USTelecom and Its Aftermath

Abstract

In 2015, the Federal Communications Commission made the controversial decision to reclassify broadband Internet access as a common carrier “telecommunications” service under Title II of the Communications Act. While much of the debate has focused on the legality of reclassification, little attention has been paid to actual implementation. As detailed in this Bulletin, a proper implementation of Title II precluded the Commission’s approach, forcing the Agency to ignore the “vast majority of rules adopted under Title II” and “tailor[] [Title II] for the 21st Century.” Surprisingly, the D.C. Circuit found in United States Telecom Association v. FCC that the agency had wide latitude to interpret the Communications Act and not only upheld the agency’s decision to reclassify but also its gross distortion of Title II. In so doing, the D.C. Circuit has extended Chevron deference beyond any reasonable limit, greatly expanding the Commission’s authority well beyond its statutory mandate. This Bulletin first presents several examples of how the 2015 Open Internet Order ignores both the plain language of Title II and the extensive case law to achieve select political objectives, followed by a discussion of the D.C. Circuit’s acceptance of such legal perversions. Next, this Bulletin discusses how the FCC attempted to use the same theory of the case found in USTelecom to regulate the prices of Business Data Services. Conclusions and policy recommendations are at the end.

Keywords: Net Neutrality, Title II, Fifth Amendment, ratemaking, due process, forbearance, just and reasonable

JEL Classification: K23, L51, L96, L98