Verizon to FCC Chairman: Net Neutrality Litigation Not Unavoidable

By Josh Long

Verizon last Friday implied that the Federal Communications Commission could avoid a legal challenge from the New York-based telecommunications titan if the agency chooses a specific path in regulating the Internet. 

A Verizon executive seemed to remind FCC Chairman Tom Wheeler that Verizon doesn’t intend to challenge the Commission’s forthcoming Net neutrality regulations if the agency bases its authority on Section 706 of the Telecommunications Act of 1996.

Randal Milch, general counsel of Verizon, fired off an email to Wheeler in response to his prediction in public comments that a lawsuit was inevitable by the “big dogs.”  

“I saw reports of your comments today, and in particular your view of the inevitability of litigating challenging the Commission’s eventual Open Internet rules,” Milch wrote in the email. “I hope you might be interested in a short analysis I wrote on that very subject … where I describe why Open Internet rules based on Section 706 and which prohibit ‘paid prioritization’ will not be the object of a successful court challenge — by Verizon or anyone else.”

Milch referenced a blog he wrote earlier this month. If the Commission bases its regulations on Section 706, he blogged, “then the possibility that a rule prohibiting paid prioritization will be overturned is essentially eliminated, and the chances that there will even be appeals of the rules are reduced considerably.”

Paid prioritization refers to hypothetical deals in which broadband providers would grant certain websites priority, or quick access to consumers without excessive buffering and other interruptions in service, through negotiated contracts with content providers like Amazon and Netflix. Although the commercial agreements could grant consumers seamless access to streaming movies and other Web-based services, opponents of paid prioritization worry that the deals would create fast and slow lanes — handicapping certain Internet content and endangering the openness of the Internet.

Verizon and other large ISPs are concerned that the FCC will subject broadband providers to more onerous regulations under Title II of the Communications Act of 1934.

“Calls to use this proceeding to impose a host of additional regulatory controls on broadband Internet access providers should be firmly rejected, particularly because the record is devoid of evidence of any actual threat to Internet openness that could possibly warrant heavy-handed regulation,” AT&T wrote in an FCC filing over the summer.

Early this year, the U.S. Court of Appeals for the District of Columbia Circuit vacated Net neutrality regulations adopted by the FCC in 2010. The panel of judges found the FCC could invoke its authority under Section 706 to regulate Internet traffic — but for the fact that it had decided to exempt broadband providers from so-called common carrier regulations. The appeals court threw out the FCC’s anti-blocking and anti-discrimination rules, but left alone certain disclosure requirements related to network management.

“The Commission … has reasonably interpreted section 706 to empower it to promulgate rules governing broadband providers’ treatment of Internet traffic, and its justification for the specific rules at issue here – that they will preserve and facilitate the “virtuous circle” of innovation that has driven the explosive growth of the Internet – is reasonable and supported by substantial evidence,” Circuit Judge David S. Tatel wrote in the decision. “That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such.”