission’s Report and Order on the “Open Internet” – a/k/a the net neutrality order – has finally been published in the Federal Register. As we indicated in our post yesterday, the effective date of the new rules is November 20, 2011.

For a refresher course on just what the order includes, check out our posts here, here and here, for starters.

To paraphrase Churchill, Federal Register publication is neither the end nor even the beginning of the end, but it may be the end of the beginning. The scene will now shift to one or another U.S. Court of Appeals, although not necessarily right away: it’s possible that some parties may go back to the Commission for reconsideration of some aspects of the order. That latter scenario could complicate matters, as the courts might be inclined to hold off on considering challenges to the new rules if any administrative reconsideration might lead to changes in the rules. Courts in general prefer not to have to deal with moving targets, and can you blame them? Plus, the Commission would likely prefer to have the courts hold off while the Commission tries to smooth out any rough edges in the rules through the reconsideration process, so you can probably expect the FCC to try to discourage the courts from moving forward pending agency reconsideration if reconsideration is sought. But even one or more parties does petition for reconsideration, the judicial review might still proceed apace. You never know.

Another possible complication could arise if any party seeks a stay of the rules’ effectiveness pending judicial review. It is notoriously difficult to convince either the Commission or the courts to issue stays, but in a hotly contested proceeding of national importance like net neutrality, it might make the most sense to maintain the status quo until the legal issues have been resolved. While there are deadlines for filing for reconsideration (30 days from Federal Register publication of the rules -- but heads up -- in this case it'll be 31, because the 30th day falls on a Sunday) and judicial review (60 days from publication), there is no technical deadline for seeking a stay. As a result, a stay request could be filed pretty much any time – although it would obviously make the most sense to file it far enough in advance of the effective date (November 20) to give the Commission or (more likely) the courts enough time to complete their review of the stay arguments and act before that date.

Stay tuned to CommLawBlog for updates on further developments.

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Net Neutrality: Effective November 20?

Posted on September 22, 2011 by FHH Law

It looks like Federal Register publication of the net neutrality rules is set for September 23.

A couple of days ago we confirmed some movement on the net neutrality front, and also noted trade press reports that final publication of the FCC’s magnum opus on the “open Internet” might be coming up soon. Sure enough – CommLawBlog understands that Federal Register publication of the net neutrality order has been teed up for tomorrow, September 23, with an effective date of November 20, 2011 for the new rules. Of course, nothing will be official until the actual publication occurs, but it’s looking like tomorrow will be the day.

Whenever Federal Register publication does occur, it will mark the beginning (but only the beginning) of the next phase of the process. Publication is the starting gun for petitions for reconsideration (due at the FCC within 30 days of Federal Register publication) and initiation of appellate review (due at any U.S. Court of Appeals within 60 days of publication). It’s also possible that some parties may seek a stay of the effectiveness of the rules – obviously, those efforts would have to be cranked up prior to the effective date.

We know for sure that Verizon is likely to take the rules to court. It already tried back in January, 2011 – but found itself on the outside looking in when the D.C. Circuit dismissed its initial notice of appeal as premature. And given the loud and extended debate about the question of governmental regulation of the Internet – a debate ably addressed and, to a degree, deflated by our colleague Mitchell Lazarus last January – the odds are good that Verizon will not be alone.

As we have previously pointed out, there’s also a good chance that petitions for judicial review will be filed with a number of different circuits. Anyone planning on filing such a petition should be sure to review the helpful public notice issued by the FCC’s General Counsel back in January, laying out the important steps to be taken to assure that your entry is included in any judicial lottery that might have to be conducted to pick the circuit that will ultimately hear the appeal. (Call us crazy, but we suspect that that notice was issued in anticipation of multiple petitions going to multiple circuits with respect to the net neutrality order.)

Check back with us here at CommLawBlog for further developments on the net neutrality front.

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The FCC and Net Neutrality: "Reducing" Paperwork

Posted on July 4, 2011 by Paul J. Feldman

Bureau releases tentative – and temporary – guide for compliance with transparency rules

When the FCC adopted network neutrality rules, back in December (full text of the Order is here), almost nobody was happy. Verizon immediately tried to challenge the rules in court, but was deemed premature. More challenges are sure to follow. And even some net neutrality supporters condemned the new rules as vague.

One particularly vague rule concerns transparency. A broadband Internet access provider must

publicly disclose accurate information regarding the network management practices, performance, and commercial terms of its broadband Internet access services sufficient for consumers to make informed choices regarding use of such services and for content, application, service, and device providers to develop, market, and maintain Internet offerings.

Back in February, as required by the Paperwork Reduction Act (PRA), the FCC asked for comment on the burden this rule would impose. Broadband providers expressed concerns about difficulties in complying, particularly for smaller providers having limited resources. As we discussed then, the rule cannot take effect until the FCC and the Office of Management and Budget (OMB) complete a complicated procedural dance, which includes a finding that the rule complies with the PRA notwithstanding the providers’ comments.  The Commission’s request for comments in February started that PRA dance; while the next step (i.e., sending the rules and comments over to OMB for its review) could have been taken as early as April, it hasn’t happened yet.

