Tag Archives: Supreme Court

The FCC’s Ability to Levy Fines

Today’s blog takes a deeper dive into the upcoming case at the Supreme Court concerning appeals by AT&T and Verizon over fines levied by the FCC. The original appeals followed an FCC finding that all three major U.S. cellular carriers were liable for violating customer privacy by selling access to customer location data. This data showed every place that a customer visited during the day, something that should make every cell customer uncomfortable. The FCC fined AT&T $50 million, T-Mobile  $80 million, and Verizon $47 million, with smaller fines against a few other carriers. The case at the Supreme Court looks specifically at the FCC’s ability to levy fines against the carriers for violating consumer privacy rights.

AT&T and Verizon appealed the FCC fines. Both companies were emboldened by two recent Supreme Court rulings that weakened the FCC’s authority. The first was Loper Bright Enterprises v Raimondo, which said that courts don’t have to defer to expertise at federal agencies when deciding lawsuits. The second case was SEC v. Jaresky, which said that federal agencies should give defendants a chance to have a trial by jury in a federal court rather than levying fines.

As usually happens with cases that make it to the Supreme Court, lower courts issued conflicting opinions about the FCC fines. The 5th U.S. Circuit Court of Appeals overturned the fines levied against AT&T, while the 2nd U.S. Circuit Court of Appeals upheld the FCC’s fines against Verizon.

One of the more interesting things about both appeals was that the carriers did not deny their bad actions – they had clearly allowed access to customer location data. Both appeals relied on the Supreme Court ruling in SEC v. Jaresky and argued that the FCC should have offered the carriers the chance to take the cases to court and hold a jury trial as an alternative to the FCC fines.

It’s clear that the carriers are trying to weaken or break the FCC’s ability to levy fines and are willing to go through this process as a way to avoid future fines. I find it unbelievable that the carriers would have chosen to take this specific case to a jury if they had been given that option. It’s impossible to seat a jury of people who don’t use cellphones, and I would wager that a jury would be unhappy that a carrier would sell the data to track them 24/7. It’s easy to imagine that a jury would assess damages much larger than the FCC fines if these cases had instead gone straight to court.

It will be interesting to see what the carriers do if they win this case. Winning doesn’t take them off the hook for selling customer data, and the cases would likely be remanded back to the FCC to give the carriers the option for a jury trial. As silly as it sounds, I’m dubious that, even with a second chance, the carriers would choose the jury trial. Again, the real goal of the carriers in this case is to weaken the FCC’s options in future disputes.

It will be unfortunate if the Supreme Court sides with the carriers and hobbles the FCC’s ability to levy fines. The FCC typically fines regulated companies for two reasons, for failing to comply with FCC rules or for abusing the general public. The first type of fines is generally relatively small and the big fines are saved for companies engaged in abuse and fraud of the public. In a recent action, the FCC fined Telnyx LLC for allowing foreign scam robocalls into the U.S. telephone network.

Protecting the public is one of the major roles of a regulatory agency. A policy shift that makes it difficult or impossible to hold large corporations accountable for abuses against the public would be a terrible outcome.

Supreme Court Rules on ISPs and Copyrights

The Supreme Court ruled in favor of Cox Communications in the longstanding lawsuit by Sony that sought to hold Cox liable for customers who download copyrighted material. The Court’s ruling was unanimous, which is a big win for ISPs. The Supreme Court went further and said that ISPs would only be liable if they intended for their service to be used for copyright infringement.

The Supreme Court’s ruling goes back to a 2018 lawsuit where Sony sued Cox when the ISP refused to disconnect customers who were reported to be downloading music. The record labels insisted that Cox should permanently disconnect any customer who engages in repeated copyright infringement. Cox argued this would turn ISPs into Internet policemen who would have to monitor and punish customers who engage in copyright infringement. That doesn’t just mean people who download copies of music, but could also apply to movies, games, books, pirated sports events, and copyrighted written materials. A Virginia Court agreed with the music labels and found Cox liable for both contributory and vicarious copyright infringement and awarded the record companies an astonishing $1 billion in damages.

