The Federal Communications Commission has proposed new ways it said will make sure broadcasters identify any content funded by a foreign government entity while ensuring it complies with a court decision that found the agency did not have the authority to mandate its previous effort at identifying such paid programming.

The FCC on Thursday (October 6) released a second notice of proposed rulemaking (NPRM) it said “strengthens the process for identifying foreign governmental entities in the wake of the [U.S. Court of Appeals for the D.C. Circuit’s] ruling in National Association of Broadcasters (NAB) v. FCC.” The proposal does not include a check of government databases, at least not by broadcasters. It is only a proposal, so the FCC will seek comments before voting on a final order.

The FCC’s second try was necessary because the D.C. Circuit in July found the regulator did not have the authority to require broadcasters to check two federal databases of foreign government entities to make sure the paid programmer is not on them. The NAB had challenged the requirement.

Concerned about China and Russia secretly leasing airtime to broadcast propaganda, the FCC had voted unanimously to toughen the disclosure requirement, including by mandating the check of government sources.

The court concluded the statute limited them to requiring broadcasters to exercise “reasonable diligence” in getting information from employees and sponsors, while the FCC extended that to government sources, something that broadcasters argued and the court agreed "is not in the law Congress wrote.”

Broadcasters must still make good-faith efforts to identify foreign-sponsored programming, just not according to that new, specific FCC mandate the commission has just modified to try and meet court muster.

In challenging the double-verification requirement, the NAB had said broadcasters’ duty to find out who pays for programming is confined to conducting due diligence to find out from those it deals with directly at the source. That is because a previous court had already ruled that statutory language imposes no burden of “independent investigation” by licensees.

One of the fixes the FCC is now floating is making those that lease the programming ensure they are not in those databases.

Another proposed FCC adjustment to the foreign programming ID requirement is to create a certification process with standard language that it says will demonstrate that broadcasters have done their due dilligence to determine whether a foreign governmental entity has sponsored a program.

“The principle that the public has a right to know the identity of those who use our airwaves to solicit our support is a long-standing tenet of broadcasting and I continue to stand by that,” FCC chair Jessica Rosenworcel said in a statement. “This proposal will help strengthen the process for identifying foreign governments broadcasting in the United States and fill in the gaps left in the wake of the D.C. Circuit’s recent ruling. The bottom line is that this is about supporting transparency and democratic values — full stop.”

The new FCC proposal fills in the gaps, it argues, by:

1. Proposing that a broadcaster must certify that it has informed its lessee of the foreign sponsorship identification rules and obtained, or sought to obtain, a certification from its lessee stating whether the lessee is or is not a “foreign governmental entity;”
2. Proposing that “a lessee must submit a certification in response to a broadcaster’s request;”
3. Proposing to incorporate standardized certification into FCC rules;
4. Offering an alternative certification requirement under which the lessee has the obligation to check the two federal government sources the FCC is disallowed by the court from requiring the broadcaster to check.

The FCC’s second NPRM also seeks input on a petition regarding how to distinguish between advertising and programming leased airtime arrangements and whether the FCC should consider any short-form programming under 2 minutes long to be advertising exempt from the foreign sponsorship-ID rules.

“We look forward to working with the FCC to clarify some of its rules to ensure that broadcasters are airing the correct identifications,” NAB senior communications strategist Alex Siciliano said. “As NAB has made clear from the beginning, we share the commission’s goal of ensuring that the public understands when it is watching or listening to foreign propaganda.” ▪️

President Joe Biden will tap Judge Ketanji Brown Jackson for the vacancy on the U.S. Supreme Court, according to multiple news reports. Brown sits on the U.S. Court of Appeals for the D.C. Circuit, which is the principal court for appeals for Federal Communications Commission decisions.

The D.C. Circuit has been the launching pad for a number of Supreme Court nominees, most recently Brett Kavanaugh, and prior to that President Barack Obama's failed attempt to seat Merrick Garland. Biden last year made Garland the attorney general, with Jackson replacing him on the D.C. Circuit.

Also coming from the D.C. Circuit were current Chief Justice John Roberts and the late Justices Ruth Bader Ginsburg and Antonin Scalia.

Jackson, who has been in the conversation for the open Supreme Court seat since before Biden promised to name the first Black woman to the court, is the former vice chair of the U.S. Sentencing Committee and most recently served on the U.S. District Court for the District of Columbia. She also clerked for the justice who stepped down to create the vacancy, Justice Stephen Breyer.

Jackson is a Harvard Law School graduate, where she was a supervising editor on the Harvard Law Review.

