FCC Loss in USF Case Would Have Meant Limitless Legal Challenges: Panelist
The FCC avoided a potentially disastrous result when the U.S. Supreme Court upheld the USF contribution factor in its Consumers’ Research decision last month (see 2507020049), HWG’s Chris Wright said during a practitioners panel that was part of an FCBA CLE Tuesday (see 2507150081). “If the case had gone the other way” it would have “called into question almost everything in the Communications Act,” said Wright, a former FCC general counsel.
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Had the FCC lost, the commission would've had to quadruple the number of litigators it employs to handle the resulting legal challenges, Wright said. He noted that the FCC assigned various oversight functions to the Universal Service Administrative Co. after passage of the Telecom Act in 1996. The National Exchange Carrier Association had been administering the USF prior to the act, he noted. “The FCC just assumed that Congress wanted this new system to work the way the old system did and didn’t really have the personnel to replace NECA,” he said. The role played by USAC was a top focus of the challenge.
Wilkinson Barker’s Jennifer Tatel said Consumers’ Research's challenge of the USF contribution factor always seemed to be more about the constitutionality of the nondelegation doctrine and the intelligible principle test than just the USF. “It also seemed to us … that there are better statutes to mount that kind of challenge,” she said.
You could see an argument that the public interest standard or just and reasonable standard widely relied on by the FCC lack “an intelligible principle,” Tatel said. Section 254 of the Communications Act “was never the best statute for this challenge,” she said. SCOTUS’ decision in the USF case was probably “a step back” for Consumers’ Research in its goal of challenging the nondelegation doctrine more generally, she said. “I think USAC is safe for now.”
Wright said despite the 6th U.S. Circuit Court of Appeals’ decision overturning the FCC’s latest net neutrality order (see 2501020047), the issue won’t go away. “There could have been a very strong dissenting opinion,” he said. “The 6th Circuit relied very heavily on its misunderstanding of the regulation." The circuit focused on the word “capability,” he said. “DSL provides a capability to do the sorts of things that would make something an information service,” rather than a telecom service, “under the 6th Circuit’s interpretation of the world,” Wright said. “I don’t think that aspect of the decision is correct.”
The 6th Circuit also didn’t deal with former Justice Antonin Scalia’s dissent in Brand X, a 2005 case where “no justice said that broadband service is plainly an information service -- they said that was a plausible definition,” Wright said. Scalia found that the FCC’s decisions created an untenable situation in the ISP marketplace, with different companies subject to different levels of regulation, but placed the blame on Congress for its poor construction of the 1996 Act.
The public interest groups that supported the FCC’s latest order, reversed under Chairman Brendan Carr, filed at SCOTUS seeking an extension of the deadline for seeking cert, Wright noted. The new deadline for filing is Aug. 8. Whether they will file a challenge is unclear, he said. “There’s a very good chance” they will seek review and SCOTUS could potentially decide the case by next June. “We’d have that case to talk about in next year’s CLE." Because there’s no conflict among the judicial circuits, it’s probably most likely SCOTUS would deny cert, he said.