Politics Likely to Continue Informing FCC Broadband Progress Reports, Observers Say

Chairman Tom Wheeler directed staff to take a fresh look at the broadband progress report when he took office, said an agency official. The report had been on circulation for some time but a quorum of commissioners had not yet voted when Wheeler arrived. Wheeler pushed for a new examination of the underlying data because more recent data had become available, the official said. An agency spokesman did not comment on when the report will be out. Congress directed the agency to examine broadband availability “annually”; it’s approaching two years since the last broadband report came out in August 2012 (CD Aug 22/12 p1).

Republicans have long alleged the broadband reports have become largely political, and a way for the agency to maintain its authority over the Internet. That scenario is unlikely to change even given the new independent authority of subsection (a), said Christopher Yoo, a law professor at the University of Pennsylvania, who was approached by his party for the Republican FCC spot that ultimately went to Mike O'Rielly. “Concluding that the market is meeting the needs of consumers would make it harder to justify intervening under subsection (a), as it would make any regulations harder to justify politically, if not legally,” Yoo said. Yoo said he’s “puzzled” by how the FCC has gone about determining that broadband isn’t being timely deployed. The last broadband report was pessimistic about the “broadband adoption gap” in the U.S.: Fewer than 70 percent of Americans subscribed to fixed broadband. FCC Republicans then dissented, pointing out that broadband was available to 95 percent of the country’s population.

"It is unlikely that the Commission will reverse its relatively new view that broadband is not being deployed in a timely fashion,” said ex-Commissioner Robert McDowell, now a visiting fellow at the Hudson Institute, by email. “That conclusion is the product of the philosophy that underpins current FCC policymaking.” More important than the findings of the broadband report, is how future judicial appellate panels view the Verizon split decision on the agency’s 706 authority, he said. Judge Laurence Silberman of the U.S. Court of Appeals for the D.C. Circuit wrote that the agency and court majority had read the statute too broadly. “The big risk for the FCC as it attempts to thread this legal needle is that its effort to issue new rules governing Internet network management may result in the FCC’s authority being narrowed,” McDowell said. “If the next panel of judges finds the Silberman dissent to be compelling, when compared to whatever it is the Commission will do next, the FCC may find itself on the wrong side of a court rebuke."

An FCC finding that broadband is now being timely deployed “would make it hard to claim authority to act under either 706(a) or 706(b),” said University of Pennsylvania Wharton School professor Kevin Werbach, a member of the FCC transition team when Barack Obama was first elected president. “However, the FCC could argue that the improvement occurred as a result of its open Internet rules,” he said. “Advanced telecommunications capability” -- the focus of 706 -- is “an evolving concept under the statute, so it’s not simply a matter of deploying a particular service and then declaring victory,” he said. “That virtually all Americans have access to what 15 years ago would have been considered good broadband doesn’t mean the FCC’s work is done. The market has evolved tremendously since then, and the requirements for today’s broadband services are greater. It’s the FCC’s job to determine what counts as ’timely deployment’ at any given point."

What’s Reasonable?

The problem is how the FCC defines reasonable and timely, said Phoenix Center President Lawrence Spiwak. That was never a point of contention in Verizon oral argument, he said. “It essentially was ubiquity -- everybody has to get broadband -- and then you had the temporal element, which is ‘now.'” Spiwak pointed to the FCC National Broadband Plan, which found closing the “broadband availability gap” with wired broadband would cost an average of $56,000 per housing unit (http://1.usa.gov/1dJcHa6).

One reasonable way of filling that gap would be with satellite, but the last 706 report explicitly rejected that option, Spiwak said. But the FCC February 2013 “Measuring Broadband America” report (CD Feb 19/13 p1) said “satellite broadband has made significant improvements in service quality.” That report found ViaSat generally delivered far faster service than the 12 Mbps it advertised during peak hours. Those kinds of contradictory findings from the FCC trouble Spiwak. ISPs have long complained about impossible standards and a commission that refuses to embrace satellite and mobile broadband as a legitimate alternative (CD Sept 24/12 p14).