She is a member of the Judicial Conference Committee on Defender Services, the Harvard University Board of Overseers and the Council of the American Law Institute. She is also a board member of the D.C. Circuit Historical Society and the United States Supreme Court Fellows Commission. ■

The Federal Communications Commission is defending its decision to make broadcasters do some extra due diligence in identifying foreign leased programming, a decision that came amid concerns about foreign disinformation in U.S. media.

Calling it a “minimal extension” of its longstanding regulations regarding foreign programming sponsorship, the FCC told the U.S. Court of Appeals for the D.C. Circuit it should not block that rule “extension.” The National Association of Broadcasters and others asked the court to do so in the form of a motion to stay the rule.

The FCC said broadcasters‘ beef is with a single “straightforward administrative requirement” — that stations “perform a name search on two government websites in order to confirm that the party to whom a broadcaster leases airtime is not a foreign governmental entity.”

There is a high bar for a judicial stay, including imminent and irreparable harm absent such a stay and likelihood of the success of NAB's case. The FCC said it will likely take several months for the new rule to take effect, because the Office of Management and Budget must sign off on the information collection obligations. The FCC said NAB has not shown that the rule, when it does go into effect, will cause irreparable harm. It rejects the NAB‘s claim that “unrecoverable compliance costs” — if the rule goes into effect and the court later overturns the compliance requirement — are irreparable harm because the economic hit isn‘t that big.

The NAB also said a stay would cause irreparable harm because it would run afoul of the First Amendment. The FCC said the disclosure requirement burdens speech, but does not prevent it; said it is narrowly tailored, as any speech regulations must be; and noted that the Supreme Court has said broadcasters have the most limited speech protections of “all forms of communications.”

Also: Broadcasters Seek Stay of Disclosure Rule

As to the NAB‘s winning, the FCC said requiring a name search in two government databases was a reasonable interpretation of the statutory requirement that broadcasters exercise due diligence in determining the source of their foreign-supplied programming

Late last month, broadcasters petitioned the court to stay the FCC's implementation of its decision to boost disclosure requirements for foreign government-sponsored programming, at least until that court can hear their underlying case for reversing that requirement.

The FCC voted unanimously last April to boost disclosures for programming on airtime leased by a foreign entity. The move came amid heightened focus in D.C. on disinformation campaigns and despite pushback from broadcasters, who argue the FCC is adding regulations to an already overregulated service, including charging broadcasters with the responsibility to investigate for foreign ownership.

The NAB, the Multicultural Media, Telecom and Internet Council and the National Association of Black Owned Broadcasters petitioned the FCC to stay the decision, but it declined to do so.

The commission suggests broadcasters essentially have no cause for their action.

FCC: Rule Was Made ‘Reasonably’

“The FCC reasonably determined that the challenged rule is necessary to ensure appropriate disclosure of broadcast sponsorship by foreign governmental entities. As we have shown, it does not violate the First Amendment rights of NAB’s members, and is only a modest extension of the existing broadcast sponsorship identification regulations, which NAB does not challenge,” the agency said. ”There is, in short, no basis for suspending the targeted, straightforward steps the FCC has taken to ‘increase transparency and ensure that audiences of broadcast stations are aware when a foreign government, or its representatives, are seeking to persuade the American public.’ ”

Broadcasters argued the FCC doesn’t have the authority to impose the obligation to investigate “every existing or new leased programming agreement” on broadcasters to ensure they do not run afoul of FCC rules.

Suggesting the FCC was signaling broadcasters for special mistreatment, they said the FCC order didn't say anything about undisclosed foreign government programming on cable systems or over-the-top video, where, they argue, the real problem is.

The FCC pointed out that the D.C. Circuit has already concluded in another case that a rule “is not fatally underinclusive simply because an alternative regulation, which would restrict more speech or the speech of more people, could be more effective.” Besides, it said, the agency is only empowered by the Communications Act to impose sponsorship ID requirements on broadcast stations.

The Federal Communications Commission got some tough questioning from judges on the U.S. Court of Appeals for the D.C. Circuit in defending its decision to amend its over-the-air receive device (OTARD) rule to remove a commercial use restriction.

That came in oral argument Tuesday (Dec. 7).

The FCC argues that the restriction, which prevented commercial antennas that could transmit and relay, as well as receive, was outdated and impeded the buildout of 5G wireless service.

In fact the commission was unanimous in its 2019 decision to expand the definition of user in the OTARD rule, which “prohibits laws, regulations, or restrictions imposed by State or local governments or private entities that impair the ability of antenna users to install, maintain, or use over-the-air reception devices” from customer to provider.

The FCC billed the change as another of its efforts to make it easier to deploy broadband infrastructure, particularly to rural and unserved/underserved areas, and to help agency rules keep pace with changing technology. Just as cellular sites have gotten smaller and more numerous, so do commercial hubs need to be more numerous and placed closer to customers, goes the argument.