Cox appealed the ruling, and the Fourth Circuit U.S. Court of Appeals reversed the penalties for vicarious infringement and vacated the $1 billion of damages. This was still a troublesome ruling for Cox because the company was still considered to be liable for contributory damages for actions taken by its customers.

ISPs would be in an uncomfortable position if the Court had ruled in favor of the music labels. ISPs don’t monitor customer usage because that would mean looking closely at everything that customers do. The music labels wanted Cox and other ISPs to react to complaints made by copyright holders. That might make sense in a perfect world, but complaints to ISPs rarely come directly from copyright holders. Instead, there is an entire industry that makes a living by issuing takedown requests for infringements of copyrighted materials.

The music companies expected Cox to cut off subscribers after only a few violations of copyright. The permanent loss of a customer would be a severe financial penalty for Cox. It would be a severe penalty for the public, where a household would lose broadband in a world where a lot of markets have only one realistic choice of fast broadband. It’s not hard to imagine a scenario where a teenager or visitor to a home violates copyrights and gets the entire household disconnected from broadband. The music industry was trying to avoid the harder solution, which is to legally pursue and seek fines for people who violate copyright.

The ruling has wider implications than just for ISPs and record labels. Social media platforms are filled with news articles, video clips, and other copyrighted materials that users post. The Court’s ruling was an affirmation that companies are not liable for users who abuse online services by downloading or posting copyrighted material. Ultimately, the people who violate copyright should be held liable, regardless of how hard that is to implement.

This ruling doesn’t take online platforms off the hook for responding to takedown requests to block copyrighted materials. However, the ruling does lower the potential for copyright holders to seek huge dollar judgments against ISPs that refuse to act as copyright policemen.

Supreme Court to Hear ISP Copyright Case

The Supreme Court has agreed to hear a case that will determine if ISPs are required to terminate broadband service for customers who are accused of copyright violations. The suit is a result of a longstanding dispute between Cox Communications and music labels, including Sony Music Entertainment.

The Supreme Court case stems from a series of court cases that ended with the Fourth Circuit Court of Appeals ruling against Cox. The case was accepted by the Supreme Court since the ruling conflicts with some aspects of similar cases in the Second and Ninth Circuit Courts.

The case originated with a 2019 decision by a Virginia Court that found Cox liable for both contributory and vicarious copyright infringement and awarded the record companies an astounding $1 billion in damages. Cox appealed, and the Fourth Circuit U.S. Court of Appeals reversed the charges for vicarious infringement and vacated the $1 billion of damages.

This was still a troublesome ruling for ISPs because even after getting rid of the damage penalty, Cox still stands in violation of contributory damages over actions taken by its customers. The record labels insist that Cox should permanently disconnect any customer who engages in repeated copyright infringement. This ruling would turn ISPs into Internet policemen who must monitor and punish customers who engage in copyright infringement. That doesn’t just mean people who download copies of music, but also movies, games, books, and pirated sports events.

This is an incredibly uncomfortable role for ISPs. ISPs don’t monitor customer usage because that would mean looking closely at everything that customers do. Instead, the music companies want Cox and other ISPs to react to complaints made by copyright holders. That might make sense in a perfect world, but the real world isn’t perfect. Complaints are rarely made to ISPs by copyright holders, and there is an entire industry of companies that make a living by issuing takedown requests for infringements of copyrighted materials.

The music companies expect ISPs to cut off subscribers after only a few violations of copyright. ISPs are in the business of selling broadband connections, and the last thing they want to do is to permanently disconnect paying customers. This would also be devastating for broadband customers. Most homes in the U.S. don’t feel that they have broadband choice, and most have access to only one fast ISP. If they lose that connection, they could find themselves cut off from functional broadband. It’s not hard to imagine a scenario where a teenager or visitors to a home violate copyrights and get the household disconnected from broadband. Losing broadband is a severe penalty for an infraction that would incur only a small fine if taken to court. The right penalty is to force people who infringe copyrights to pay a fine. Copyright holders are asking to bypass the law enforcement and court system, and want to turn ISPs into the judge, jury, and executioner for copyright violations.

