FCC Open Internet Order: Is Net Neutrality Itself Problematic for Free Speech?

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1 FCC Open Internet Order: Is Net Neutrality Itself Problematic for Free Speech? Samuel L. Feder and Luke C. Platzer In recent years, the demand for online video and gaming has grown exponentially, creating a lucrative market for delivering such services to consumers. These types of services, which require high amounts of bandwidth, are more sensitive to delays in upload and download speed than many other forms of data traffic. As anyone with an online Netflix subscription can attest, a poor transmission can cause the quality of a streaming video to degrade or to stop a movie altogether; in many fast-paced online multiplayer games, even a second s slowdown in the responsiveness of a player s Internet connection can be the difference between virtual life and death. Voice-over-Internet-Protocol (VoIP) calls similarly can suffer degradation if sufficient bandwidth is not available. Many other bandwidth-intensive Internet applications, on the other hand, such as online file sharing or web browsing, are more tolerant of a slow or erratic Internet connection because slight delays in the delivery of content are less likely seriously to impact the Samuel L. Feder is a partner in the Washington, D.C., office of Jenner & Block and is cochair of the firm s Communications Practice. He previously served as general counsel of the Federal Communications Commission (FCC). Mr. Feder regularly represents cable, telecom, and technology companies before the FCC and in litigation. Luke C. Platzer also is a partner in the Washington, D.C., office of Jenner & Block and is a member of the firm s Creative Content and Communications Practices. He represents television and motion picture studios, record labels, and cable companies in intellectual property litigation and regulatory issues arising on the Internet and other media platforms. The authors represented Cablevision Systems Corp. and the Recording Industry Association of America before the FCC in the proceedings discussed in this article. user experience. Companies that provide Internet and cable television service realized years ago that they could use their IP-enabled transmission facilities to offer dedicated VoIP services and that those VoIP services would be able to offer much better reliability than VoIP calls that traverse the public Internet because the network operators could design the systems to ensure that their VoIP transmissions had adequate bandwidth for quality transmissions. As the popularity of using the Internet to watch movies and play video games online has grown, it seems likely that these companies will also seek to provide on-demand video and gaming as dedicated services (i.e., not over the public Internet). Entrepreneurial companies are also expected to develop additional ideas for delivering content in innovative ways. The future of these new forms of content delivery likely will be shaped not only by market forces but also by actual and threatened government regulation. Most prominently, the FCC s long-awaited and controversial net neutrality decision, also known as the Open Internet Order, 1 may well affect the ways in which companies decide to offer specialized services, although the FCC s ambiguity on the treatment of such services makes it hard to predict. Ambiguity and Companies Right to Offer Own Services Under the Open Internet Order, providers of fixed broadband Internet access (Internet service providers or ISPs) cannot block or unreasonably discriminate against lawful third-party content carried on their networks. Albeit similar, requirements for mobile broadband providers are less strict. These nondiscrimination rules, in theory, are intended to prevent ISPs (which are often vertically integrated with video, voice, and/or content providers) from favoring their own content and services over those of their online competitors. The Open Internet Order provides little guidance, however, on the ability of companies that provide broadband Internet access service to offer their own content or services (such as, say, dedicated online gaming platforms or on-demand IP video) directly to consumers as a separate service instead of over the Internet. Although the FCC declined to adopt any rules for these so-called specialized services, the Commission repeatedly emphasized that such services may raise concerns that require close monitoring. 2 That ambiguity leaves network providers that operate Internet access services with very little clarity about what they can do to participate in potential new markets, such as dedicated gaming platforms or on-demand IP video, without attracting unwanted FCC scrutiny. Indeed, the lack of any formal rules governing specialized services does not necessarily mean that these services are not subject to regulation given that the FCC has previously attempted to penalize certain network-management practices based only on broad policy statements. 3 Although the FCC s foray into regulating retail Internet access service will be tested in the courts in the near term, the current round of appeals is unlikely to resolve substantial questions about the FCC s authority over non-internet-delivered specialized services. In particular, the Order raises, but leaves unanswered, a significant First Amendment question: Can the Commission limit the ability of a network operator to make its own content available via a private IP network in order to preserve the competitiveness of similar services provided over the public Internet? If the business case for specialized services continues to develop, the courts may eventually need to decide whether providers have a First Amendment right to offer data

