Agencies Can Change Policies Under New Leadership, FCC Attorneys Say, Citing Title II Fight
Agencies can change their minds about regulation due to leadership shifts, a dynamic that applies to broadband reclassifications, said FCC senior litigation officials at an FCBA event Tuesday evening. It's settled law that changes in administration bring changes in policy, said Jacob Lewis, associate general counsel, suggesting Chevron judicial deference applies. That agencies can change course after administration changes is nothing new, as 1984's Chevron was about a Reagan administration EPA change from the Carter administration policy, said Richard Welch, deputy associate general counsel. He noted they spoke only for themselves.
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Lewis recalled he was asked about possible further reclassifications in June 2016, just after the U.S. Court of Appeals for the D.C. Circuit upheld the Democratic-led FCC on its 2015 reclassification of broadband from a Title I information service to a Title II telecom service under the Communications Act. He said Tuesday he believed then a future FCC could return to Title I if it were taken over by Republicans. Welch said the current GOP-controlled FCC is getting ready to test that proposition in Mozilla v. FCC, No. 18-1051, involving challenges to the recent "internet freedom" order reversing the 2015 Title II net neutrality regulation. Lewis and Welch expressed some wariness at a June 2016 FCBA event about the possibility they would have to defend further reclassifications, though they didn't rule it out (see 1606240018).
An agency can potentially oscillate "an unlimited" number of times under Chevron, as long as it explains and justifies its actions, Lewis said Tuesday, answering a question about the possibility a future FCC could return to Title II if the Democrats take over the commission in 2021. The range of allowed policy changes might grow "narrower and narrower" over time, Lewis suggested. He noted some judges questioned the wisdom of the doctrine, under which courts defer to the discretion of reasonable expert agency interpretations of ambiguous statutes. He asked whether Chevron will still be the law in 2021.
Welch said there's clear precedent for agency policy changes being entitled to Chevron deference at least once, but it's less clear whether that deference applies to multiple changes. "We're in uncharted territory," he said. The recent order justified returning to Title I as the best reading of the statute -- one that the Supreme Court already upheld under Chevron in a 2005 Brand X ruling -- and as eliminating heavy-handed "utility-style" Title II net neutrality regulation that discouraged broadband investment.
Reviewing past and present FCC cases, Welch noted the Supreme Court is scheduled to consider at its Thursday conference a cert petition asking it to review a D.C. Circuit ruling upholding the commission's decision to deny small-business designated entity bidding credits to two companies in a spectrum auction due to their ties to Dish Network in SNR Wireless v. FCC, No. 17-1058. Noting another DE case pending in the 3rd Circuit, Council Tree Investors v. FCC, Welch quipped that whenever the commission tightens DE rules, "the sun rises in the east; the sun sets in the west; and Council Tree Investors sue us." He said the same was true about Sorenson Communications, noting its latest challenge to video relay service rate decisions, No. 17-1198 pending in the D.C. Circuit, which held oral argument May 7 (see 1805070045). He also said a big reason Telephone Consumer Protection Act enforcement has been so contentious is that the law gives parties a private right of action backed up by penalties of up to $500 per violation, creating large corporate caller liability exposure under class-action lawsuits.
Another key case to watch concerns media ownership and a challenge in the D.C. Circuit to the FCC's reinstatement of a TV UHF discount in Free Press v. FCC, No. 17-1129 (see 1804200059), said Welch and FCC General Counsel Thomas Johnson, who spoke earlier at the event.
Johnson said he meets "fairly regularly" with counterparts at DOJ, which generally joins the FCC in litigation. The FCC doesn't ask the DOJ to draft its briefs, but the agency does seek the department's input, he said. He said it's helpful to have contacts in other agencies such as the FTC, and with Team Telecom departments, which review foreign takeovers of U.S. communications assets. Asked if he would argue any cases before judges, Johnson said most FCC general counsels will argue a case or two but need to be selective, given the time it takes to prepare: "Maybe in the next year" or so.