ISPs need to keep an eye on this case and should have associations file comments in the court proceeding. A ruling against Cox is a ruling against every ISP. I assume consumer advocates will also weigh in with briefs since the penalty of permanently losing broadband doesn’t fit the crime.

Supreme Court Upholds the Universal Service Fund

On Friday, the Supreme Court ruled that the FCC has the authority to operate and fund the Universal Service Fund.

The case that prompted the Supreme Court Decision was FCC v. Consumers’ Research.  Consumers’ Research is a nonprofit activist group that originally filed cases in multiple courts alleging that the method used to fund the USF is an illegal tax since it did not arise from specific direction or approval from Congress. Consumers’ Research also argued that Congress neglected its legislative responsibility allowing the FCC to establish the size of the Universal Service Fund and to decide the method for collecting revenues to fund it.

The case made it the Supreme Court when the U.S. Court of Appeals for the Fifth Circuit agreed with Consumers’ Research and said that the USF is unconstitutional. That ruling conflicted with rulings from the Sixth and Eleventh Circuits that largely blessed the FCC and the USF.

Consumers’ Research had argued that fees to fund the Universal Service Fund are a tax, and, as such, must fit a special nondelegation rule such that Congress must set a numeric fixed cap, a tax rate, or the equivalent. The Court rejected this argument. The Court points out that Section 254 directs the FCC to collect contributions that are “sufficient” to support universal service programs. The Court said the word “sufficient” acts as a cap on the amount of revenue that the FCC can collect since it can only collect money for purposes to benefit those “in rural areas and other high-cost areas (with a special nod to rural hospitals), low-income consumers, and schools and libraries.”

Consumers’ Research had argued that the Act gives the FCC boundless authority, but the Court disagreed and said that the FCC is free to periodically redefine its programs as long as those programs are aimed at accomplishing universal service goals.

Consumers’ Research also took exception to the FCC’s delegation of the USF to USAC (Universal Service Administrative Company). The Court rejected this assertion because USAC is broadly subordinate to the FCC. The FCC appoints the Board of Directors, approves the budget, and requires USAC to act consistently with FCC rules and directives.

Finally, the Court rejected the argument that the combination of Congress’s grant of authority to the FCC and the FCC’s reliance on USAC together violate the Constitution, although neither one does so alone.

Overall, the Supreme Court ruling is a total repudiation of the ruling of the Fifth Circuit. This ought to put attacks on the existence of the Universal Service Fund to rest for a while. Just as an aside, if you’ve never read a Supreme Court ruling, they are not easy reading, but worthwhile for those interested in the topic.

However, this doesn’t take the Universal Service Fund out of the news or off the hot seat. The funding mechanism for the USF is clearly broken and the fund can’t continue with fees assessed only on interstate telecom services. There are bills pending in both the House and Senate that would spread funding to broadband customers and to the biggest companies that use the web (referred as edge providers in the legislation).

Another Significant Supreme Court Ruling

The Supreme Court came down with another decision last week that is going to further hobble administrative agencies like the FCC. The case is McLaughlin Chiropractic Associates, Inc. v. McKesson Corp., No. 23-1226.

This case started in 2013 as a class action lawsuit filed in federal court in the Northern District of California. The dispute between the parties began when McKesson Corporation sent unsolicited advertisements by fax to class members of the suit, including McLaughlin Chiropractic. The advertisements were sent to traditional fax machines as well as to online fax services.

The plaintiffs claimed that the unsolicited faxes were in violation of the Telephone Consumer Protection Act (TCPA) which forbids unsolicited communications with consumers without giving them a chance to opt out of the communications. The alleged damages come from recipients spending money on paper and toner to print the unsolicited faxes, which the TCPA refers to as advertiser cost-shifting.

While the case was pending in California courts for six years, the FCC issued an order that excluded online fax services from the TCPA since online faxes receive electronic files and don’t print hard copies of a received fax.

