The Evolution of Net Neutrality Laws

Table of Links

Abstract & Introduction

Definition of Key Terms

Fundamentals of Internet Operation

Encapsulation

Usage-Based Economic Models

Net Neutrality

Legal History

Researcher Conclusions

Areas for Further Exploration & References

7. Legal History

The basis of all legal challenges – either for or against net neutrality legislation lies in determining which agency will regulate the Internet in the U.S., and then what rules that agency will apply.

7.1. 2005 Order

In 2005 the FCC released the first agency guidelines regarding the “open Internet” – the four rules [13]:

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, ...

• consumers are entitled to access the lawful Internet content of their choice.

• consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.

• consumers are entitled to connect their choice of legal devices that do not harm the network.

• consumers are entitled to competition among network providers, application and service providers, and content providers.”

7.2. National Cable & Telecommunications Association v. Brand X Internet Services (2005)

These rules were challenged by industry groups representing the ISPs as being too broad. And greatly complicating the issue down the road, in Section II, Paragraph 4, the FCC specifically states that the ISPs are not Title II but are in fact covered under Title I ancillary.

On June 27, 2005 the United States Supreme Court (applying Chevron deference) upheld a determination by the FCC that cable Internet providers were an "information service," and not a "telecommunications service" as classified under the Telecommunications Act of 1996. Supreme Court Justice Antonin Scalia wrote the dissenting opinion, and we will see that his words would later seem prescient when quoted in the majority opinion ten years later in 2016[15].

7.3. 2010 Open Internet Order

In a 2010 Executive Order, President Obama directed the FCC to formalize regulations regarding Net Neutrality. The 2010 Order applied much of the same oversight of “common carriers” to the ISPs. The 2010 Order laid out three basic principles: transparency, no blocking, and no unreasonable discrimination.

7.4. Verizon Communications Inc. v. FCC (2014)

The 2010 Order was tested in the Supreme Court when Verizon sued the FCC. The Supreme Court ruled that two of the three main principles of the 2010 Order did not fall under the FCC’s jurisdiction of Title I ancillary. The Court upheld the Transparency requirements but found that the other two requirements required the FCC to treat ISPs as “common carriers.” In its findings, the Court suggested some possible fixes. The Court also recognized the “Virtuous Cycle” of edge providers and recognized that ISPs had the “means and the incentive” to disrupt this cycle to the detriment of consumers.

7.5. 2015 REPORT AND ORDER ON REMAND, DECLARATORY RULING, AND ORDER

After a public comments period, the FCC sought to re-define the regulations to define ISPs as “common carriers” and further codify the rules regarding Net Neutrality. In February of 2015 the FCC published the REPORT AND ORDER ON REMAND, DECLARATORY RULING, AND ORDER.

The 2015 Order classifies ISPs under Title II of the Communications Acts of 1934,1996[14] and it gives strict guidelines regarding Net Neutrality. The 2015 Order states no blocking, no throttling, and no paid prioritization. The FCC sited the 2014 Verizon findings in the order and pointed to the Court’s reference to the “Virtuous Cycle” as authority to change the ISP classification to “common carrier.”

7.6. United States Telecom Association v. FCC and Independent Telephone and Telecommunications Alliance (2016).

The large telecom companies sued the FCC, however this time the smaller telecoms joined on the side of the FCC. On June 14 of 2016, the U.S. Court of Appeals for the District of Columbia refused to hear the case, thereby upholding the ruling in USTA v FCC that the FCC had operated under its authority to re-classify the ISPs as “common carriers.”

Circuit Judge Srinivasan joined by Circuit Judge Tatel wrote the majority opinion. Amongst the various considerations was the following [15]:

Justice Scalia’s dissenting opinion [in the 2005 decision], joined by Justices Souter and Ginsburg, went even further. According to Justice Scalia, the statute permitted only one conclusion: cable broadband ISPs “are subject to Title II regulation as common carriers, like their chief competitors [e.g., DSL] who provide Internet access through other technologies.” Id. at 1006 (Scalia, J., dissenting). The agency, in Justice Scalia’s view, had no discretion to conclude otherwise. And he expressly accepted that his reading of the Act would result in “common carrier regulation of all ISPs,” a result he considered “not a worry.” Id. At 1011.

The large telecoms appealed to the U.S. Supreme Court and on November 5th, 2018 the U.S. Supreme Court refused to hear the case, thereby upholding the previous findings.

7.7. 2017 - 2018 FCC Changes Direction

In 2017 President Donald Trump appointed Ajit Pai as Chairman of the FCC. Chairman Pai has changed the FCC’s direction and decided the FCC should not regulate ISPs with regard to Net Neutrality, thereby rendering the Court’s ruling temporarily moot as it applies to the current direction of the FCC. The FCC did stipulate that ISPs must be transparent in any throttling or associated fees.

The Supreme Court’s 2018 finding does however mean that should the FCC change direction again, that the stricter rules would have legal precedence. It may also be cited as precedence in any upcoming legal challenges to the current interpretation.