But activist group Children’s Health Defense had sued the FCC, arguing that easing the restriction on commercial operations of antennas to allow them to be erected in communities, and without prior notice in the case of unlicensed uses, was potentially life-threatening to children and others with radio frequency exposure-related conditions. “The Communications Act does not grant the commission the power to issue a license to kill,” an attorney for the group told the court in oral argument.

The group argued that the change allows for more and more powerful antennas that pose a new health risk that communities cannot prevent through restrictive covenants. “All of that protection goes away,” it told the court.

The FCC argues that the same RF limits remain in place, as do other restrictions beyond the commercial use restriction that was removed.

The judges pressed the FCC attorney on the fact that the antennas could now proliferate without homeowners knowing they were going up, since there was no requirement for community notification.

The agency’s attorney conceded the change would mean lots more antennas because the old rule meant that antennas could not be primarily used as a hub, and now they could be.

One of the reasons for the change was that as technology has evolved, he said, antennas have become multipurpose devices much in the same way that a computer is now used for word processing, gaming or to watch video. He said the antennas can be used to receive, transmit and relay, so the old restriction was obsolete and “didn’t make sense.”

He pointed out that the amendment retained size restrictions on the antenna — no more than 12 feet above the roofline — and power restrictions. The hub antennas must also be used by customer to receive service, as well as a commercial relay.

FCC Chairman Ajit Pai was celebrating Thursday (Oct. 1) after the U.S. Court of Appeals for the D.C. Circuit denied emergency stays sought by AT&T and others of the FCC's decision to open the 6 GHZ band for unlicensed Wi-Fi, something cable broadband operators have been pushing for.

AT&T, Verizon and other telecoms, as well utility companies, use the spectrum for backhaul and while the telecoms are all for expanding Wi-Fi, suggested opening up the entire band without what they argued were sufficient protections for incumbents, was the wrong way to do it.

The court will still hear the underlying challenge of telecoms, public safety officials, and utilities to the FCC order, but won't stay the decision in the interim.

Pai tweeted that the court's decision was "great news for consumers," whom he said would benefit from the "super-fast" Wi-Fi.

The court is giving the parties 30 days to submit a joint proposal for filing briefs in the case.

In August, the FCC denied petitions by public safety officials and utilities to stay its decision to open up the entire band. Cable ops and computer companies are squarely behind the FCC.

The FCC voted unanimously April 23 to allow the entire 1,200 MHz of the 6 GHz band to be shared with unlicensed Wi-Fi, the FCC's latest move in freeing up more spectrum for connecting 5G in-home devices--video streaming, video calls--and connecting IoT devices to the internet.

"In the midst of the national COVID-19 crisis when many Americans are relying on low-cost Wi-Fi for bandwidth intensive work, school, medicine and other accommodations, the FCC's 6 GHz rules are critical to meet the growing demand for Wi‑Fi connectivity while at the same time protecting public safety and utility operations," said the Wi-Fi Alliance. "[We] will continue to support the FCC in its effort to defend the public benefits generated by affordable unlicensed connectivity that technologies like Wi-Fi will deliver in the 6 GHz band."

“The court’s ruling is great news for the tens of millions of workers and students who may be learning and working from home well into next year," said Michael Calabrese, director of the Wireless Future Program of the Open Technology Institute. "For those with fixed broadband connections, the capacity of Wi-Fi is becoming the biggest constraint on high-capacity connectivity. If the FCC adopts the somewhat higher power level it is considering for indoor-only use, consumers and the economy will benefit from affordable and gigabit-fast Wi-Fi early next year.”

Federal Communications Commission chairman Ajit Pai was doing something of a victory dance after a federal court said his internet deregulation generally cleared the legal bar for reasonable agency decision-making, leaving his deregulatory approach to the ’net mostly in place.

According to top FCC officials (paraphrased from a background call with The Wire and others), these were the seven key victories for the FCC in the decision by the U.S. Court of Appeals for the D.C. Circuit released on Oct. 1.

1.) The court upheld the Restoring Internet Freedom order’s reclassification of broadband internet access as a reasonable exercise of the FCC’s discretion, pointing to the Supreme Court precedent in the 2005 Brand X decision.

2.) The court said the FCC was within its discretion to rule that the DNS (domain name system) and caching functions of broadband access did not make it a telecommunications service versus an information service.

3.) The court upheld the FCC’s definition of mobile broadband as a private (Title I) service rather than a commercial service.

4.) The court said the FCC was reasonable to conclude that section 706 of the Communications Act (the FCC mandate to ensure advanced communications is being deployed in a reasonable and timely manner) was not an independent grant of regulatory authority. The previous FCC had said it was.

