NCTA Confident of Winning Case Against Title II, Less so on Stay Bid
NCTA representatives said they were much more confident Wednesday of ultimately overturning the FCC’s net neutrality and broadband reclassification order than they were of securing a court stay pending further review. They also suggested they were unlikely to appeal if a panel of the U.S. Court of Appeals for the D.C. Circuit denies their stay request.
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Speaking at a briefing on his group’s challenge to the FCC’s order reclassifying broadband Internet access as a Communications Act Title II telecom service, NCTA President Michael Powell said “we have every expectation of winning” the “very monumental” case on the merits. “What the FCC did here is so clearly wrong . … We’re confident of what the outcome will be,” said NCTA outside counsel Ted Olson. Miguel Estrada, another NCTA outside counsel, said he's “pretty sure” the FCC’s legal justifications “will not be palatable with the court.”
But when asked about their confidence the D.C. Circuit panel will issue a stay blocking the Title II broadband reclassification and an Internet conduct standard, Estrada said, “It’s very difficult to say.” Estrada noted a stay not only requires petitioners to demonstrate some likelihood of winning the underlying case on the merits, but also that they would suffer irreparable harm absent a stay. Although NCTA believes it made a “compelling showing” of irreparable harm, Estrada said, there’s not a lot of court guidance on whether the harm in this case has “risen to a critical point or just a near-critical point.” When it comes to stay requests, “it’s the irreparable nature [of harm] that’s problematic,” Powell said; judges have to be convinced “you’re going to be harmed in a way that can’t be fixed.”
Scott Cleland, chairman of NetCompetition, which is supported by broadband interests, said the irreparable harm standard makes court stay requests generally steep uphill battles. But in this case, “I think it’s very likely we’ll see a stay of the Title II part of the order because I believe the D.C. Circuit will uphold the rule of law and not make a political call,” he told us.
Asked if NCTA would appeal a stay denial, Estrada suggested it wouldn't, saying, “I think we just move forward on an expedited basis.” He said NCTA brought the case to win on the merits. Asked if he agreed NCTA wouldn’t appeal a stay denial, Powell said, “He’s our lawyer and I think he’s fairly representing our position.” That said, Powell said NCTA would make a final decision if and when a stay denial is issued. An FCC spokeswoman said her agency remained confident the court would reject a stay.
The cable/telco petitioners have asked the D.C. Circuit panel to decide on their stay request before the net neutrality order takes effect June 12. Estrada said a stay ruling could come any day. After that, he thinks it’s likely the court will issue an expedited briefing schedule for this summer and fall, with oral argument on the underlying legal challenges likely in December or January, and a ruling about three months after that. While Estrada was confident the D.C. Circuit would agree with petitioners in overturning the Title II decision, “if by some miracle the FCC wins,” he predicted the Supreme Court would be interested in reviewing an appeal.
Estrada and Olson called Title II common-carriage “utility” regulation a 19th century relic and said its application to broadband was unauthorized and counterproductive. The FCC regulatory scheme is “manifestly contrary to congressional policy” and violated the Administrative Procedure Act “in all kinds of ways” by not allowing for proper notice and public comment, Olson said. It will “stifle, suffocate, and strangle” the creativity and innovation that have been the hallmark of the Internet, he said: “It’s the paradigm of killing the golden goose.”
Powell said Title II was a monopolist’s dream because it raised barriers to entry by new players and deterred investment, while incumbents have been “playing the regulatory game” for 100 years. He disputed arguments that recent cable deals, including the planned takeover of Suddenlink by the European company Altice, proved Title II wasn't discouraging broadband investment. “You’re telling me companies buying companies is investment?” he said. Real investment is spending to create bigger broadband pipes, not “every time a check is written” in a transaction, he said. He noted Verizon could have invested $4.4 billion in its broadband networks rather than buying AOL.
Powell also disputed that the more than $40 billion in winning bids in the AWS-3 auction showed Title II wasn't deterring investment. “I love this argument,” he said, calling wireless broadband the same service that the FCC says isn't a competitor to wireline broadband. “They’re conveniently writing that service out,” he said. “Nobody is saying we’re not going to spend money. Of course we are,” he said. “And we’ll continue to build out networks. But what about the velocity?”
Powell said NCTA was “100 percent supportive” of enacting legislation that would codify the FCC’s “bright-line” net neutrality principles while avoiding the harms of its current order. Such legislation is the "only viable path" to a permanent solution, he said.