The McLaughlin case made it to the Supreme Court because the District Court found that it was required to follow the new FCC order, even though it disagreed with the FCC’s interpretation of the TCPA. The District Court also felt constrained by 1950 legislation referred to as the Hobbs Act, which has been interpreted as barring district courts from disagreeing with a federal agency’s interpretation of a statute.

The recent Supreme Court ruling sided with the District Court by a 6-3 vote. The Supreme Court ruled that “The Hobbs Act does not preclude district courts from independently assessing whether an agency’s interpretation of the relevant statute is correct.”

This is a significant ruling because it gives more explicit power to District Courts to disagree with an administrative ruling of a federal agency. It’s likely that there is a District Court somewhere in the country that will disagree with almost any federal agency ruling, meaning that it will be that much easier to tie up every decision made by the FCC or other federal agency in court.

When you tack this ruling onto the Supreme Court’s ruling last year in Loper Bright Enterprises v. Raimondo, it’s going to be increasingly difficult for federal agencies to issue decision that will stick. The Loper Bright ruling overturned a long-standing deferential approach to agencies’ interpretations of statutes, making it easier to sue them.

This new ruling also has practical implications since it explicitly weakens FCC enforcement of the TCPA. Among other things, the TCPA rules are the FCC’s primary tool for its effort to restrain the use of autodialers and artificial voices used in spam messages to consumers.

USF at the Supreme Court

The U.S. Supreme Court will hear oral arguments on March 26 in the case of FCC v. Consumers’ Research regarding the constitutionality of the Universal Service Fund. The Court will be reviewing a ruling by the U.S. Court of Appeals for the Fifth Circuit that said that the USF is unconstitutional. That ruling conflicted with rulings from two other appeal courts that largely blessed the FCC and USF.

The case that drove this to the Supreme Court was filed by Consumers’ Research, a nonprofit activist group. The 11th Circuit ruled that the method used to fund the USF is an illegal tax that didn’t have any specific direction or approval from Congress. Consumers’ Research also argues that Congress neglected its legislative responsibility by giving the collection process to the FCC. They argue that rather than specifying a budget for the USF, Congress gave the FCC the power to decide how big the fund will be.

The case might more aptly be renamed as The Telecom Industry v Consumers’ Research because parties from across the industry have filed amicus briefs supporting the FCC and the Universal Service Fund. For example, a brief was filed jointly by NTCA – The Rural Broadband Association, USTelecom, and the Competitive Carriers Association. That brief argues that the FCC has the authority to operate the USF, including the ability to oversee USAC, the day-to-day administrator of the fund.

Another brief filed jointly by NRTC, NRECA, CFC, and many other organizations focuses on the benefits of the Universal Service Fund and the impact on the public if the fund is eliminated. They also argue that the way the FCC administers the fund is constitutional.

Like almost every topic these days, the USF question has become political. A group of fifteen GOP Attorneys General filed a brief in the case that asks the Court to rule that the USF is unconstitutional. They acknowledge that a lot of good comes from the USF, but argue that it is more important to stop Congress from delegating powers to agencies.

As is usual with Supreme Court cases, the press and public will try to decipher the temperature of the justices on the issue. It’s likely that a decision won’t be rendered until this summer.

If SCOTUS scuttles the current USF, it will be up to Congress to decide if it values the functions being done by the fund. Congress could probably authorize the current USF and the FCC’s role in a law with only a few paragraphs of language. Congress could also preempt this challenge at any time before the ruling. The whole industry recognizes that the USF needs reform, particularly in the way it is funded. That’s likely to be the sticky point for finding a Congressional solution because the funding question pits a lot of powerful lobbies against each other.

More States Considering Low Broadband Prices

Now that New York’s Affordable Broadband Act has gone into effect, other states are looking to mandate low broadband rates for low-income households. The New York law went into effect when the U.S. Supreme Court refused to hear an appeal of the case.