5.) The court upheld the FCC’s advanced transparency rule, which ensures that the blocking, throttling and paid prioritization allowed under the order are disclosed to customers. That is how the FCC, Justice Department and Federal Trade Commission can together monitor ISP conduct for anticompetitive actions.

6.) The court held the FCC’s decision to eliminate the rules was reasonable because the harms the rules had been designed to prevent could be addressed with that transparency and antitrust oversight.

7.) The court said the FCC’s contention that reclassifying broadband access would boost broadband investment — agency critics had branded that as bogus — was based on “substantial evidence.”

WASHINGTON — Call it legal ping-pong, regulatory pinball or judicial rinse and repeat — it was called all of those and more — but a new decision out of a federal court here on the FCC’s latest set of net neutrality rules has ISPs and virtually everyone else calling for Congress to finally step in and clarify just what authority the agency has and should use over internet access.

Good luck with that.

Such was the fallout over the court’s decision to uphold the Federal Communications Commission’s reclassification of internet access service as a Title I information service, rather than a Title II telecommunications service subject to common carrier, mandatory access regulations. In the process, the three-judge panel from the U.S. Court of Appeals for the D.C. Circuit left alone the FCC’s decision to eliminate rules against blocking, throttling and paid prioritization and deeded most internet oversight to the Federal Trade Commission and the Justice Department.

This latest legal volley only muddied the waters further when it came to whether or not states can step in — as California, most notably, has done — to regulate in the absence of the FCC rules. California actually went beyond the 2015 Open Internet rules the current FCC deregulated, though its law has yet to go into effect after the DOJ sued and the sides took a breather to wait for this appeal decision, released on Oct. 1.

Pre-emptive Moves Curbed

While the FCC, under current chairman Ajit Pai, had pre-empted any state efforts to reregulate in the 2017 Restoring Internet Freedom deregulatory order, the D.C. Circuit said the commission had exceeded its authority, and could only pre-empt state efforts on a case-by-case basis under the “conflict pre-emption” provision that covers regulations that conflict with federal laws.

There was some disagreement over whether or not the court’s decision to wipe out that blanket pre-emption opened the door to a potential 50 state internet regulatory regimes. FCC officials speaking on background didn’t see it that way, but activists on foreground said they did and would be pushing states to pass their own tough new laws.

Mozilla vice president of public policy, trust and security Alan Davidson, the lead name on the rule challenge, said the decision provided a path forward to state-level action to do what the FCC did not, citing California and Vermont as taking the lead with already passed laws.

ISPs were celebrating while activists were considering next steps and vowing to push for the Save the Internet Act, a bill that passed the House and would reinstate Title II and related rules.

ISPs were calling for legislation, too, but they will not be signing on to any proposal that tries to codify Title II — particularly when fresh from a court victory where it was decided the FCC had reasonably reclassified to Title I.

Activists were taking some comfort in the fact that the D.C. appeals judges based their decision in part on Brand X, the Supreme Court’s 2005 precedent that internet access could be reasonably classified under Title I. The court also extended the so-called Chevron deference given to expert agencies, which is that courts put at least a pinky — some would say a thumb — on the judicial scale for agency decisions, under the theory that agencies generally know more about the impacts of communications policy decisions than judges. Net-neutrality activists said the judges recognized that, although a lot had changed since the 2005 Brand X decision, their hands were tied, or at least they felt they were, by that precedent.

So what will actually happen next?

The FCC has to come back to the court with a better justification for its assertion that its deregulatory moves would not adversely affect public safety, pole-attachment regulations and Lifeline broadband subsidies. FCC officials who spoke on background said they had no concerns about providing those explanations.

Activists and Democrats will push for:

• Title II legislation. ”The fight is on,” said Sen. Edward Markey (D-Mass.), a network neutrality fan, though arguably it has never been off.
• State-by-state action. New York Attorney General Letitia James signaled her state may be one of those to act. “We stand committed to protecting our residents by treating all internet traffic equally, defending access, innovation and competition,” she said in an e-mailed statement to Multichannel News.

ISPs will back compromise legislation, but from a stronger position than when the case had yet to be decided. FCC officials speaking on background said chairman Pai also continues to believe that the ideal scenario is for Congress to step in and resolve the issue once and for all, even if that ultimately means restoring some of the rules the FCC eliminated.

“We stand committed to protecting our residents by treating all Internet traffic equally, defending access, innovation and competition.” — Letitia James, New York state attorney general

A Congress bickering over impeachment and divided over Title II is not likely to find common ground any time soon amidst all the scorched earth.