2 services that run parallel to the Internet and compete with Internet offerings and whether the FCC s current warnings about such service offerings impermissibly chill ISPs constitutional right to offer them to consumers. Net Neutrality and the FCC s Open Internet Order Before the FCC s Open Internet Order proceeding, the law did not specifically address how ISPs could manage traffic on their networks or the circumstances, if any, in which an ISP would have the right to favor, block, or limit the transmission of particular websites or services to its customers. The Communications Act itself is silent on the question, and no regulations purport to govern it. However, the FCC in 2005 had adopted general Internet Policy Principles entitling Internet users to access the content of their choice online; to run applications and use services of their choice ; to connect their choice of legal devices that do not harm the network ; and to competition among network providers, application and service providers, and content providers without blocking or interference by their ISPs. 4 In 2009, as the idea of a formal net neutrality policy gained political traction, the FCC moved to codify the Internet Policy Principles and to create an enforcement process. 5 The Open Internet Order, which was released on December 23, 2010, after several rounds of comment, formally implements three rules regarding retail Internet access: (1) transparency, (2) no blocking, and (3) no unreasonable discrimination. 6 The transparency rule requires all ISPs to disclose the network management practices, performance characteristics, and terms and conditions of their broadband services. 7 The no-blocking rule prohibits fixed broadband providers (mostly cable and telephone companies) from blocking lawful content, applications, services, or non-harmful devices from their networks; mobile broadband providers (mostly companies that offer Internet over smartphones and wireless modems) may not block lawful websites, or block applications that compete with their voice or video telephony services. 8 Finally, the no-unreasonable-discrimination rule prohibits fixed providers from unreasonably discriminating in transmitting lawful network traffic. 9 The transparency rule has not generated much controversy. The antiblocking and nondiscrimination provisions, however, have been the focus of extensive public debate and controversy at the Commission. Advocates of these rules have frequently focused on the potential for ISPs to act as gatekeepers that if given the ability to control the content that travels over their networks can use that power to discriminate against competitors. 10 Because many ISPs are vertically integrated with voice, video, and/or content providers, they may face economic incentives to favor their own content (such as prioritizing delivery of their own video or voice services over those of competitors) or to block competitors services altogether. 11 If so-called edge service providers (i.e., operators of websites or Internetenabled services like Google, NetFlix, or Skype) cannot be certain that their services will reach all Internet customers, the argument goes, entrepreneurs will have less incentive to invest in them. 12 In addition to this economic rationale, supporters have argued more generally that nondiscrimination rules ensure free, unfettered online expression and civic participation. 13 Opponents of the rules have questioned these arguments. There has been little evidence of actual abusive or anticompetitive conduct by ISPs, they contend, because competitive pressures and consumer demand police ISP conduct on their own without regulatory mandates. 14 Opponents also warn that managing traffic on an ISP s network is often a complicated exercise (for instance, ISPs must make decisions about which potentially harmful applications to block or whether to cap certain network uses to avoid crowding out other forms of traffic) and that subjecting carriers decisions about network management to the threat of second-guessing by the FCC and to formal complaints from parties whose traffic might be affected is burdensome and could force ISPs to manage their networks less efficiently to avoid regulatory scrutiny. 15 Proponents of the nondiscrimination and no-blocking requirements largely prevailed at the FCC with a divisive three-to-two vote, with the FCC adopting nondiscrimination and no-blocking rules for wired service providers. Mobile broadband carriers were somewhat more successful in convincing the FCC that the complicated management requirements of their networks counseled against rigorous nondiscrimination requirements, with the FCC opting only to extend the no-blocking rules to mobile carriers with respect to voice and video services. 16 Regulatory Limbo The Open Internet Order sets rules for what ISPs can do when they offer broadband Internet access service but leaves largely unresolved whether and The antiblocking and antidiscrimination provisions have been the focus of extensive debate and controversy. how a network operator that provides ISP services can offer its own content and services to customers directly (i.e., without using the Internet). During the Open Internet proceeding, the FCC came to appreciate that the potential market for these types of services, which the FCC designated as specialized services, presented a quandary for its policy goals. Such services might compete against similar offerings that traverse the public Internet, and the network operators own services might enjoy a competitive advantage if they enjoyed prioritized treatment on the private network and/ or were protected from network congestion on the Internet not unlike the conduct that the FCC was trying to prohibit where a network operator provided its own services over the public Internet. 17 And if consumers were to begin using specialized services instead of the Internet for access to applications, services, and content that are currently provided online, the public Internet could become less of an investment priority. 18 The FCC sought supplemental comment during the proceeding on whether

