Court Opinion

ID: 8408293
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:41:44.882271+00
Date Added: 2024-06-11T16:47:33.698432
License: Public Domain

THOMAS, Circuit Judge,
concurring:
I agree that our prior decision in AT & T v. City of Portland, 216 F.3d 871 (9th Cir.2000), controls the statutory interpretation question and requires a remand. I write separately to underscore my conclusion that City of Portland was correctly decided. Considered in its entirety, the 1996 Telecommunications Act compels the conclusion that cable modem contains a telecommunications service component.
A
This is not a case that implicates Chevron deference, not only for the reasons noted in our unanimous opinion, but also because it is a question of pure statutory interpretation. In reviewing an administrative agency’s construction of the statute it administers, we must consider first “whether Congress has directly spoken to the precise question at issue.” Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). “If Congress has done so, the inquiry is at an end; the court ‘must give effect to the unambiguously expressed intent of Congress.’” Food and Drug Administration v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 132, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000) (quoting Chevron, 467 U.S. at 843, 104 S.Ct. 2778). In making that assessment, we look not only at the statutory section in question, but also analyze the provision in the context of the governing statute as a whole, see id. at 132, 120 S.Ct. 1291, presuming congressional intent to create a “ ‘symmetrical and coherent regulatory scheme.’” Id. at 133, 120 S.Ct. 1291 (quoting Gustafson v. Alloyd Co., 513 U.S. 561, 569, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995)). If, after conducting such an analysis, we conclude that Congress has not addressed the issue, that is, that “ ‘the statute is silent or ambiguous’ — we proceed to the second step, where we decide whether the agency’s interpretation ‘is based on a permissible construction of the statute.’ ” Pacheco-Camacho v. Hood, 272 F.3d 1266, 1268 (9th Cir.2001) (quoting Chevron, 467 U.S. at 843, 104 S.Ct. 2778). In short, if our analysis indicates that the statute is silent or ambiguous, we “must respect the agency’s construction of the statute so long as it is permissible.” Brown & Williamson, 529 U.S. at 134, 120 S.Ct. 1291 (citing INS v. Aguirre-Aguirre, 526 U.S. 415, 424, 119 S.Ct. 1439, 143 L.Ed.2d 590 (1999)).
*1135In City of Portland, we engaged in this analytical exercise and concluded that Congress meant what it said in defining “telecommunications.” We did not discern any ambiguity in the statutory meaning for the agency to interpret; thus, Chevron deference would have been inappropriate even if the agency had interpreted the statute prior to City of Portland. As the Supreme Court stated in Barlow v. Collins, 397 U.S. 159, 166, 90 S.Ct. 832, 25 L.Ed.2d 192 (1970): “[When] the only or principal dispute relates to the meaning of the statutory term, the controversy must ultimately be resolved, not on the basis of matters within the special competence of the [agency], but by judicial application of canons of statutory construction.” As the Supreme Court has emphasized, “[t]he judiciary is the final authority on issues of statutory construction.” INS v. Cardoza-Fonseca, 480 U.S. 421, 447, 107 S.Ct. 1207, 94 L.Edüd 434 (1987) (quoting Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778).
Our role in statutory interpretation is necessarily different from that of an agency’s. As Judge Kozinski has explained:
But in performing their proper function, judges must listen for the voice of the legislature, not to the sound of their own heartbeats. Because courts are bound by the best construction of the statute, they may alter their interpretation only in response to a powerful new insight as to the law’s meaning, not because a different panel of judges prefers a different result.
Agencies, on the other hand, may turn on a dime: Their proper function is to fill in policy gaps pursuant to an explicit or implicit delegation of authority from Congress. See, e.g., Morton v. Ruiz, 415 U.S. 199, 231, 94 S.Ct. 1055, 1072, 39 L.Ed.2d 270 (1974) (“[t]he power of an administrative agency to administer a eongressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress”). Where Congress has delegated such authority, the statute becomes a clear vessel which changes its tint as it is filled and refilled by various policy pigments. Because the agency administering the statute is not bound to a single formulation of statutory language, it may make changes without considering whether the new approach more accurately reflects the meaning of the statute.
Mesa Verde Constr. Co. v. N. Cal. Dist. Council of Laborers, 861 F.2d 1124, 1146-47 (9th Cir.1988) (en banc) (Kozinski, J., dissenting).