If net neutrality fans want to continue the pingpong/pinball/rinse and repeat route, they have several options, said attorney Andy Schwartzman, who argued for restoring the rules:

• They can seek full court review of the three-judge decision, which he thinks is unlikely to be granted.
• They can appeal directly to the Supreme Court, though Schwartzman said that would not be a favorable venue given the makeup of the court. For example, newest Justice Brett Kavanaugh is a veteran of the D.C. Circuit and no fan of the old net neutrality rules. That would risk an even worse precedent from that highest court.
• They can “take their medicine” and try for a Congressional fix, though that is likely a long-term play given the political divide over the issue of Title II and the general political divide.

The FCC could also challenge the pre-emption portion of the decision. One of the three judges dissented strongly from pre-emption, “setting up an important defense for the FCC should it challenge this part of the decision,” said Roslyn Layton, visiting scholar with the American Enterprise Institute. An FCC official speaking on background would not rule out such a challenge, but agreed the dissent provided strong ammunition for such an appeal.

And, of course, if a Democrat wins the White House in 2020, a new chairman could try and justify yet another 180-degree turn on Title II.

In the meantime, Michael Powell, president and CEO of NCTA-The Internet & Television Association and the former FCC chairman who first offered up Open Internet principles, said: “As a practical matter, the decision will have little impact on consumers’ internet experience. It does nothing to change our industry’s enduring commitment to providing consumers with the same open internet experience that has been delivered for decades.”

With the three-judge U.S. Appeals Court panel now set for Feb. 1 oral arguments in the latest installment of “How the Net Neutrality Rules Turn” [the Mozilla et al. challenge to the FCC’s rollback of net neutrality rules], The Wire polled a veteran attorney sympathetic with the challengers for a take on the panel and its impact on a potential decision.

The caveat is that a jurist’s past performance is no guarantee of future returns. That said, the attorney, who asked not to be identified, suggested the panel — Judges Judith Rogers, Patricia Millett and Stephen Williams of the D.C. Circuit — was a “fairly good” group for fans of reversing the Restoring Internet Freedom (RIF) order deregulating internet service providers.

Williams was on the panel that declined reversing the 2015 Open Internet Order’s bright-line rules against blocking, throttling and paid prioritization — the rules the RIF order rolled back. That panel did not weigh in on whether that was the right approach to regulating the ‘net, only that the FCC was not arbitrary and capricious in concluding it was. But Williams did dissent from applying the Title II-based rules to mobile broadband.

That means Williams could well support RIF’s return of mobile broadband to Title I. “It is more difficult to guess how he will approach the FCC’s revised legal and factual analyses, but his track record suggests he might be sympathetic to the FCC’s revised rationale; the issue there is that it is OK for the agency to change its mind as long as it has a good explanation,” the attorney said.

That means Williams could back the 2015 rules because the FCC had a reasonable rationale, but also the 2018 rollback if he concluded the agency made a reasonable case for changing course. The point is that the court does not have to rule on whether the rollback was necessarily the best policy choice, only that it was defensible and not arbitrary or capricious.

“Judge Millet is likely to be receptive to the petitioners’ arguments,” the attorney said, “but she is very rigorous and must be convinced before she would vote to reverse.”

That leaves Rogers, who was on the 2014 panel that unanimously rejected the FCC’s imposition of common carrier-like net neutrality rules because the FCC had tried to do it under Title I. But that 2014 decision also gave the agency a chance to try again.

It sounds like Rogers could be a swing vote for reversal, but The Wire’s attorney adviser said Millet might be more likely to reverse than Rogers.

A federal court has upheld the FCC's determination that Dish had de facto control over AWS-3 winning bidders SNR and Northstar.

The FCC denied designated entity (DE) bidding credits to the companies--some $3.3 billion worth--which would have lowered the bid to $10 billion, after which the companies said it could not pay for all of the licenses, paying full price for some and turning back others, which the FCC allowed them to do.

The AWS-3 auction raised over $40 billion and paid for the FirstNet broadband emergency network in the process.

"Under the totality of the circumstances, we believe that the FCC acted reasonably and consistently with   its Wireless Bureau’s decisions when it held that DISH had de facto control over SNR and Northstar," wrote Judge Cornelia Pillard in the decision, which was rendered by a three-judge panel comprising Judges Pillard and Janice Rogers Brown and senior Circuit Judge Stephen F. Williams.

But the U.S. Court of Appeals for the District of Columbia panel also found that the FCC did not give those companies sufficient notice that, if their relationship cost them the credits, the FCC would not give them a change to cure that de facto control.

"Because the FCC did not give clear notice that such an opportunity would be denied, we conclude that an opportunity for petitioner to renegotiate their agreements with DISH provides the appropriate remedy here," the court said.

