Net Neutrality Takes Effect; Legal Focus on Merits, Not Stay Denial Appeals?
The FCC's net neutrality and broadband reclassification order took effect Friday and is now the law -- at least for the time being -- after a panel of the U.S. Court of Appeals for the D.C. Circuit Thursday refused to grant telco and cable petitioners a stay of two parts of the order, but agreed to expedite review of the underlying legal challenges to the order (see 1506110048). The ruling wasn't a surprise, even to most stay proponents seeking to block an Internet conduct standard and the reclassification of broadband access as a telecom service under Title II of the Communications Act.
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Policymakers, industry officials and others appeared to be busy surveying the legal, policy and market landscape and weighing their next steps. Most of the telco/cable petitioners appeared ready to move on from the stay phase to pursuing their substantive legal challenges to the net neutrality order, but others appeared to still be mulling their options. If no one appeals the stay denial, the focus will shift to the court review of the challenges.
The FCC's net neutrality regulation and Title II broadband oversight give competitors and critics of telco/cable ISPs the ability to file complaints at the FCC over practices that allegedly violate new bright-line rules against Internet blocking, throttling and paid prioritization, or the spirit of the more general Internet conduct standard. The regulatory backstop could give telco/cable rivals added leverage in business negotiations over IP interconnection and other market arrangements.
Cogent, which has said it would consider filing complaints over IP interconnection, for now is looking to negotiate further interconnection agreements. "I sincerely hope that everybody obeys the law and fulfills their obligations to their customers, and I don't have to file any complaints," Cogent CEO Dave Schaeffer told us. "That said, we are prepared and willing to file those complaints if need be." Schaeffer said Cogent recently signed interconnection agreements with AT&T and Verizon, and reached something of an understanding with Comcast, which he said has upgraded capacity but hasn't signed a full agreement. "They've just behaved as if there's an agreement," he said. "If they're honoring it without an agreement, you don't need an agreement. I have an enforcement mechanism now [at the FCC]. I would love to get something in writing, but I'm not obsessed with it." Schaeffer said Cogent is in interconnection talks with Time Warner Cable, CenturyLink, Telefonica, Deutsche Telekom and Orange. "The other 44,000 networks that make up the Internet have all been good actors," he said. Representatives of Level 3 and Netflix didn't respond to our queries.
CenturyLink, CTIA and USTelecom representatives indicated Friday they didn't plan to appeal the stay decision. "We are focused on the expedited review of the merits of the FCC's decision rather than on the appeal of the stay decision," said a USTelecom spokeswoman. NCTA issued a statement Thursday saying: "We are now ready to get to the merits of the case and are confident as ever that we will prevail." A spokesman had no further comment Friday. Representatives of the American Cable Association, AT&T and Wireless Internet Service Providers Association had no comment.
To implement expedited review, the D.C. Circuit panel directed the litigating parties to file a proposed briefing format and schedule by June 25. Speaking June 3, NCTA outside counsel Miguel Estrada said he thought it was 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 an initial ruling on the merits about three months after that. Most of those we spoke to Friday said they thought that timetable was plausible.
One attorney supporting the FCC net neutrality order and broadband reclassification said his side "very much wanted to expedite the case because we want the D.C. Circuit litigation resolved before January 2017." That's when a new administration takes over, which, if it's Republican, could change the FCC's stance on appealing the net neutrality order if the agency were to lose at the D.C. Circuit. On the other side, while Estrada was confident on June 3 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.