3 and, if so, how it should address such specialized services. 19 Among other things, the FCC considered creating line-of-business rules to restrict the services that ISPs can offer, imposing advertising and marketing restrictions on specialized services, subjecting specialized services to nonexclusivity requirements (such that any ISP that offered specialized services would have to offer competitors the ability to deliver and receive data on the same terms), and/or requiring ISPs to meet certain guaranteed capacity requirements for their broadband Internet services so that traffic from specialized services would not inhibit the performance of broadband Internet access services at any Taken literally, these vague warnings suggest that network providers could face unwarranted scrutiny. given time, including during periods of peak usage. 20 The Open Internet Order ultimately backed away from these more aggressive approaches. On its face, the Order implements no rules about specialized services at all except to require providers that offer such services to disclose their impact on broadband capacity to their ISP customers. 21 The FCC s discussion of its views about specialized services, however, may give network operators pause before launching or expanding any service offerings that consume large amounts of bandwidth as two of the most obvious potential markets, on-demand IP video services and dedicated online gaming platforms, might. The Order declares the FCC s intention to closely monitor specialized services and warns network operators that the FCC expects any provider that increases its network capacity to increase capacity offered for broadband Internet access instead of devoting the additional capacity to a specialized service. The Order also notes that the FCC would be concerned if a provider s broadband Internet access did not keep pace with capacity added to its specialized service. 22 Taken literally, these vague warnings suggest that a network provider could face unwanted scrutiny from the FCC if it were to devote existing network capacity that is currently used for broadband Internet service to a specialized service or if it were to add network capacity to offer a specialized service but failed to devote the new capacity equally to broadband Internet access. If these threats mean what they say, network operators may face considerable challenges in using their existing networks to offer specialized services with significant bandwidth requirements. FCC Cautions Against Circumventing the Order Perhaps most troubling for network operators interested in launching specialized services, the Order implements a rule that any service... that is used to evade the protections set forth in these rules for broadband Internet access services will be subject to the Open Internet Order rules. 23 Because a principal benefit of offering services on a specialized basis instead of over the public Internet is to guarantee a certain amount of bandwidth necessary to ensure a reliable transmission something the Commission s nondiscrimination policy might prohibit for services that an ISP offers over the Internet this evasion rule could, in practice, sweep quite broadly. Thus, although the Open Internet Order on its face proclaims that our rules do not prevent broadband providers from offering specialized services such as facilities-based VoIP, 24 their practical effect may well be to chill providers from doing exactly that. Moreover, the FCC has previously taken a very aggressive view of its authority to enforce policy involving network management, even in the absence of formal rules. 25 Challenges to the Open Internet Order The Open Internet Order has been contentious, both in the political arena and at the FCC. The Commission adopted it on a split three-to-two vote that drew a bitter dissenting statement from Commissioner McDowell. 26 The House of Representatives, voting largely along party lines, recently voted to overturn it, although the Senate is not expected to take up the measure. 27 The inevitable appeals relating to the Order have already begun to work their way into the federal court system. One threshold issue centers around which court will review the Order. As discussed below, there is a powerful forum-shopping incentive with respect to the appeal: the U.S. Court of Appeals for the D.C. Circuit has very recently expressed extreme skepticism about the FCC s statutory authority to impose nondiscrimination rules on ISPs. For that reason, shortly after the Order was issued, two broadband providers, Verizon and MetroPCS, tried to ensure that review of the Open Internet Order ends up before the D.C. Circuit, although those appeals were later dismissed as premature. 