Verizon Presses Challenge to Net Neutrality Regulations
A lawyer for Verizon Communications Inc. on Monday pressed the company's fight with federal regulators, arguing that a government scheme to promote an open Internet is unconstitutional.
Verizon's lawyer, Wiley Rein partner Helgi Walker, told a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit that the Federal Communications Commission overstepped its authority in adopting so-called "net neutrality" rules in December 2010 to try to prohibit barriers to infrastructure development.
Decisions about whether and how to regulate broadband service providers, Walker argued in court, are for Congress to make. Walker, co-chairman of Wiley's appellate practice, said it was "highly unlikely" that Congress would have delegated authority to the FCC to set broadband rules in an "opaque" and "convoluted" manner.
"It is not up to the FCC to decide those important and hotly debated questions entirely on its own," Walker said. "But that is what happened here."
D.C. Circuit judges Judith Rogers and David Tatel heard the closely watched case with Senior Judge Laurence Silberman. The hearing, which lasted for two hours—much longer than most D.C. Circuit cases—tested the scope of FCC authority.
Tatel more than once expressed puzzlement about why the communications commission adopted the broadband rules in the first place. Silberman, basing his observation on his colleagues' questions, called the rules "dubious" at one point. The court, Rogers said, is looking at the very broad authorization the commission contends it enjoys to regulate competition in the telecommunications market.
At one point, Tatel read from relevant FCC language about how the commission "shall encourage," through regulation, competition in the telecommunications market.
"That’s exactly what the commission says it's doing—preventing the creation of barriers to infrastructure investment," Tatel told Walker.
In court papers, FCC and U.S. Justice Department lawyers said the commission "promulgated high-level rules to ensure that consumers retain the ability to access Internet sites of their choosing."
At issue are regulations that target the ability of broadband providers—for instance, Verizon—from blocking or degrading the Internet service of certain subscribers. The rules prohibit broadband providers from blocking lawful data traffic.
"The threat of what Verizon and other parties could do was, in fact, a barrier to infrastructure investment," FCC general counsel Sean Lev insisted.
The challengers contended in their brief that the regulations "violate the First Amendment by stripping them of control over the transmission of speech on their networks."
But Verizon is a "conduit" for other people's speech, Lev said. The FCC is not controlling the speech that occurs on the company's networks. "Verizon is not speaking," he told the court.
In 2010, a different D.C. Circuit panel, in Comcast v. FCC, concluded that the commission lacked authority to regulate the policies of Internet service providers. A divided FCC adopted its Open Internet Order in response to the D.C. Circuit's ruling in the earlier case. (Tatel sat on the earlier panel.)
The new appeal, Verizon's lawyers wrote in a D.C. Circuit brief, "challenges the FCC’s second attempt to conjure a role for itself with respect to regulation of the Internet—in particular, broadband Internet access service. Here again, the FCC has acted without statutory authority to insert itself into this crucial segment of the American economy, while failing to show any factual need to do so."
Verizon's lawyers said in their brief that the FCC's order imposed "dramatic new restrictions on broadband Internet access service providers. The commission, the challengers argued, adopted an order "without any evidence of a systematic problem in need of a solution."
Steptoe & Johnson partner Pantelis Michalopoulos argued for a group that included the Open Internet Coalition, Public Knowledge, Vonage Holdings Corp. and the National Association of State Utility Consumer Advocates. (Members of the Open Internet Coalition include Amazon.com, Twitter Inc., Google Inc. and Facebook Inc.)
Michalopoulos, who leads Steptoe's telecommunications, Internet and media practice, said in court that the FCC "reasonably concluded" that a fear of discrimination could be a barrier to infrastructure investment.
Investment in broadband access, Michalopoulos wrote in a brief, is needed to "widen the gate"—the "broadband access pipes that are controlled today by a handful of companies."
He continued: "Such investment would be significantly hampered, however, if the current gatekeepers could lessen demand for the Internet experience by cherry-picking favorites among the immense Internet ecosystem."
The D.C. Circuit didn't immediately rule after the hearing.