The court remanded the matter back to the FCC saying it needed to give those companies a chance to negotiate a "cure" of that control, which presumably could mean reinstating the credits.

Dish is ready to pitch in. ""We are pleased this has been referred back to the FCC," the company said in a statement. "We look forward, along with NorthStar and SNR, to working with the FCC to address any concerns they may have.”

The FCC had argued against providing a cure, saying it would disincentivize compliance since companies could just seek the credit and haggle post-auction. The court disagreed, saying "nothing in our decision requires the FCC to permit a cure. That choice lies with the FCC. But if the very opportunity to seek one is to be foreclosed, applicants must have clear, advance notice to that effect."

“Today’s D.C. Circuit decision explains in painstaking detail why the Commission reasonably determined that DISH abused a program designed to help small businesses," said Tina Pelkey, press secretary to FCC Chairman Ajit Pai. "This is an important victory for American taxpayers. In the AWS-3 auction, the two entities claiming over $3 billion in taxpayer-funded discounts were not independent small businesses, but rather under the control of DISH. Going forward, we need to make sure that this program is available only to legitimate small businesses that actually control their own destinies.” 

Dish had put up most of the money for the two to bid $10 billion on wireless spectrum licenses in the AWS-3 wireless spectrum auction. The licenses were actually worth $13.3 billion, but SNR and Northstar sought designated entity bidding credits as diverse owners. The FCC denied that credit--after they had already bid--due to Dish's investment and plans to run the network. 

The court signaled that if the companies extricate themselves sufficiently from Dish to the FCC's satisfaction, they could qualify for the $3.3 billion break and reclaim those licenses. If not, the FCC will have to re-auction that $3.3 billion worth of spectrum.

Harold Feld of Public Knowledge, which filed an amicus brief in support of essentially what the court concluded--that the FCC had the authority to deny the credits, but should have given Dish and the companies the chance to cure the problem--was, not surprisingly, pleased with the decision.

"I'm pleased the court agreed with our analysis," Feld told Multichannel News/B&C. "As we noted in our amicus, the DE credit put licenses in the hands of competitors, and into constituted the single largest win of FCC licenses by minority-owned businesses (both SNR and Northstar are minority owned as defined by the Commission).

"Second, we hope that the FCC will move expeditiously to negotiate with DISH to provide adequate independence for the DEs and put the spectrum into productive use -- especially on behalf of a potential new entrant into terrestrial wireless. Whatever personal feelings then-Commissioner Pai and others may have expressed about DISH's conduct previously, the court has made it clear that DISH is entitled to the opportunity to cure the defects the FCC found in its DE agreements. To the extent people feel DISH unfairly exploited a loophole, the FCC has long since closed the loophole. It's time to put this matter to rest and get the spectrum out as quickly as possible."

I have to confess that, at the time the U.S. Court of Appeals for the D.C. Circuit upheld the Federal Communications Commission’s 2015 Title II order, I did not focus on the court’s analysis of the First Amendment claims raised by other parties. Only after reading the concurrence in the recent court decision declining to rehear the appeal, did I understand the panel majority’s view of the scope of the Title II order.

In short, the court’s rejection of the First Amendment claims was based largely on a very narrow reading of the FCC’s order — a reading that would suggest that, for all its baggage, Title II is not even an effective tool for doing what it was supposed to do — prevent blocking or slowing of certain Internet traffic by ISPs that are purportedly undisciplined by market forces.

Related: D.C. Court Denies Open Internet Decision Re-hearing

According to the concurrence, which was written by Judges Sri Srinivasan and David S. Tatel (the same judges who wrote the underlying decision), “the net-neutrality rule applies only to ‘those broadband providers who hold themselves out as neutral, indiscriminate conduits’ to any content of a subscriber’s own choosing (quoting the underlying decision).”

The concurrence goes on to say, “The rule does not apply to an ISP holding itself out as providing something other than a neutral, indiscriminate pathway — i.e., an ISP making sufficiently clear that it provides a filtered service involving the ISP’s exercise of editorial discretion.”

I was surprised by this, though I should not have been since the FCC’s own lawyer implicitly conceded this point during oral argument. And even supporters of Title II now appear to agree that the scope of Title II is limited to ISPs not offering a “curated experience.” However, in the past, supporters of Title II often alleged that without reclassification, ISPs would be free to block unpopular opinions or viewpoints that they disagreed with. In the understanding of the D.C. Circuit panel majority, it seems that the Title II order does not touch such practices as long as an ISP clearly discloses its blocking plans to customers.

Now, this point may be almost entirely academic since most ISPs have never indicated much interest in content-based blocking. But it is nonetheless interesting that the Title II order, as understood by Srinivasan and Tatel, does not prohibit such practices. Before reading the concurrence, I assumed that the FCC’s rules would actually prevent ISPs from engaging in “editorial discretion.”