28 However, a jurisdictional battle will almost certainly brew as soon as the Order is published and traditional petitions for review can be filed. Verizon and MetroPCS s theory for exclusive D.C. Circuit jurisdiction turns on the court accepting that they are appealing a license modification. Their theory may prove unpersuasive because the Order sweeps broadly across an entire industry and FCC rules of general applicability can be appealed anywhere. If they succeed, however, their odds of success in their appeal appear quite favorable for the reasons described below. Does the FCC Have Statutory Jurisdiction over Net Neutrality? The central question on appeal is almost certain to be whether the FCC had any statutory authority to subject ISPs to nondiscrimination rules in the first place. To a layperson, this controversy may seem counterintuitive because the Internet is one of the predominant forms of communication, and the FCC s subject matter jurisdiction covers all communication by wire and radio. 29 But the Communications Act actually says very little about the Internet specifically. Although it spells out in great detail the Commission s responsibilities regarding various methods of communication, such as telecommunications, wireless and radio, satellite, and cable television, direct references to the Internet are few and far between, covering limited and scattered items such as promoting

4 universal service for advanced services through subsidies to schools and libraries, 30 issuing regular reports to Congress, 31 and removing regulatory barriers to carriers investment in broadband infrastructure. 32 The Act does, in Title II, directly regulate and endow the FCC with substantial authority over carriers that provide telecommunications, which the Act defines as the transmission, between or among points specified by the user, of information of the user s choosing, without change in the form or content of the information as sent and received. 33 The FCC traditionally has used this authority to regulate the interstate telephone network. However, to be subject to the statutory requirements of Title II, such as nondiscrimination and the requirement of just and reasonable pricing and conditions, a provider s service must be an offering directly to the public of telecommunications. 34 Although many have argued that retail Internet access service essentially satisfies this statutory definition, the FCC closed off this avenue in its 2002 Cable Modem Declaratory Order, in which it held that broadband Internet access is not a telecommunications service for purposes of the Communications Act but rather an information service not subject to those requirements. 35 The Supreme Court eventually affirmed this classification in the wellpublicized National Cable & Telecommunications Ass n v. Brand X Internet Services decision, albeit over a spirited dissent by three Justices who thought that the Communications Act unambiguously required Internet access to be subject to Title II. 36 FCC Relies on Ancillary Authority Since Brand X, the FCC has based its regulation of ISPs on its so-called ancillary authority rather than the direct statutory requirements of Title II. Even where the Act does not directly impose statutory requirements on service providers for the FCC to implement, the FCC retains generalized authority under the Act to perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions. 37 Historically, this ancillary authority has allowed the FCC to reach beyond services specifically regulated by the Communications Act to impose regulatory requirements on other forms of communication by wire and radio as necessary to ensure that its regulation of regulated service providers is effective. For instance, before Congress amended the Communications Act to vest specific authority over cable television services in the FCC, the Commission used its ancillary authority to impose various requirements on cable systems on the theory that such regulation was necessary to prevent cable programming from undermining the FCC s broadcast policies. 38 The FCC also invoked this ancillary jurisdiction theory as the basis for its 2005 Internet Policy Principles 39 in two enforcement actions where it found that ISPs were impermissibly interfering with third-party content transiting their networks: one case in which an ISP was blocking third-party VoIP applications 40 and one in which Comcast was alleged to have interfered with peer-to-peer file transfers. 41 The Commission s Open Internet NPRM likewise rested on the assumption that the FCC could use its ancillary authority to codify the Internet Policy Principles. 42 However, although the Open Internet proceeding was ongoing, the Commission s ancillary authority to impose nondiscrimination rules on Internet services was thrown sharply into doubt. In Comcast Corp. v. FCC, the D.C. Circuit held that the FCC s ancillary authority could not support the Commission s enforcement of the Internet Policy Principles against Comcast because the ancillary authority can only be used where it is reasonably ancillary to the Commission s effective performance of its responsibilities under... the Communications Act. 43 The court noted that, in the cable context, the Supreme Court had previously rejected the FCC s attempts to impose common carrier requirements on cable systems in the absence of statutory authorization. 44 The court decided that the Internet Policy Principles failed this test. Although the Act contains generalized references to promoting a free and unfettered Internet, the Commission was unable to show how a nondiscrimination requirement for ISPs served a specific substantive FCC responsibility. 