Source: http://precursorblog.com/?q=content/how-fcc-hurt-its-title-ii-anti-stay-case
Timestamp: 2019-04-22 17:59:02+00:00

Document:
However, the FCC remains very confident that a majority of the court will overlook the multiple serious legal infirmities in the FCC’s Title II case and deny a stay based on sweeping legal deference to the FCC and political deference to President Obama’s public position for the FCC to reclassify the Internet as Title II telecommunications.
Thus this stay decision, and the ultimate judicial resolution of this case, potentially by the Supreme Court, could prove to be a test of American rule of law.
1. The FCC brief exposes a glaring internal inconsistency with the FCC’s Order.
Thus the FCC admits in its brief, and in its Order, that the FCC Order does impose “burdens” on broadband providers, and it also admitted it chose to keep some of the “burdens,” like sections 201 and 202, to protect the public.
The simplest of cursory review of Title II by the court will show that the FCC retained the provisions with the most burdens, i.e. sections 201 and 202 powers, upon which the remainder of Title II rests.
Simply, why did the FCC need to forbear from Title II at all, if even the most burdensome Title II provisions, from which the FCC chose to not forbear, implicitly represent at best “speculative or insubstantial” harms to broadband providers?
The FCC can’t have it both ways.
2. The FCC brief spotlights the FCC’s arbitrary and capricious decision making.
Let the magnitude of the FCC’s caprice here set in: “alleged reliance interests.
The FCC brief denies that broadband providers, other Internet businesses, and private investors -- who have invested upwards of a trillion dollars over the last decade relying on the law, Supreme Court precedent and multiple FCC precedents classifying all broadband infrastructures: cable, DSL, wireless and power-lines, as Title I services, not Title II utility rate regulated services -- have no reliance interests requiring “substantial justification” to overcome.
Just like the FCC summarily dismissed that the un-forborne parts of Title II -- like sections 201 and 202 that subject common carriers to sweeping rate regulation obligations -- pose no “burdens” on broadband providers, the FCC is summarily asserting that imposing sections 201 and 202 implicates no reliance interests.
It is the quintessence of arbitrary and capricious behavior, when the FCC essentially can’t/won’t acknowledge before the court that the interests which maximally relied upon FCC’s settled precedent have no reliance interests at all, let alone reliance interests warranting “substantial justification” to overturn.
3. The FCC brief exposed a big mistake in its legal strategy.
Apparently the FCC remains confounded that broadband providers have only challenged the FCC’s Title II reclassification (and the conduct standard) and have not challenged the FCC’s section 706 authority or the FCC’s bright-line net neutrality rules banning blocking, throttling and paid prioritization.
It’s pretty obvious from reading the FCC Open Internet Order that it never occurred to the FCC that a legal challenge would concede section 706 and the bright line net neutrality rules, and then isolate Title II for legal challenge.
That’s because the clear backbone of the FCC’s integrated legal defense in the Order and in its stay brief is the Verizon v. FCC decision. Tellingly, the FCC brief cites Verizon v. FCC as much as it cites the Supreme Court’s Brand X decision.
Obviously the FCC likes the Verizon Court’s affirmation of the FCC’s section 706 authority and many of the FCC’s market findings/assumptions in its 2010 Open Internet Order that the court otherwise overturned.
The FCC’s apparent failure to anticipate a Title II-only challenge now has the FCC having to de facto assume and imply to the court that its section 706 and Title II authorities are somehow inseverable, when they are completely separate legally.
This big awkward FCC mistake in legal strategy has resulted in an FCC defense that may be inappropriately, too-heavily-reliant on Verizon v. FCC, which is a much more of section 706 relevant precedent that a straight Title II classification relevant precedent, like the Supreme Court’s Brand X decision which was solely focused on FCC classification.
Importantly, both the FCC and industry did not brief the Verizon v. FCC court about the legality of reclassifying broadband as a Title II service, after the FCC repeatedly found the facts and law warranted an information services classification. That’s because the FCC asserted 706 authority, and did not assert Title II common carrier authority to promulgate its 2010 net neutrality rules.
Simply, to this court, reclassifying broadband as a telecommunications service, after a decade of being legally classified as an information service, is a new legal question that Verizon v. FCC did not rule on.
This is a big problem for the FCC’s case for a variety of strong reasons.
The 1996 Telecommunications Act made Title I information services and Title II common carrier telecommunications services mutually exclusive legal classifications.
Not only are Section 706 & and Title II part of different legal titles, they are from different laws; the 1996 Telecommunications Act versus the 1934 Communications Act.
They are even opposite legal models in that section 706 is situational, conditional, targeted and reactive while Title II is ex ante and comprehensive.
Ironically, the main similarity of section 706 and Title II is that the FCC has now asserted unlimited authority to regulate the Internet under both Section 706 and Title II.
The FCC’s big legal mistake here is that the FCC effectively argues Verizon v. FCC is a major Title II, classification-relevant precedent, when it is a really a very different section 706, net neutrality precedent.
In sum, for the FCC to ultimately prevail on reclassifying broadband as a telecommunications service the D.C. Court of Appeals and the Supreme Court ultimately must confer near carte blanche deference on the FCC.

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