Verizon, can you hear me now?!
If someone ever needed an example of "be careful what you wish for because you just might get it," look no farther than Verizon's lawsuit against the FCC's net neutrality rules and the high-tech showdown we see playing out today at the FCC. Big cable and telco companies can thank Verizon for putting back into play strong net-neutrality rules, as we net-neutrality advocates enjoy some new momentum, even if we have not yet won the fight.
The original net neutrality, non-discrimination proposal put forth by then-Chairman Julius Genachowski was based on the FCC's longstanding authority to protect consumers under statutes regulating telecommunications utilities. Verizon, Comcast, and all the other ISPs screamed bloody murder and went running to their patron saint in the White House, Larry Summers (then head of the National Economic Council), saying that this "regulating the Internet" would kill investment and jobs at a time the U.S. economy needed both. Summers took the bait.
The result was a watered down version of the original proposal, with non-discrimination rules premised on the much weaker statutory regime for non-utility, "information services." AT&T, which was lobbying at the time for approval of its ill-fated T-Mobile merger, played nice with the Democrats and reassured that the middle-of-the-road approach -- net neutrality rules based on the non-utility regime--would withstand the test of time. [Full disclosure: I was lobbying with the pro-net-neutrality coalition and argued to senior Members of Congress that this approach would not stand up in court.] The FCC adopted the middle-of-the-road approach.
Enter Verizon, which did not want to play nice and challenged the FCC's net neutrality rules in court, arguing among other things that the weaker statutory basis did not authorize the FCC to create non-discrimination rules. The D.C. Circuit Court of Appeals agreed, essentially telling the FCC: make up your mind! If you want a non-discrimination rule, like what's applied to utilities, then you have to categorize internet access as a utility. But the FCC cannot, said the court, establish a non-discrimination rule premised on the weaker "information service" category.
Congratulations, Verizon! You won!
Which brings us to today. The FCC is confronting how to comply with the D.C. Circuit Court's ruling. Republican Commissioners say, do nothing-- net neutrality is a solution in search of a problem. Proponents of a strong net neutrality regime say, if the court gave us the option of a non-discrimination rule based on classifying internet access as a utility, then fine: reclassify.
What does Verizon say? NO! Don't do what the D.C. Circuit said you could do! Don't reclassify internet access as a utility! Jobs! Investment! Freedom! Apple pie!
And let's not forget that all this occurs against the backdrop of Senate Majority Leader Harry Reid (D-NV) having changed the Senate rules to end the Republican blockade of judicial nominees, including the ones nominated for ...wait for it... the D.C. Circuit Court of Appeals, the very court that reviewed the FCC's net neutrality order in the first place.
Perhaps Verizon, when it filed its lawsuit against the FCC, had made a bet that President Obama would lose re-election, or that even if he won, Republicans could block Democrats from going on the D.C. Circuit. Not so.
Sorry, Verizon. Larry Summers is no longer in the White House to hear your pleas. Obama nominees are populating the federal circuit courts, including the D.C. Circuit. Democrats control the FCC and are feeling the heat from their core constituencies. Not exactly what you had in mind back when you sued the FCC to gut the net neutrality rules? Well, be careful what you wish for. You just might get it.
David Goodfriend is an Adjunct Professor at The Georgetown University Law Center specializing in technology and telecommunications. He represents clients favoring net neutrality, including eBay and DISH Network.
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