45 Ancillary authority, according to the D.C. Circuit s reasoning, is something like the Necessary and Proper Clause in the Constitution. Although it expands the agency s authority, it expands it only in furtherance of other specific, enumerated responsibilities, of which maintaining an open Internet or competitive neutrality in online services is not one. The FCC might, of course, seek to solve this conundrum by simply reversing its 2002 Cable Modem Declaratory Order, in which it declared that broadband Internet service is not a telecommunications service. If Internet access were a telecommunications service, it would be subject to Title II s statutory The potential chilling effect of these vague statements [in the Order] are real. nondiscrimination requirement, 46 and the FCC s authority to impose noblocking and nondiscrimination rules on ISPs would be straightforward. However, an FCC attempt to go down this path last summer was met with substantial political and congressional opposition, along with threats of litigation based on what would appear to be a results-oriented reversal of earlier policy. 47 Therefore, the FCC s Open Internet Order tries to justify its nondiscrimination, no-blocking, and transparency rules by tying them to other provisions of the act. The Order principally attempts to do this using the FCC s statutory responsibility to remove barriers to investment in and deployment of broadband infrastructure. Under 706 of the act, Advanced Telecommunications Incentives, the Commission is to utilize its regulatory authority to remove barriers to infrastructure investment in advanced telecommunications capability. 48 In particular, this section of the Act requires the Commission, if it finds that advanced telecommunications capability is not being deployed to all Americans in a reasonable and timely fashion a finding that the FCC made in to take

5 immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market. 50 FCC s Rationale The FCC s logic on this point involves multiple steps: it reasoned that if ISPs were to discriminate against competing content or in favor of their own, over time there would be less competition for online services and hence less consumer demand for bandwidth, which in turn would reduce the incentives of broadband providers to invest in the network. 51 Notably, this argument is two steps removed from the... the inability to guarantee a continous connection may [be] a significant burden for [some speech]. policy arguments that have conventionally animated the net neutrality debate. Although the original arguments for net neutrality focused on the direct policy benefits of a nondiscrimination and no-blocking rule (e.g., benefits to competition, freedom of expression, and civic participation), the FCC s 706 rationale relies on a second- or third-order theory that those policy benefits would lead to increased consumer demand, which in turn would lead ISPs to invest more money in deploying broadband networks to reach more customers. Whether this chain of reasoning can support the Order on appeal remains to be seen. The Order also tries to support the FCC s authority by pointing to several other discrete responsibilities under the act, although each is more piecemeal in scope than the broadband investment rationale. For instance, on the theory that competition from VoIP services helps ensure reasonable prices for telecommunications services, the FCC noted that it could use its ancillary authority to prohibit ISPs from interfering with VoIP services. In turn, because protecting VoIP traffic only would require ISPs to invade users privacy by inspecting their traffic, the FCC then could extend the nondiscrimination and no-blocking rules to all traffic. 52 It used a similar tail-wagging-the-dog rationale with respect to video services, reasoning that because the Act prohibits cable companies from interfering with satellite broadcasters transmission of satellite programming, the Commission could prohibit ISPs from interfering with video traffic, some of which might be satellite programming webcast by satellite providers. 53 With respect to mobile providers, the Commission also relied on its authority to license broadcast spectrum in the public interest. 54 Although these alternate rationales are creative, they are each really only partial justifications for the nondiscrimination and no-blocking rules; and to sustain the broad industrywide rules promulgated by the FCC, reviewing courts will likely need to accept the 706 rationale. Given the D.C. Circuit s skeptical approach in the Comcast decision and the somewhat convoluted nature of the 706 rationale, the FCC may have a challenging road ahead. A First Amendment Right? If the Open Internet Order is struck down in court on statutory grounds, and there is a decent chance that it will be, the question of whether ISPs can offer managed services over their networks that they protect from latency should be moot. Obviously, if there are no Open Internet Order rules, ISPs could not be accused of evading them. That being said, as the business cases for dedicated data services further develop (particularly in the video-on-demand and online gaming markets), the current round of legal proceedings may not bring any clarity even if the Order is sustained. The current appeals are likely to focus on the nondiscrimination and no-blocking rules, not on the Commission s approach to specialized services. And, as explained above, the FCC s position on such services is cryptic: although stopping short of imposing any formal rules and proclaiming that such services are permitted, the Order at the same time warns (1) that network operators will face scrutiny if they increase or devote transmission capacity to specialized services without making similar upgrades to their broadband Internet access and (2) that the Commission will subject services to the Open Internet rules if it finds they were created to evade the requirements. 