Section 706 defines “advanced telecommunications capability” as a “high-speed” telecom capability that lets users originate and receive high-quality voice, data, graphics and video telecom “using any technology.” Commissioner Ajit Pai noted that language in his dissent to the last broadband progress report, and Yoo said he shared that concern. If wireless had been included, the number of unserved people as of mid-2011 would have dropped from 19 million, or 6 percent, to 5.5 million, or just 1.7 percent, Yoo said. That “would have made it harder to justify the claim that broadband is not being deployed in a reasonable and timely manner,” he said. The number of people who lack access to broadband speeds has likely “dropped still further,” Yoo said.

Because the FCC “once manipulated the meaning of the statute, and the data, in order to conjure up a negative deployment determination,” Free State Foundation President Randolph May said he’s “not optimistic the agency will go back to looking at the data in the proper way.” That would be “the same way it did in all the earlier Section 706 reports before the switch intended to save net neutrality regulation,” said May.

'Reasonable Minds Can Differ'

The so-called independent authority of Section 706(a) isn’t cut and dry, some say. “I've looked and looked at 706,” said Matt Wood, Free Press senior policy director. “There’s still some uncertainty.” The FCC “clearly” has some 706 authority over broadband, but reading 706(a) to be an “independent grant of authority” might mean it’s an “independent substantive grant,” he said. Given the context of the opinion, when D.C. Circuit Judge David Tatel wrote that it was reasonable to read 706(a) as a grant of regulatory authority, that could mean the agency has some independent power but “it’s still tied to the 706(b) finding,” Wood said. “There’s a lot of room for debate.”

"Reasonable minds can differ” on “whether or not it’s actually an independent authority,” Spiwak said. Those differing minds might come from the 10th U.S. Circuit Court of Appeals, Spiwak said. One issue in the 10th Circuit challenge of the 2011 USF/intercarrier compensation order is whether Section 706 lets the agency require USF recipients to deploy broadband-capable networks. An FCC brief focused on Section 706(b), not (a), as its source of authority (http://bit.ly/WTSSqz). If the 10th Circuit disagrees with the D.C. Circuit’s reading of Section 706, there would be a circuit split and the question could go to the U.S. Supreme Court as the FCC tries to maintain its jurisdiction, Spiwak said.

Sections (a) and (b) both seem to authorize the same thing, said Berin Szoka, TechFreedom president. That should make one ask if Congress really intended Section 706 to be an independent grant of authority, he said. “Under Chevron, is the statute really ambiguous in this respect, and is the FCC’s interpretation reasonable? The FCC’s argument seems much stronger on 706(b) than on (a).” The Supreme Court ruled in 1984 in Chevron that courts should defer to an agency’s interpretation of a statute requiring the agency to act, unless the interpretations aren’t reasonable.

The Verizon court “did not make a searching de novo construction of the legislative history,” said Harold Feld, senior vice president at Public Knowledge. O'Rielly, who worked on Section 706 as a congressional staffer, has said the section was meant more as “congressional findings” and “has been abused and it should be returned to its original intent” (CD Jan 28 p2). Yet the Verizon court applied the lessons of the Supreme Court’s ruling last year in Arlington v. FCC, Feld said, deferring to what it found to be a reasonable FCC interpretation. “Courts certainly construing statutes de novo have found that statutes set up a general idea but then it only activates if some condition gets met,” Feld said, but “there’s no reason you have to read it that way.” The court simply gave deference to the FCC, he said, which read it that way.

Feld pointed to a parallel in the cable context: Section 628(b) is a general grant of authority to prevent anticompetitive practices by cable operators, and 628(c) says that at a minimum, the FCC must set up the program access rules. One section was a grant of general authority and the other was a direction that the agency go “above and beyond,” Feld said. It’s “not clearly wrong” to read 706(a) as an independent source of authority, he said.

The D.C. Circuit provided “some guidance” but left a lot “to the imagination,” said Medley Global analyst Jeffrey Silva. “Section 706 will mean what the FCC deems it mean in terms of future rules, enforcement and policy objectives generally.” The “big question” is whether revised net neutrality rules, and other rules based on Section 706, “will stand the test of time,” he said. “It’s quite possible the meaning of Section 706 could change over time due to litigation, legislation or even re-interpretation by the FCC itself. As such, Section 706 could be a moving target over the long haul.”