April 22, 2015 | Commentary on Regulation, Internet And Technology

What’s next under the net neutrality big top?

Telecommunications policymaking has long been compared to a three-ring circus consisting of the Federal Communications Commission, the courts and Congress. Nowhere has that been truer than in the long-running debate over net neutrality regulation.

For the past year or so, all attention has been on the FCC, led by Chairman Tom Wheeler, as it drafted its plan to impose regulation on Internet service providers such as Verizon and AT&T. Its goal was to require that all data carried by the ISPs be handled the same way, with no discounts or premium service offerings.

The approach it settled on — declaring ISPs to be public utilities under the 1934 Communications Act — startled even many supporters of neutrality regulation. In effect, Americans’ Internet access was to be provided under the same regulatory framework as their local water company. Adopted in February, the FCC’s decision was printed in the Federal Register last week.

This, however, was not the end of the show. The Federal Register notice cleared the way for action to begin in the second ring in this circus: the courts. Within days, a half-dozen lawsuits were filed challenging the FCC’s new rules. The plaintiffs were four trade associations representing ISPs, as well as two ISPs that sued on their own behalf — AT&T and Alamo Broadband, a small wireless provider.

This, of course, is not the first time the net neutrality issue has been in a courtroom. Twice before, the FCC has tried to impose restrictions on ISPs. Each time, the FCC’s action was decisively struck down, with courts finding — among other things — that the FCC had no authority to regulate firms that were not common carriers.

Will the plaintiffs win in court a third time? The FCC says no, pointing to the fact that, by reclassifying ISPs as common carriers, it has fixed its earlier problem. But the ISPs will argue that the FCC’s decision to reclassify them as common, or telecommunications carriers was arbitrary — a political decision aimed at expanding the agencies’ own power rather than a reasoned decision based on the statutory definition of the term “telecommunications carrier.”

President Obama added to the perception that this was merely a political decision by intervening in the FCC’s supposedly independent decision-making process just a few months before the commission’s vote. In an unusual and controversial move, the president openly and forcefully called on the FCC to declare ISPs to be common carriers. Until that time, Mr. Wheeler was opposed to such a reclassification

Under clear pressure from the White House, Mr. Wheeler abruptly reversed himself, saying — implausibly — that he had simply rethought the issue. There is nothing illegal about the president inserting himself into the process, but his actions may diminish the normal deference courts give regulators when they are making decisions like this.

Whatever the outcome in court, there is still a third ring to watch: Congress. Activity there is already underway, with bills by Republican Reps. Marsha Blackburn of Tennessee and Doug Collins of Georgia seeking to roll back the FCC’s decision. GOP leaders are also floating a compromise plan that they hope will attract Democratic support.

For now, however, all of this is just preview. Given the president’s investment in the issue, no FCC-reversing net neutrality bill can conceivably be enacted into law as long as Mr. Obama wields the veto pen.

Congress‘ turn in the spotlight will come after Mr. Obama leaves the stage. This, coincidentally, should be about the same time that the courts decide on the issue — sending the losers, whoever they may be, straight to Capitol Hill for redress.

At this point, there is no telling how or when the net neutrality battle will end. But one thing is clear: The current law’s opaque and ambiguous terminology reduces predictability and accountability in the online communications system. That only feeds the three-ring circus, and that’s unfortunate. Washington has more than enough clowns already.

 - James Gattuso is the senior research fellow in regulatory policy at The Heritage Foundation.

About the Author

James L. Gattuso Senior Research Fellow in Regulatory Policy
Thomas A. Roe Institute for Economic Policy Studies

Originally appeared in The Washington Times