55 This approach puts network providers in something of a bind: although the FCC s warnings may chill ISPs from devoting existing network capacity to bandwidth-intensive specialized services, it also complicates any attempt to seek judicial review because on its face the Order lacks a clear regulation to challenge. Of course, this merely defers rather than precludes judicial review because an ISP facing scrutiny or sanction from the FCC in the future could challenge the relevant portions of the Open Internet Order in the context of an enforcement action. 56 The Order s lack of clarity would pose rather substantial due process hurdles to any attempt by the FCC to penalize ISPs for offering specialized services because ISPs arguably lack notice of any specific sanctions that might follow from acting in a way that matches the Commission s concern or fails to meet its expectations. For instance, although the Order states that the FCC will consider any service created to evade the Open Internet rules to be subject to the same rules as broadband Internet access, 57 it is not at all clear what such evasion would entail. A broad interpretation could have significant effects on network operators ability to use specialized services to deliver content at guaranteed transmission qualities. The Internet is an open platform; virtually any service that utilizes the delivery of data could be delivered over the Internet instead of over a dedicated connection. Therefore, specialized services are bound to compete against services offered by third-party edge providers, and the service providers almost always benefit from being able to protect their own service from latency (which they could do if they offer a specialized service but not if they offer the same service online). If that is what is meant by evasion, it is a broad category indeed. The Chilling Effect of Ambiguity The potential chilling effect of these vague statements is real. The FCC s Internet Policy Principles similarly contained little indication that they

6 might be enforced against ISPs, and yet Comcast still found itself subject to a costly enforcement action. With this recent experience in mind, the Open Internet Order would appear to present a meaningful risk of deterring ISPs from offering bandwidth-intensive specialized services, particularly if the conditions suggested by the FCC that it would be unconcerned about such services only if they are offered over additional network capacity that the ISP adds and devotes to both broadband Internet and the specialized service prove impractical under current market conditions. The Open Internet Order s approach toward specialized services, therefore, raises potential First Amendment difficulties with which the Order itself does not meaningfully engage. The FCC dismissed First Amendment concerns raised by commenters opposed to the Commission s nondiscrimination and no-blocking rules, reasoning that ISPs act as conduits for the speech of others and are not engaged in speech of their own when they carry traffic. 58 Although this analysis differs from holdings of two district courts that have held the provision of Internet access to be protected speech, 59 the reasoning is not altogether implausible in the Internet context, where ISPs are in many cases legally disassociated from speech that third parties transmit over their networks. 60 The FCC did not, however, purport to apply this same analysis to specialized services, where the First Amendment interests are much more substantial. 61 The provision of specialized services can implicate service providers as speakers in ways that the provision of broadband Internet access alone may not. Where a specialized service involves the delivery of content, such as the selection of on-demand videos or online multiplayer games, it involves the service provider in content selection and editorial discretion about what and what not to carry. In this respect, service providers are not unlike cable companies. The selection and retransmission of content is speech, as the Supreme Court held in Turner Broadcasting v. FCC (Turner I), in which it decided that congressional rules requiring cable systems to carry local broadcast channels (must-carry requirements) implicated the First Amendment rights of cable companies. The Court further held that rules that restrict the transmission capacity that cable companies can use for such speech, which render it more difficult for cable programmers to compete for carriage on the limited channels remaining, 62 constitute a burden on speech that the government must justify. 63 Justice O Connor s concurrence aptly analogized must-carry requirements to requiring all bookstores to devote one third of their shelf space to one type of speech while crowding out others. The FCC dismissed this analogy between ISPs and cable providers in the Open Internet Order due to ISPs role as conduits. 