Thus, once we have fulfilled our judicial function in interpreting an act of Congress and have determined the meaning is dear, the subsequent action of an agency cannot and should not alter our conclusion. If it did, then case law would be in a constant state of uncertainty, awaiting a new interpretation by an agency.
That being said, given the present context, it is appropriate to explain why I believe the interpretation of City of Portland was correct.
B
As noted in both City of Portland and our opinion today, Internet access involves two separate services: an information service that provides e-mail, web browsing, and other means of manipulating information, and a telecommunications “pipeline” that transmits the actual data. The statute defines and regulates these two components separately, in accordance with the historic distinction between basic and enhanced services. 47 U.S.C. § 153(20), (46). Although this differential is more apparent when two different companies are involved, the same statutory framework applies when a single company provides the two services.
*1136Telecommunications means “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.” 47 U.S.C. § 153(43). Everyone agrees that cable modem users will have the capacity to send and receive email and download pre-existing content from websites. These activities involve, at least in part, the transmission of “information of the user’s choosing” without any change in form or content by the cable company. Naturally, integrated cable modem services also offer subscribers the “capability” for “generating, acquiring, storing, ... [and] retrieving” this information through email software, web browsers, and the like, activity that clearly falls within the definition of “information service.” 47 U.S.C. § 153(20). However, under the statutory definition, the “information service” includes only the “capability” to generate, transmit, and receive email and information “via telecommunications.” The actual transmission, that is, putting this capability into practice, falls outside the definition and requires additional “telecommunications.” 1
The FCC acknowledges that cable modem service must be provided “via telecommunications” but insists that cable modem does not involve “telecommunications service” because it does not involve the “offering of telecommunications for a fee directly to the public.” 47 U.S.C. § 153(46). Rather, the agency suggests, customers purchase an integrated package of services that may include telecommunications but does not include telecommunications service. In other words, the agency places a great deal of weight on the distinction between “telecommunications” and “telecommunications service.” However, the full statutory definition, the overall legislative scheme, and the associated regulatory history clearly indicate that cable modem provides not only telecommunications but also telecommunications service.
Congress defined “telecommunications service” as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.” 47 U.S.C. § 153(46). Cable modem subscribers who use the cable company’s own information services transmit that information via the telecommunications pipeline offered by the cable company. As the FCC admits, other cable modem subscribers may completely “bypass that company’s web browser, proprietary content, and e-mail” and “click through” to another service. In the Matter of Inquiry Concerning High-Speed, Access to the Internet Over Cable and Other Facilities, 17 F.C.C.R. 4798, 4815, 2002 WL 407567 (2002). Both classes of cable modem subscribers pay a monthly “fee” “directly” to the cable company in order to use “telecommunications.” Nothing in the definition suggests that the telecommunications component must be priced or offered separately in order to qualify as a telecommunications service. Under the FCC’s approach, the general public would be purchasing a service that nobody offered.
Prior to the decision in this case, the FCC consistently recognized that Internet access implied the separate provision of a telecommunications service by some entity. In the conventional world of dial-up access over “plain old telephone service,” the agency classified the Internet Service Provider (ISP) as an information service and *1137the telephone service as a telecommunications carrier. See, e.g., In the Matter of Federal-State Joint Bd. on Universal Serv., 13 F.C.C.R. 11,501, 11,589-40, 1998 WL 166178 (1998). When a local telephone company simultaneously offered Internet access, it was still required to offer the telecommunications services to other ISPs on a common carrier basis. See, e.g., In the Matter of Bell Operating Cos. Joint Petition for Waiver of Computer II Rules, 10 F.C.C.R. 13,758, 13,767-68, 1995 WL 637904 (1995) (discussing Pacific Bell’s offering of Internet access service and its compliance with unbundling requirements).
Similarly, when the FCC first applied the 1996 law to integrated broadband services, the agency concluded that Internet access via DSL contained both information service and telecommunications service components:
An end-user may utilize a telecommunications service together with an information service, as in the case of Internet access. In such a case, however, we treat the two services separately: the first service is a telecommunications service (e.g. the xDSL-enabled transmission path), and the second service is an information service, in this case Internet access.
