FCC Can't Legally Reclassify Mobile Broadband as Title II Service, Verizon Says

Verizon reported on a meeting company officials held with Wireless Bureau Chief Roger Sherman, Associate General Counsel Stephanie Weiner and other FCC officials. Arguments in favor of reclassifying mobile broadband are “foreclosed by the express statutory restriction in Section 332(c)” in the Communications Act “against applying common carriage requirements to private mobile services such as broadband Internet access,” Verizon said. “Claims to the contrary are misplaced.”

Congress dealt with the issue explicitly in 1993 amendments to the Communications Act, Verizon said. Congress amended the act “to ensure like treatment of competing forms of mobile voice services and to preclude common carriage regulation of the evolving private mobile wireless marketplace,” the carrier said. In Section 332(c)(2), Congress drew a line between two categories of wireless services, “commercial mobile services” (CMRS) and “private mobile services” (PMRS), it said. “That section expressly limited common-carriage regulation to ‘commercial mobile services,’ which it defined to include services offering interconnection with ‘the public switched network,’ or their functional equivalent,” Verizon said. “Congress also indicated that providers of PMRS (i.e., services not interconnected with the public switched network) ‘shall not be treated as a common carrier for any purpose under this [Act].’”

In a 2007 declaratory ruling, the FCC said “wireless broadband Internet access services could not be CMRS, because they were not interconnected with the public switched network,” Verizon said. The FCC reiterated at the time that use of the North American Numbering Plan “is a central component of the ‘public switched network’ [PSTN] and thus a necessary precondition to labeling a service CMRS,” the carrier said. The use of VoIP on wireless networks doesn't permit access to the PSTN and makes wireless an interconnected CMRS service, Verizon said: “As the Commission recognized in 2007, there is a critical distinction between a broadband service and the various applications and services that use it.” In addition, the FCC’s policy for decades has been to classify services “based on their own properties, not the properties of distinct services that ride over them,” Verizon said.

Verizon is simply wrong in its legal arguments, Free Press Policy Director Matt Wood said in response Monday. Mobile broadband is already “interconnected” to the PSTN, he said. “I can call any number I like with any Voice over IP app I want. But even [if] not, the statute gives the FCC clear authority to modify the definitions of what qualifies as an interconnected service or its functional equivalent.” Wood expects a legal challenge if the FCC, as expected, reclassifies broadband. “Sure, carriers will sue. That's what they do,” he said. “The difference between the last two times and this one though is that if the FCC reclassifies it will be going with its strongest argument instead of an untenable compromise.”

The arguments Verizon makes “keep popping up,” said John Bergmayer, Public Knowledge senior staff attorney. “They're not new, so it would be odd to think that the FCC had not already considered them,” he said. “It's not likely that the wireless carriers are going to pull some legal rabbit out of a hat at this late date that will significantly change the FCC's basic approach.”

The FCC and Chairman Tom Wheeler are “in a tough spot” given the pressure from President Barack Obama to reclassify broadband as a common carrier service (see 1411100035), said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. The FCC should proceed with care and take the time it needs to reach a decision, he said. “I worry recent pressure on the FCC to ‘act without delay’ on Title II will backfire and result in an even more protracted mess,” Brake said. “I think if we are to have any hope getting lasting rules out of this, the commission should get the process right with another notice.”

“Wheeler has an enormous problem,” TechFreedom President Berin Szoka said. “Politically, he faces intense pressure to reclassify both mobile and fixed broadband under Title II. Legally, he can't impose Title II on mobile broadband. Verizon and CTIA are right.” The question before the FCC raises big issues for the FCC and the Chevron doctrine deference it will receive by an appeals court, Szoka said. Courts use the doctrine, stemming from a 1984 Supreme Court case, to weigh how much deference to give an administrative agency like the FCC. “Is Section 332 ambiguous as to the meaning of ‘public switched network’?” he asked. “And, if so, is it reasonable for the FCC to interpret that term to mean ‘the Internet’? I think the answer to both questions is pretty clearly no, for all the reasons Verizon lays out. But in the land of Chevron deference, nothing is clear-cut.”

Wheeler is left with three choices, Szoka said. He can “split the baby” and reclassify fixed broadband while seeking further comment on mobile, issue an order that reclassifies both, or hope Congress extends the rules to cover wireless, Szoka said. “In short, all roads lead back to legislation.” Net neutrality advocates' insistence on a course likely to be overturned in court doesn’t make sense unless they are more interested in fundraising and building their mailing lists than in getting a rule that will survive legal challenge, he said.