64 But it has much more force in the specialized services context: the practical effect of the FCC s approach may well be to limit ISPs to using only a small portion of their own bandwidth to transmit their own content via their own managed services while reserving the bulk of their networks for speech by others over their broadband Internet service, even if the ISP would prefer to engage in more speech and owns the bandwidth capable of transmitting it. This analogy is not perfect. Not every service that an ISP could offer over its transmission facilities would involve the same exercise of First Amendment rights. VoIP services, for instance, are more akin to Internet access, where the service provider acts as a pure conduit for the speech of others rather than as a speaker. But it is difficult to deny that many of the managed services that an ISP might offer alongside Internet access involve precisely the same kinds of First Amendment interests recognized in Turner I. If the Open Internet Order will in fact operate as a de facto requirement that ISPs can transmit their own speech via specialized services only on economically burdensome terms (i.e., if they make improvements to their network capacity that they share with their broadband Internet access service and may not divert meaningful existing transmission capacity toward specialized services without first making such network improvements), it is far from obvious that those requirements would survive First Amendment scrutiny. At the very least, the issue deserves more thorough analysis than the Commission gave it in the Open Internet Order, and a service provider resisting those requirements should have a colorable constitutional defense. Intermediate or Strict Scrutiny? Because the FCC s approach does not appear to be content-based or triggered by the contents of ISPs specialized services but is rather skeptical of any use of an ISP s transmission facilities that saps bandwidth away from broadband service, courts would most likely approach it, as in Turner I, as a restriction on expressive conduct subject to intermediate scrutiny rather than a pure speech restriction subject to strict scrutiny. The Open Internet Order itself reasoned that the nondiscrimination and no-blocking rules could survive intermediate scrutiny on the theory that preserving the openness of the Internet is an important governmental interest. 65 Although it did so in the context of the nondiscrimination, no-blocking, and transparency rules, the same reasoning should apply with respect to specialized services. However, reliance on this governmental interest for constitutional purposes has the potential to create some difficulties for the FCC. As discussed above, the FCC does not have any statutory responsibility to ensure an open Internet. Its statutory basis for the Open Internet Order rests on a rather complicated causal chain linking its policies back to increased broadband investment and deployment. There have been cases in which the courts have been skeptical of governmental interests in the constitutional context when those interests are asserted by the wrong level of government. 66 This factor could complicate the FCC s defense of its policies here; if limited to a defense based on the government interest in promoting increased investment in broadband infrastructure, the Commission might have a more difficult time satisfying the intermediate scrutiny standard. That is because restrictions on expressive conduct must also be justified by a showing that they will in fact advance those interests and that they do not burden substantially more speech than is necessary to further the government s legitimate interests. 67 The burdens on specialized services potentially created in the Open Internet Order context are more modest

7 than they were for cable companies in the 1990s. Whereas must-carry requirements have the effect of crowding out other stations that a cable company may wish to offer, nothing prevents ISPs from transmitting any content that they wish to offer over the Internet, just like their competitors, instead of using their own dedicated connection to do so. However, as explained above, for some kinds of speech, such as online games, the inability to guarantee a continuous and high-quality connection (which may not always be possible on the public Internet) can operate as a significant burden on the speech, which is why a potential market for specialized services may exist in the first place. It is far from obvious that the FCC would be able to make this showing. As Turner I made clear, whether or not a policy supports a governmental interest as claimed is, for constitutional purposes, an inquiry in which the courts will not automatically defer to the judgment of the FCC (or Congress) but will independently engage in fact finding to assess the credibility of the causal relationship asserted. 68 If the FCC interest at stake is the preservation of competition in online services or an open Internet more generally, it remains to be seen whether the FCC would be able to come up with sufficient evidence to support the necessity of limitations on specialized services in order to protect edge services from ISPs competitive advantage. And if the FCC is forced to rely on its statutory interest in promoting broadband infrastructure investment, there are good reasons to be skeptical that those arguments would hold up in court. ISPs would have a decent argument that if the goal is to make sure that enough money is invested in expanding broadband access to all Americans, that goal could be equally furthered without burdening the speech of ISPs that want to provide content services to their customers. And where constitutional rights are at stake, as they are here, even if the Open Internet Order does not give them much credit, the FCC s multistep causal chain linking its net neutrality policies to its statutory responsibilities may not receive much deference. Endnotes 1. In re Preserving the Open Internet, Report and Order, 25 FCC Rcd. 17,905 (2010) [hereinafter Open Internet Order or Order]. 