State Senator Pavel Pavano of Massachusetts proposed SD1200, “An Act preserving broadband service for low-income consumers”. This law proposes that all ISPs offer 100 Mbps broadband to qualified low-income households for $15 per month. This fee must include equipment rental and any usage charges, meaning no separate charges for modems or for data caps. Unlike New York, there is no exception for small ISPs. The qualification for the discount seems to match the qualification used for the now-defunct federal ACP plan. Once every five years, ISPs can increase rates by the lesser of 2% or the most recent annual increase in the consumer price index. ISPs also can offer 200 Mbps for $20 per month, with a rate increase allowed every two years.

In California, Assemblymember Tasha Boerner introduced  AB 353 that provides broadband discounts for low-income households. The bill generally requires ISPs to offer affordable home broadband to customers. This proposed law doesn’t yet suggest any specific rates or broadband speeds, but the intention of legislators is to add that requirement at some point.

The proposed bill is being linked to the larger Digital Equity Bill of Rights legislation and introduces the legislative concept that ISPs should have affordable rates.

There may be more legislation coming from around the country. Twenty-two states filed a brief in support of New York when the issue was being considered by the Supreme Court. The petition supported the concept that States have the right to set broadband rates when the FCC and the federal government decides to not do so. The petition was signed by California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Wisconsin, and the District of Columbia. Many of these states might have been supporting the idea of states’ rights, so we’ll have to see how many eventually result in broadband legislation.

As would be expected, ISPs are already reacting to these proposed laws. A number of ISPs are actively lobbying against the proposed bill in Massachusetts.

A group of ISPs have also petitioned the Supreme Court after its decision and asking the Court to rethink about taking the issue. While nothing is impossible, courts don’t normally change their mind about what goes on a docket. However, there will likely be new appeals if the Massachusetts or California bills become laws.

Supreme Court Punts on Low NY Rates

In an interesting development, the U.S. Supreme Court refused to take the appeal case where ISPs wanted to overturn a New York law that requires ISPs to offer low rates to low-income households.

This case began when the New York legislature approved the Affordable Broadband Act in 2018, which requires ISPs to offer broadband rates to low-income households of no more than $15 for 15 Mbps or $20 for 200 Mbps. ISPs immediately appealed the law and won an injunction against the lower rates until courts heard the issue. Earlier this year, the 2nd U.S. Circuit Court of Appeals in Manhattan ruled that federal telecommunications law does not stop states from regulating broadband rates. When the Supreme Court refused the case, the New York Attorney General said the State would start enforcing the law in thirty days.

To be clear, the refusal of the Supreme Court to take the case does not mean it endorses the original law, but merely that the justices decided against adding this case to an already busy docket.

The intent of the original law is clear – the NY legislature thinks that larger ISPs in the state should be forced to offer affordable rates to low-income households. That’s an interesting concept because it elevates broadband to the level of a necessity akin to low rates that are mandated for rents and electricity for some low-income households. It’s a very different concept than funding low rates through an external subsidy.

There is not likely to be a huge impact from the implementation of the law since the biggest ISPs in the state already offer plans that meet the law. Charter reached a settlement agreement with the State in August to offer low rates for the next four years for participants in the National Free School Lunch Program or those receiving Supplementary Security Income. The State says Charter should have been offering this plans as a result of agreement with the state for the merger with Tim Warner Cable in 2016. Since Charter reached that agreement, both Altice and Verizon have agreed to offer similar plans. The concessions from the largest ISPs in the state might be part of the reason why the Supreme Court didn’t take the case.

However, now that the law is in effect, the temporary agreement with Charter will become permanent, as will the plans of other large ISPs. The original law exempted ISPs with fewer than 20,000 customers.

The real issue of the case is a jurisdictional issue which asks if states have the right to regulate broadband prices. The regulatory world has always operated under the general presumption that States are allowed to regulate things that the federal government elects not to regulate.

The FCC has never attempted to regulate broadband rates and has been focused on a yoyo of policy flip-flops as subsequent FCC’s either kill or reinstate Title II regulation of broadband. It’s now clear that the FCC is out of the broadband regulation business since a federal court recently ruled that FCC has no authority to regulate broadband.

