With Litigation Certain, Congress Should Guide FCC on Internet Regulation

For the high-tech crowd, 2015 started with a strong sense of déjà vu. Once again the focus is on net neutrality, an issue that rose in prominence in 2006 and was believed to be settled when the Federal Communications Commission (FCC) issued its Open Internet Order in 2010. That order was struck down, and the debate started again. However, a promising legislative solution floated this year could mark 2015 as the year the decade-long net-neutrality issue can be put to bed.

But the FCC -- at the direction of the White House -- has decided to move forward on a hasty plan to regulate the Internet as if it were limited to providing voice service. This is the wrong approach for many reasons, but one in particular is paramount: The Title II approach will ensure litigation for years to come. This litigation will perpetuate a regulatory overhang in the communications sector and take precious resources and attention away from other, critical policy issues facing the FCC.

Consider the fact that the Administrative Procedure Act (APA) requires that any rules ultimately adopted have sufficient notice. Courts frequently throw out agency orders that weren't properly foreshadowed. The FCC's proposed net neutrality rules, upon which more than 4 million comments were submitted, did not solicit comment on the FCC pursuing a Title II approach. The Title II approach didn't become part of the FCC's lexicon until after the White House pushed the agency to pursue this path late last year. Even more compelling for potential litigants is the fact that the FCC tentatively concluded it would stick with the "status quo" for wireless broadband back in 2014 but is now indicating that it is pursuing Title II for wireless broadband as well.

Issues in mobile broadband also point to endless litigation over Title II without a congressional solution. Section 332 of the Communications Act unambiguously exempts non-voice services like mobile broadband from common carriage regulation. It's a settled matter at the D.C. Circuit Court, which held in the last net-neutrality challenge that "mobile-data providers are statutorily immune, perhaps twice over, from treatment as common carriers." Any FCC attempt to apply Title II to mobile broadband will almost certainly be struck down.

The FCC chairman has publicly acknowledged that lengthy, and most likely messy, litigation will follow any action the agency takes to apply Title II to the Internet. This confirms fears among labor unions, consumers, investors, service providers and innovators that the communications sector will exist under a cloud of uncertainty indefinitely. Congress has an opportunity right now to resolve this uncertainty and put the country's focus back on the critical task of achieving the president's goals of getting more and faster broadband out to all Americans. The FCC has consistently failed in creating lasting net-neutrality rules for lack of authority. Since Congress gives the FCC its authority, the obvious answer is legislation that actually gives the FCC the authority to legally preserve open-Internet principles rather than the risky and unnecessary pursuit of Title II regulation.

The FCC's change in tack has innovators and their investors very concerned. In a letter to the FCC just last week, Internet pioneers and investors expressed their concern that the commission appears poised to eviscerate the principle that information services are fundamentally different from and should not be regulated like telecommunications. They point out that "the contradiction of the desire to implement open Internet rules by ending the unregulated paradigm responsible for creating the vibrant Internet ecosystem continues to make imposing Title II on IP networks unthinkable." Put simply, Title II's heavy-handed regulation is the opposite of the conditions that allowed the Internet to thrive.

Indeed, Title II is a relic from a bygone era of rotary dial-tone phones, when voice calls were the only way to communicate outside the postal service and in-person conversation. Title II's age means it includes all sorts of regulations that do not or should not apply to modern Internet services. Given all the legal uncertainty, congressional Democrats should be jumping at the chance to enact a net-neutrality bill that protects consumers and gives clear direction to the FCC.

Today's communications market is a vibrant, complicated and interrelated marketplace that provides consumers with access to the Internet from any device, anywhere, anytime. Pretending that protecting consumers and spurring innovation is best accomplished through laws enacted before the Internet ever existed is absurd. Furthermore, pretending that one swipe of the forbearance wand will cure all the ills that come with archaic utility regulation is equally absurd and legally specious.

The question Democrats have to ask themselves is what they actually want. If they want the tough net-neutrality principles that FCC Chairman Tom Wheeler and President Obama have articulated, then legislation gives them the opportunity to enshrine open-Internet principles without incurring all the problems, legal and otherwise, created by Title II. Resolving the policy debate over net neutrality is an issue ripe for congressional action. FTC Chairwoman Ramirez echoed this very point just this month at the Consumer Electronics Show.

President Obama has openly pushed for Title II regulation, and Wheeler has repeated the call. But the reality is that Title II is not the right tool for the FCC to preserve an open Internet and unnecessarily risks rending the very fabric that has made the Internet such a successful growth engine for the country's digital economy. Now is the time to return Internet policymaking to its bipartisan congressional roots.

David Balto served as policy director at the Federal Trade Commission's Bureau of Competition, and attorney-advisor to the FTC chairman.