2. Id. at 17,966, See In re Formal Complaint of Free Press & Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to- Peer Applications, Memorandum Opinion and Order, 23 FCC Rcd. 13,028 (2008), vacated, Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010) [hereinafter Comcast BitTorrent Order]. 4. In re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, Policy Statement, 20 FCC Rcd. 14,986, 14,987 88, 4 (2005) [hereinafter Internet Policy Principles]. 5. See In re Preserving the Open Internet, Notice of Proposed Rulemaking, 24 FCC Rcd. 13,064 (2009) [hereinafter Open Internet NPRM]. 6. Open Internet Order, supra note 1, at 17,906, Id. 8. Id. 9. Id. 10. Id. at 17,916 19, Id. 12. Id. at 17,919 20, Open Internet NPRM, supra note 5, at 13,095 97, Id. at 13,073 74, See, e.g., Comments of Charter Communications in Response to Open Internet NPRM; Comments of Verizon Communications in response to Open Internet NPRM at Open Internet Order, supra note 1, at See Further Inquiry into Two Under-Developed Issues in the Open Internet Proceeding, Public Notice, 25 FCC Rcd. 12,637, 12, (2010). 18. Id. 19. Id. 20. Id. 21. Open Internet Order, supra note 1, at17,938 39, Id. at 17,966, Id. at 17,965 66, Id. at 17,928, See Comcast BitTorrent Order, supra note Id. Dissenting Statement of Commissioner Robert M. McDowell. 27. See H.R.J. Res. 200, 112th Cong. (2011) (as passed by House, Apr. 5, 2011). 28. Although petitions for review of an agency rule making can normally be brought in any federal appeals court with jurisdiction, see 28 U.S.C. 158; 47 U.S.C. 402(a), there is a limited set of circumstances in which only the D.C. Circuit has direct review of the FCC. See 47 U.S.C. 402(b). On the theory that the Order modifies the terms of their wireless licenses, one of the actions about which review of FCC orders lies exclusively in the D.C. Circuit, Verizon and MetroPCS tried to file a direct appeal of the Order. They even moved to have their appeal heard by the same panel that issued the Comcast decision, which expressed skepticism about the Commission s authority (discussed below), although the panel denied the latter request. Verizon v. FCC, No (D.C. Cir. Feb. 2, 2011) (per curiam). Supporters of the Order, of course, have an incentive to push judicial review to some other court, and there have been rumors that groups that support the rules may file their own petitions for review in other courts simply to trigger a judicial lottery. For now, the FCC has successfully moved to dismiss Verizon s and MetroPCS s initial appeals as premature; the Order has not yet been published in the Federal Register. See Order Granting Motion to Dismiss in Case Nos and (D.C. Cir. Apr. 4, 2011) U.S.C See 47 U.S.C. 254(b)(6), (c)(3). 31. See 47 U.S.C See 47 U.S.C See 47 U.S.C. 153(50). 34. See 47 U.S.C. 153(51), (54). 35. See In re Inquiry Concerning High- Speed Access to the Internet over Cable and Other Facilities, Declaratory Ruling and Notice of Proposed Rulemaking, 17 FCC Rcd. 4798, 4802, 7 (2002), aff d in part, vacated in part sub nom., Brand X Internet Servs. v. FCC, 345 F.3d 1120 (9th Cir. 2003), rev d, 545 U.S. 967 (2005). 36. See Nat l Cable & Telecommc ns. Ass n v. Brand X Internet Servs., 545 U.S. 967 (2005) U.S.C See United States v. Sw. Cable Co., 392 U.S. 157 (1968); United States v. Midwest Video Corp., 406 U.S. 649 (1972). 39. See Internet Policy Principles, supra note 4, at 14, & n See In re Madison River Commc ns, LLC & Affiliated Cos., Consent Decree, 20 FCC Rcd (FCC Enforcement Bureau 2005). 41. See Comcast BitTorrent Order, supra note See Open Internet NPRM, supra note 5, at 13,099,

8 43. Comcast v. FCC, 600 F.3d 642, 651 (D.C. Cir. 2010). 44. See FCC v. Midwest Video Corp., 440 U.S. 689 (1979). 45. Comcast, 600 F.3d at See 47 U.S.C In re Framework for Broadband Internet Service, Notice of Inquiry, 25 FCC Rcd (2010) U.S.C See In re Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, As Amended by the Broadband Data Improvement Act, Report, 25 FCC Rcd (July 20, 2010) U.S.C. 1302(b). 51. Open Internet Order, supra note 1, at 17,927 29, 17,969 70, 38, 40, Id. at 17,972 73, Id. at 17,975 78, Id. at 17,978 80, Id. at 17,965 66, Functional Music, Inc. v. FCC, 274 F.2d 543 (D.C. Cir. 1959). 57. Open Internet Order, supra note 1, at 17,965 66, Id. at 17,981 84, See Ill. Bell Tel. Co. v. Vill. of Itasca, 503 F. Supp. 2d 928, (N.D. Ill. 2007); Comcast Cablevision of Broward County, Inc. v. Broward County, 124 F. Supp. 2d 685, (S.D. Fla. 2000). 60. See, e.g., 17 U.S.C. 512(a) (safe harbor for ISPs for third-party violation of copyright laws over their transmission facilities); 47 U.S.C. 230(c)(1) (immunity for online computer services for tort liability arising from information provided by third parties). 61. Id. 62. Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 637 (1994) [hereinafter Turner I]. 63. Id. at Open Internet Order, supra note 1, at 17,982 83, Id. at 17,984, See, e.g., City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 444 (1985) (governmental interests must be properly cognizable by particular governmental body at issue); Bd. of Trs. of the Univ. of Ala. v. Garrett, 531 U.S. 356, 366 (2001) (governmental body at issue must have the authority to implement the interests asserted); Hampton v. Mow Sun Wong, 426 U.S. 88, (1976) (agency could not justify rule barring employment of aliens because asserted interests in encouraging nationalization were not matters which are properly the business of the Commission ). 67. Turner I, 512 U.S. at 662 (citing Ward v. Rock Against Racism, 491 U.S. 781, 799 (1989)). 68. Id. at

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