Title II regulation would have given the FCC the authority to regulate broadband rates. Even if the FCC never exercised the right, an FCC right to regulate could theoretically hinder states from implementing rate regulation.

The New York law is an interesting precedent because it solidifies the ability of states to regulate broadband in general and rates specifically in the absence of federal broadband regulation. Now that the law has gone into effect, it seems inevitable that other states will explore similar laws. The big ISPs that operate in multiple states are likely to find themselves supporting different plans across the country – exactly the kind of patchwork regulation that makes ISPs prefer federal regulation over state regulation. I’ve always been mystified why ISPs work so hard to kill weak regulations at the FCC when the alternative is different rules in the states. My conclusion on that question is that fighting regulation is a reflex for large companies, even when leaving things alone might be better for them.

Ending the Chevron Deference

You might have heard that the Supreme Court recently made a ruling that will have a huge impact on federal regulators like the FCC. The case was Loper Bright Enterprises v. Raimondo and involved a suit by a New England fishing company against the National Marine Fisheries Service (NMFS), a federal agency.

The suit came from a dispute where federal rules required that fishing boats carry a government-appointed inspector onboard to monitor that fishermen aren’t catching fish over limits set to protect against overfishing. The plaintiff, Loper Bright, went to court to argue that it shouldn’t have to pay the cost of the inspector, about $700 a day. A district court agreed with the NMFS, and a federal appeals court affirmed the lower court decision. Loper Bright appealed to the Supreme Court, which accepted the case in May 2023. The Supreme Court recently ruled in favor of the fisherman, saying that the NMFS didn’t have explicit direction from Congress to require fisherman to pay for inspectors.

This ruling is being seen as the end of the Chevron deference, which was established by a Supreme Court ruling in 1984 in Chevron U.S.A. v. Natural Resources Defense Council.  The Chevron deference basically said that federal agencies should get to make policy decisions that fit within their overall mandate from Congress. For the last forty years, this case would have been resolved as the district court and appeals court handled it. The courts have assumed that Congress is not required to micromanage agencies and specific industries rules like the inspector fees. Courts have concluded that the experts at federal agencies know best how to interpret Congress’s intent.

This ruling will have several consequences for agencies like the FCC. The ruling is a huge win for the big ISPs and cable companies that the FCC regulates. If those companies don’t like an FCC decision, they just have to claim that the FCC doesn’t have the specific authority to make the ruling – and the chances are that they will be right. Agencies like the FCC create regulations based on broad guidelines given to them by Congress. Congress does not dictate the minutiae of the dozens of issues the FCC considers every month. For Congress to do so would largely eliminate a reason to even have an FCC.

As ISPs challenge FCC rulings, courts are likely going to put FCC ruling on hold. There will be a huge flood of such suits being filed against all federal agencies, and these new cases are going to pile up in the courts and take years to clear. Even if an agency like the FCC is deemed to have had the authority for a specific ruling, it may take years to go into effect until the courts settle the matter. This new interpretation by the Supreme Court means a lot of FCC rulings are going to be blocked by the courts due to the agency not having the specific authority for a given decision.

One way to clear the mess this would be for Congress to pass more specific laws. In this case, Congress could pass a law allowing the inspectors and fees, and the issue would be settled. An active Congress could clear cases out of the courts by approving the regulations that are being challenged. But that’s not realistic for several reasons.  Congress has been largely ineffective for a number of years as partisan politics have blocked most laws from even being considered. From a more practical perspective, there are dozens of federal agencies that make decisions about a wide range of important issues all of the time, and intervening in all of them would bog Congress to doing little else.

There is a second interesting option. At least for the issues that the FCC regulates, States could aways get into the fray. States have generally been given leeway to regulate anything that is not being done by the FCC – and that could turn into a big list after a few years. Any challenges to States would likely involve State’s rights rather than regulatory agency authority.

It’s not hard to imagine the law departments at the big ISPs getting ready to pounce on any FCC decision they don’t like. It’s hard to think that this ruling won’t eventually result in agencies like the FCC being hamstrung and paralyzed, unable to make decisions.

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.