It is also noteworthy that Judges Srinivasan and Tatel did not limit this rather significant limitation on the impact of the order to blocking of Internet traffic. Rather, they explain that it “would also be true of an ISP that engages in other forms of editorial intervention, such as throttling of certain applications chosen by the ISP, or filtering of content into fast (and slow) lanes based on the ISP’s commercial interests.”

Wow. ISPs are not only free to engage in content-based blocking, they can even create the long-dreaded fast and slow lanes so long as they make their intentions sufficiently clear to customers.

Once again, perhaps this is purely academic, since ISPs have not indicated any real interest in pursuing fast and slow lanes. But I was surprised to learn that the Title II order may prohibit such practices only to the extent that ISPs voluntarily hold themselves out as neutral conduits, and do not clearly disclose plans to filter content and applications based on their commercial interests. In other words, at the end of the day, it appears that only market forces, and not FCC rules, prevent ISPs from doing virtually everything that proponents of the Title II order feared. Which is ironic, to say the least.

Indeed, it appears that a variety of practices, which have at various times been alleged to violate net neutrality, may in fact fall outside the scope of Title II “rightly understood.” See, for example, MetroPCS’s plan to offer a low-cost tier blocking most video streaming (except for YouTube), as well as the original version of T-Mobile’s Binge On, not to mention the “net neutrality worst case” scenario. Apparently, all of those plans, either in reality or at least in theory, would fall outside the Title II order if accompanied by adequate disclosures.

But the real question here is: Are Judges Srinivasan and Tatel correct? I don’t think this is a purely academic question. If they are not correct, then the court did not ever really reach the First Amendment claims made on appeal, which has implications for whatever the FCC might try to do in its latest net-neutrality proceeding. Alternatively, if they are correct, then the Title II order is the equivalent of a seriously underdressed emperor.

Hank Hultquist is senior vice president of federal regulatory at AT&T. 

WASHINGTON — The Federal Communications Commission won a big victory in a federal appeals court with a ruling that the agency had sufficiently justified its Title II-based approach to network-neutrality rules. But the last chapter has yet to be written in the years-long legal battle.

Internet-service providers have vowed to continue the fight, either by appealing the three-judge panel decision to the full U.S. Court of Appeals for the D.C. Circuit, or by going straight to the U.S. Supreme Court.

Some interested parties huddled with reporters after the decision to talk about the implications of the court’s call and prospects on appeal.

POTENTIAL LINES OF APPEAL

Network-neutrality detractors seemed to agree that the FCC’s decision to reclassify wireless under Title II of the Communications Act might be fruitful ground for appeal, given the distinctions the FCC had previously drawn between wired and wireless, though they were not handicapping prospects for success.

Another possibility at the Supreme Court, said Russ Hanser, partner at Wilkinson Barker Knauer, was what might be a nascent doctrine at the Supreme Court regarding reviews of particularly important agency decisions, in which agencies have “reshaped” the statutory authority bestowed by Congress.

Attorney Andrew Schwartzman, who supports the Title II-based rules, wasn’t buying that argument. He called “fanciful” the suggestion the Supreme Court wants to cut back on traditional deference by suggesting some cases are “too big” for Congress to have meant to delegate its authority.

“The Supreme Court has already said [in the Brand X case upholding the FCC’s previous definition of Internet access as an information service] that the reclassification issue was properly delegated to the FCC,” Schwartzman said. “I doubt that there is any other statute in the last few decades which so clearly delegated so much to the FCC for decision.”

Hanser cited a case involving the Affordable Care Act (aka Obamacare), in which the Supreme Court said in cases of such national importance, the court’s traditional deference to agency decisions might be more limited. That calls into question how much discretion agencies have, he said.

When Congress gave FCC forbearance authority, Hanser added, most people saw that as a deregulatory move. “There seems to be something strange to use it to vastly expand regulation, just not as far as it otherwise would have been expanded,” he said.

He would not be surprised if appeals of the rules to the Supreme Court focused on how much authority agencies have to create regimes different from the ones anticipated in the statute, he said.

Seth Cooper of free-market think tank Free State Foundation thinks the FCC’s general-conduct standard is another weak spot in the court decision.

“The D.C. Circuit’s light-touch review of a heavy-handed regulatory order offered an unsatisfying analysis of the general conduct standard, too eagerly downplaying its vagueness,” Cooper said in a blog post.

Cooper said the vagueness issue should be brought up on appeal, but an as-applied challenge could also be the legal vehicle to challenge the network-neutrality rules. If the FCC was to make a ruling based on the general-conduct standard — by disallowing zero-rating plans, for instance — an as-applied challenge to that decision could be a way to get a fuller vetting than the D.C. Circuit provided.

