Another Challenge to FCC Authority

There is a new legal challenge that could alter the way that the FCC and other federal agencies regulate industries. The issue was highlighted in an article by John Eggerton in Multichannel News.

The Supreme Court has agreed to hear the case of Relentless Inc. et al v. Department of Commerce, et al. The specifics of the case are about the ability of the National Oceanic and Atmospheric Administration (NOAA) to regulate fishing. Specifically, fishermen have to pay for the cost of having NOA monitor their herring catches. There is a lot of speculation that the Court is open to weakening the ability of regulatory agencies to make new regulations.

This may sound like is not relevant to the FCC, but the case could impact all federal agencies that enact regulations that have not been specified by Congress. Agencies feel empowered to make regulatory rulings based on the Chevron doctrine. This doctrine comes from a strong ruling by the Supreme Court in 1984 in the case of Chevron U.S.A., Inc. v. Natural Resources Council, Inc. The lawsuit involved a challenge from Chevron that challenged the ability of the government to create and enact environmental rules that were not specifically ordered by Congress. Chevron also comes into play whenever there are conflicting laws from Congress – agencies get to interpret any conflicts.

Chevron is considered a landmark case where the Supreme Court gave substantial deference to the ability of government agencies to enact regulations. The Supreme Court ruling looked specifically at cases where agencies enact regulations that were not specified by Congress. The Court, in Chevron, looked instead at the intent of Congress when it gave agencies the power to enact regulations. A simplified explanation of Chevron is that the Court ruled that regulators are allowed to regulate as long as agencies stay within the overall framework of responsibilities given to them by Congress when the agency was created.

The Chevron doctrine has already been used by the Supreme Court related to the FCC in the 2005 case of NCTA v. Brand X Internet Services. The Court relied on the Chevron doctrine in ruling that the FCC had the authority to classify broadband as an information service that is not subject to common carrier regulation. This same ruling was used as subsequent FCCs reimposed Title II regulation and then reverse that decision a second time.

The issue is certainly going to arise again if FCC Chairwoman Jessica Rosenworcel goes through with her recently announced intention to reclassify broadband as a telecommunications service. The reason that Chevron was needed in the 2004 Brand X case is that Congress has been moot on the topic of regulating broadband. The last major related ruling from Congress was the Telecommunications Act of 1996, which preceded the explosion of the Internet. While there have been attempted bills introduced in Congress over the years to formally regulate broadband, Congress has apparently never had the necessary votes to enact broadband regulation.

Overturning Chevron would result in regulatory chaos since every regulatory agency makes rules that are not specifically spelled out by Congress. This would mean lawsuits challenging both new rulings by regulatory agencies but also older decisions. This also will likely results in the confusion that will come when courts issue conflicting opinions on the same topic.

Ending Chevron would mean that regulatory agencies will lose more court fights concerning new regulations, making it harder to create or modify regulations. Chaos will also abound since challenges to new regulations will result in a long delay as regulations are argued in court. This could mean a lot more delays, and for a longer time, for any new regulations not specifically required by Congress. Of course, Congress could avoid all of this by enacting explicit laws for regulations it cares about – but I don’t think anybody expects that.

4 thoughts on “Another Challenge to FCC Authority

  1. The end game for the new judiciary is dismantlement of the “administrative state” and a “return” to laissez-faire economics.

    The trick here is that the US was, thanks to Hamilton and Washington, founded as a protectionist economy, so not a free trade tradition. The years of lower regulation were years of endless booms and crashes and profound corruption (have a read about the development of the railroad industry, Rockefeller’s monopolies, electric power companies, etc. … all of which raised holy hell about the evils of regulation…)

    We enjoyed our broadest, deepest prosperity in the post-FDR years where the “liberal consensus” was an agreement from both parties to use government to regulate and promote industry towards greater fairness and safety, break up monopolies, and to promote long term agendas (infrastructure, r&d, etc.)

    Buuuuut, all of that meant lower profits for individual businesses, so the post-Reagan years have been all about various political factions trying to kill off regulations in particular and the administrative state in general. The drive was strengthened by a general slowing of economic growth in the 70s, which heightened pressure on finding new ways to increase profits (by decreasing expenses).

    They sold the country a bill of goods about the role of taxes. They’ve succeeded in redefining “monopoly” as something that’s largely not acted against.

    Disinformation and PR have been in full flower — the so-called three legs of the stool of American society have been expanded to include “free enterprise” and endless Chamber of Commerce, NAM, etc. PR campaigns have raised generations who see things a certain way. They’ve convinced lots of people that, somehow, problems just take care of themselves through economic means (even if externalities are completely ignored).

    And, now we’re seemingly at end game where target cases are being lined up for the new Supreme Court to prevent the federal government from imposing some global optimum on individual states. We’re set to return to the chaos of the 1860s with just a few key decisions.

  2. In paragraph 6 you have “Congress has been moot” (no longer applicable / active). I believe you intended ‘mute’ (silent).

  3. That would be expecting too much of Congress. They can’t even agree on their own leadership, let alone a complicated regulatory policy.

    • There is an interactive role between the legislative and executive. Congress and the Executive is responsible to put in place the overall policy. A better one in the case of advanced telecom infrastructure, for example, would have been more affirmative and forward looking rather than magical thinking that market dynamics alone would suffice as with the 1996 Telecom Act. Executive agencies play important role in getting deeper into the weeds with more bandwidth than Congress to do so and apply subject matter expertise developed over the longer term.

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