Like the proverbial dog chasing the car, the Supreme Court issued an opinion in Loper Bright v. Raimondo (RIP, Relentless 🤘) that finally catches up with the conservative wing’s dream of dismantling the administrative state and bites down hard on the bumper by eliminating Chevron deference. Being able to line-item veto an agency under the major questions doctrine apparently wasn’t good enough. Instead, Chief Justice Roberts decided that the judiciary needs to review every single rulemaking de novo, which will inundate the judiciary with esoteric questions about every corner of the American regulatory state, with only the help of Skidmore deference if the egghead bureaucrats at the agency happen to say something really smart. Oof.
While a million gallons of ink will be spilled about the immense consequences for American society, there are some special consequences for telecom and the obscure wad of law-and-policy bubble gum holding together America’s Internet infrastructure. The Communications Act of 1934 includes some of the broadest and vaguest delegations to an agency—the Federal Communications Commission—in all of American government, sometimes spelled out in commands no more specific than doing whatever “the public convenience, interest, or necessity requires.” The FCC has many decades of regulations developed in reliance on Chevron and similar doctrines, and challenges are about to come out of the woodworks notwithstanding Loper Bright’s promise “not [to] call into question prior cases that relied on the Chevron framework.” A lot of telecom lawyers are about to bill enough hours to buy a beach house.
Net Neutrality, Title II, and Brand X
The flagship telecom issue at the heart of the post-Chevron chaos, however, is net neutrality—rules that prevent ISPs from discriminating on the basis of application, content, or devices—and more broadly, the FCC’s ability to assert authority under Title II of the Communications Act over Internet service providers. The full saga is too long and tortured for this blog post, but we’ll have a neat potted history of the whole thing in the next version of Communications Law and Policy (or see my short recent piece with Brett Frischmann, or if you must, Justice Gorsuch’s concurrence on pp. 23–24). For now, it’s enough to know that the FCC has repeatedly reversed itself from administration to administration over the past two decades about whether ISPs are governed by Title II of the Communications Act. Back in April/May, the current FCC under Chairwoman Jessica Rosenworcel concluded that indeed, ISPs are governed by Title II, and litigation has already commenced.
So what does this all have to do with the now-dead Chevron doctrine? As it turns out, one of the worst sins perceived by the Loper Bright majority is the Supreme Court’s 2004 decision in NCTA v. Brand X, which concluded that Title II was ambiguous in its application to cable modem services. Brand X (authored by Justice Thomas, who now joins the Loper Bright majority), in turn, has proven a durable mount for the pendulum that has swung back and forth between Republican and Democratic FCC decisions to classify and declassify ISPs under Title II. As my telecom law students learn: when in doubt about how a court will review net neutrality, the answer always starts and ends with Brand X.
But Brand X drew tremendous ire during the Loper Bright oral arguments. And Chief Justice Roberts’ majority opinion specifically calls out Brand X as a “license authorizing an agency to change positions as much as it likes.” (Justice Gorsuch’s concurrence makes a similar callout.)
So if Brand X is a dead letter, what does that mean for net neutrality? The easy money is that the Court’s conservative majority (including then-Judge Kavanaugh, who wrote a blistering dissent against an earlier iteration of the rules in USTA v. FCC), will simply rule that Title II of the ‘34 Act does not apply to ISPs. This result would obliterate the Damoclean pendulum of rules that has more or less kept ISPs in check over the last two decades and make it clear that America’s oft-reviled ISPs have free rein to, um, dutifully serve their customers.
Pizza, Portlandia, and the Surprising Judicial Treatment of Title II
But for net neutrality fans looking for a little bit of copium, here’s some good news. First, the leading interpretation of Title II’s application to ISPs from a renowned conservative jurist might surprise you. Dissenting in Brand X, Justice Scalia wrote an scathing takedown of Justice Thomas’s majority opinion, concluding that Title II unambiguously applied to cable ISPs in an infamous opinion laden with analogies about pizza delivery and leashed puppies. So one might make the argument that Justice Scalia’s dissent ought to control.
(As an aside, if you want to spar with old-timers at telecom law cocktail parties, the important details of these analogies are reserved for students in my telecom law class. But anyone can cosplay a telecom law insider with my fabulous Brand X Pizzeria T-shirt—proceeds to the Federal Communications Bar Association Foundation.)
But wait, there’s more. A little known (and much-hated by telecom law students) fact about Brand X is that it followed a tortured proceeding in which advocates tried to apply rules to cable ISPs by way of a local cable franchise in Portland, Oregon, which the Ninth Circuit ultimately ruled in AT&T v. Portland was preempted by the Communications Act. In the course of doing so, the Ninth Circuit reached the wacky conclusion that ISPs were conceptually divided into both transmission pipelines regulated under Title II and unregulated Internet services that rode atop those pipelines, a distinction that obliged the FCC to regulate at least some part of them. In response, the Republican FCC (which had been asleep at the switch while all this was happening) rushed out an order declaring that no, cable modem service was not a Title II service. The resulting appeal led to—wait for it—the Supreme Court’s opinion Brand X.
Brand X, then, had to deal with the fact that the Ninth Circuit had beaten the FCC to the punch. Normally, Chevron deference meant a court not overruling an agency’s determination. But could an agency overrule a court? Justice Thomas clarified that Chevron deference was so powerful that it overcame stare decisis, meaning that the FCC’s cable modem order overrode the Ninth Circuit’s contrary interpretation in Portland.
To bring it full circle, the Loper Bright majority and Justice Gorsuch in particular hate this part of Brand X. The majority describes it as a leading reason that Chevron is “the antithesis of the time honored approach the [Administrative Procedure Act] prescribes”—i.e., the judicial supremacy of courts interpreting statutes. Justice Gorsuch similarly laments that Brand X allows agency “officials [to] even disagree with and effectively overrule not only their own past interpretations of a law but a court’s past interpretation as well.” It’s pretty obvious that this part of Brand X is now a dead letter too.
Now, does this mean that the Court or whatever circuit ends up hearing the latest net neutrality challenge will defer to the wisdom of either Justice Scalia or the Ninth Circuit and keep Title II in play for ISPs? Probably not, given that the brief little ode to stare decisis in this part of Loper Bright sits in the shadow of the Court disregarding stare decisis to overrule one of the most venerable and important parts of modern American jurisprudence (i.e., Chevron, although you could also substitute any number of other holdings from this term). But it does mean that now we all get to become experts on Brand X and Portland again because they are almost sure to feature prominently as the appeal unfolds. Telecom lawyers, start designing those beach houses! Everyone else: stay tuned…