LOW ODDS ON REVERSAL

Schwartzman was not shy about offering up odds on an appeal, saying the chances for reversal are “close to zero.”

Given that the dissenter in the case — Judge Stephen F. Williams would have remanded the decision back to the FCC — was focused not on the agency’s power to reclassify (which the court upheld), but on how the FCC applied the law, the “core legal issue” is not in play, Schwartzman pointed out.

The only reason to seek rehearing is a tactical one to put off going to the Supreme Court until there is a ninth justice in place, Schwartzman said.

As to the Supreme Court, Schwartzman said there is no split in the circuit for it to resolve, and “it has already said that the central provision is ambiguous, and even Judge Williams agreed that the FCC has the power to reclassify. The only other issues in the case are garden variety administrative law statutory questions of no interest to the Supreme Court plus a nearly frivolous First Amendment question.”

A three-judge panel of a D.C. federal appeals court heard Tennis Channel's challenge to the FCC's inaction on a previous panel's decision overturning the commission's finding that Comcast had discriminated against it.

In essence, the FCC was defending a decision that went against it, or at least the FCC's decision to accept the court's smackdown and move one.

The judges hearing the Tennis appeal in the U.S. Court of Appeals for the D.C. Circuit were Judith Rogers, Cornelia Pillard and Janice Rogers Brown, with Rogers and Pillard doing all the talking, and probing, of arguments on both sides.

Tennis channel attorney Stephen Weisswasser, of Covington & Burling, argued that the previous court essentially created a new discrimination test, which was not only a showing that Comcast's owned content was benefiting from the weak carriage of a competitor, but that it was foregoing benefit on the distribution side by not carrying the channel more widely. He said that was at test Tennis was arbitrarily denied a chance by the FCC to meet because the commission did not reopen the case and seek comment based on that new test from the court.

Weisswasser said that Tennis could have made that showing if it had known that was on the table, but the FCC's attorney said it was not a new test and that Tennis should have known to provide that evidence of economic discrimination via a cost-benefit analysis at the time given Comcast had produced its own cost-benefit analysis.

To buttress its case for why the court had created a new standard, Weisswasser cited the Game Show Network carriage complaint against Cablevision, which was re-opened by an FCC administrative law judge after the Comcast decision, saying the judge had thought the Tennis Channel decision had created a new test.

In the FCC's initial decision in Tennis Channel, it concluded Comcast had discriminated against Tennis in favor of its own content, but Comcast appealed and a previous, different, panel of the court concluded instead that Comcast had demonstrated a clear business reaso --that interest in the channel did not justify the price in sub fees--for doing what it did, a reason which was not sufficiently refuted by Tennis channel.

FCC attorney Scott Noveck argued Monday that the court had found that Tennis did not provide evidence to refute Comcast's cost-benefit analysis, which the court ultimately looked at in siding with Comcast. THe FCC said it did not re-open the case following the court decision because it did not agree with Tennis that the court had set a new standard, and that essentially it was not the FCC's fault if the channel had evidence it did not present the first time around. The lawyer also pointed out that case had been going on for six years, and given the congressional mandate to deal with carriage complaints expeditiously, in its discretion decided to accept the court decision and move on.

Tennis channel lawyer Stephen Weisswasser of Covington & Burling said it was not Tennis channel's fault it had taken six years, or got the "back" of the FCC's discretionary hand.

Comcast's lawyer spoke briefly as ain intervenor for the FCC, saying the court created no new test, and just concluded that based on the facts, Tennis had failed to refute Comcast's business case argument for the level of carriage.

Given that Tennis did not meet that evidentiary burden, he suggested, the channel should not get the legal windfall of a do-over.

Weisswasser said they were not looking for a do-over, but for a hearing under the new standard the court had created, citing changed circumstances.

Tennis also suggested the earlier panel had meant for the FCC to take further action. The FCC disagreed, pointing out that if the court had wanted to remand it back for further FCC action, it would have explicitly said so.

An FCC administrative law judge issued a decision against Comcast in December 2011, and the FCC, under then chairman Julius Genachowski, upheld it. A D.C. Federal Court overturned that decision in May 2013, saying there was no evidence that affiliation played a role in the level of carriage Comcast had provided the channel.

After the Supreme Court refused to hear an appeal of the federal appeals court decision, Tennis Channel in March 2014 petitioned the commission to issue a new order resolving what it said were new carriage-complaint tests created by the court.

In a January 2015  five-page decision, the FCC officially reversed the decision against Comcast per the court's findings and rejected the Tennis petition for further proceedings.