In the meantime, the FCC’s Enforcement Bureau and Office of General Counsel  have tried to address the charges of vagueness with an “Advisory Guidance for Compliance With Open Internet Transparency Rule.” Some highlights:

1.         Point-of-Sale Disclosures. The Order that adopted the transparency rule requires broadband providers to disclose network management practices, performance characteristics, and commercial terms “at the point of sale.” This does not require distribution of disclosure materials in hard copy, says the Advisory, or extensive training of sales employees to provide the disclosures themselves. Instead, providers can comply by directing prospective customers to a web address with the required information. At a brick-and-mortar outlet, a provider relying on a web page must have equipment that customers can use to access the disclosures.

2.         Disclosure of Network Performance. The Order requires broadband providers to disclose accurate information on network performance. This is a difficult and potentially expensive requirement, as measurements could entail specialized modems and software at end users’ locations. Besides, there is little agreement on how the measurements should be done.

The FCC, in collaboration with the nation’s largest wireline broadband providers, has launched (but not yet completed) a project to develop key performance metrics. The Advisory suggests that participating broadband providers disclose data from the project, and that others use the methodology developed through the project, although that has not yet been released. Alternatively, a provider can disclose actual performance based on internal testing, consumer speed test data, or other data on network performance, including data from third-party sources. The Advisory warns, though, that all of this advice is temporary, as the FCC will provide additional guidance later. It does not say when. We can hear the broadband providers muttering their response to the FCC: “Thanks for nothing.”

Even less helpful are the Advisory’s suggestions regarding disclosure for mobile broadband services. Further guidance will be forthcoming, the Advisory says. In the meantime, mobile broadband providers having access to reliable information on network performance may disclose it. Or not.

3.         Breadth of Required Disclosures. The Order states that its list of disclosure topics is neither necessarily exhaustive nor a safe harbor, leaving providers worried that they could be liable for failing to disclose additional data. The Advisory now clarifies that disclosure of the information specifically identified in Order will suffice for compliance “at this time,” but also warns that the requirements may change at some unspecified time in the future. Thanks, guys.

4.         Disclosure to Edge Providers. The rule requires broadband providers to disclose accurate information sufficient for “content, application, service, and device [‘edge’] providers to develop, market, and maintain Internet offerings.” Providers wondered whether this calls for information beyond that provided to consumers, and if so, what. The Advisory “anticipates” that disclosures to consumers will be sufficiently detailed as to satisfy this requirement as well. That raises the question whether required disclosures to consumers may be more detailed than consumers need or want.

5.         Disclosures on Security Measures. The Order stated that required disclosures will likely include information on network security and end-user security. This is a problem because providers use a variety of security measures and frequently update them, which makes keeping disclosures up to date a burdensome task. Worse, disclosures on security methods might be used to undermine security. In response, the Advisory suggests that broadband providers use “sound judgment” in deciding what to disclose, so long as consumers can make informed choices and developers can develop.  We hope the FCC will not penalize the good faith efforts of providers that indeed use their sound judgment in withholding sensitive information.

Just how specific should the FCC’s transparency requirements be? Reasonable minds may differ.   A rule that is too vague doesn’t do much good, because it leaves the broadband provider with little or no idea of  what  it is expected to do.   On the other hand, a rule  that  is too detailed risks (a) imposing  on providers burdensome or counter-productive requirements  that ignore varying market realities, and (b) stripping providers of the flexibility necessary to best serve their customers. 

The Advisory purports to provide helpful guidance. Unfortunately, whatever clarity the Advisory offers is likely to be temporary. The Advisory itself states that much of its advice will likely be superseded in the near future. The OMB review process may lead to revisions of the underlying transparency rule. 

Ditto for the appeals process, which hasn’t even begun yet. (As the Verizon case mentioned above established, nobody can take the net neutrality rules to court until the FCC has published them in the Federal Register. Despite trade press reports last winter indicating that the Commission was planning on getting the rules into the Register back then, the rules still haven’t been published yet. More recent trade press reports have popped up to suggest that publication might be expected soon. It could happen any day – but that’s been true since last December.) When the rules finally do get to court, the result could substantially change them – if not trash them altogether.

And until the rules become effective – i.e., until they are approved by OMB and published in the Federal Register – by definition they’re, um, not effective. That means that it doesn’t matter just right now whether or not they’re vague, because just right now nobody has to comply with them.

Which leads us to wonder why the FCC went to the trouble of releasing the Advisory. One possibility: an attempt to convince OMB that the transparency rule is not so vague as to be impermissibly burdensome.   To which we say, “Good luck!”
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