Deployment of Wireline Servs. Offering Advanced Telecomms. Capability, 13 F.C.C.R. 24,012, 24,030, 1998 WL 458500 (1998). Thus, the decision by some of the Bell Operating Companies (BOCs) to offer an “integrated” Internet access package did not affect the regulatory classification. Instead, the FCC noted that “BOCs offering information services to end users of their advanced service offerings, such as xDSL, are under a continuing obligation to offer competing ISPs non-discriminatory access to the telecommunications services utilized by the BOC information services.” Id. at 24,031. This position reflects a much more reasonable reading of the statute.2
Other provisions in the Telecommunications Act buttress the idea that companies may offer telecommunications services even when they also offer other services. First, the Act extends common carrier requirements to every telecommunications carrier (defined as “any provider of telecommunications services”), but “only to the extent that it is engaged in providing telecommunications services.” 47 U.S.C. § 153(44). Thus, under the statutory scheme, some “providers of telecommunications services” may simultaneously provide other services, presumably including information services, which would be subject to a separate regulatory regime. Second, as mentioned in City of Portland, 216 F.3d at 879, the pole attachment provisions at 47 U.S.C. § 224(d)(3) at least contemplate the possibility that a cable system may provide tele-communications service. See also Nat’l Cable & Telecomms. Ass’n v. Gulf Power Co., 534 U.S. 327, 353-54, 122 S.Ct. 782, 151 L.Ed.2d 794 (2002) (Thomas, J., concurring in part and dissenting in part) (arguing that because the FCC had not yet classified cable modem service, it could not yet regulate the pole attachment rates).
Third, Congress instructed the FCC and state commissions “with regulatory jurisdiction over telecommunications services” to use their regulatory powers in order to encourage the deployment of “advanced telecommunications capability.” Telecommunications Act of 1996, Pub.L. No. 104-104, Title YII, § 706(a), 110 Stat. 56, 153 (1996). The Act defined this “advanced telecommunications capability” as “high speed, switched, broadband telecommuni*1138cations capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology,” Id. at § 706(c)(1), an apt description of cable modem service. Although this section does not explicitly state that the “telecommunications capability” inherent in cable modem must include a “telecommunications service,” the state and federal regulatory powers referenced in this section have traditionally been applied to basic transmission services rather than enhanced information services. See, e.g., In the Matter of Section 64.702 of the Comm’n’s Rules & Regulations (Second Computer Inquiry), 77 F.C.C.2d. 384, 431-33, 0080 WL 233301 (1980) (noting the FCC only had authority over enhanced services under the general provisions of Title I and refraining from imposing regulations).3 This suggests that Congress intended some component of the “advanced telecommunications capability” to be subject to the Title II powers governing telecommunications services.
Turning to the law as a whole, the 1996 Act was designed to accelerate the private sector deployment of advanced telecommunications and information technologies “by opening all telecommunications markets to competition.” H.R. Conf. Rep. No. 104-458 at 113; see also Stuart Minor Benjamin, et al., Telecommunications Law and Policy 716 (2001) (noting that the 1996 Act was designed in part to increase competition in telecommunications markets and promote increased access to advanced telecommunications services). As we recognized in City of Portland, the Act mandates “a network architecture that prioritizes consumer choice, demonstrated by vigorous competition among telecommunication carriers.” City of Portland, 216 F.3d at 879. In order to foster this competition, the 1996 Act applies the traditional common carrier obligations of non-discrimination and interconnectivity to telecommunications service providers “regardless of the facilities used.” 47 U.S.C. § 153(46). Application of these principles to cable modem service would enhance independent ISP access to telecommunications facilities, almost certainly increasing consumer choice. Naturally, the FCC may choose to forbear from enforcing these regulations if it determines they are not necessary to promote competition or protect consumers. 47 U.S.C. § 160(a)-(b).4 Nonetheless, the Act creates a general presumption in favor of opening markets to competition.
The evolution of advanced telecommunications regulation prior to the 1996 Act reflects the same underlying belief that widespread access to “basic” transmission facilities would spur competition in “enhanced services” and provide consumers with a wider variety of more closely tailored products. See, e.g., Second Computer Inquiry, 77 F.C.C.2d at 417. Under this “Computer II” framework, the FCC subjected basic transmission services to common carrier regulations and left enhanced services largely unregulated. Companies that owned transmission facilities and offered both basic and enhanced services were required to separate out the basic transmission component and offer it to all providers of enhanced services, subject to the interconnectivity and non-discrimination requirements of Title II. In the Matter of Indep. Data Communications Mfrs. Ass’n, 10 F.C.C.R. 13,717, 13,719, 1995 WL 613619 (1995).
*1139These decisions formed the regulatory-background for the 1996 Act, in which Congress created the new, corresponding categories of “information services” and “telecommunication services.” The FCC previously acknowledged that Congress intended the categories in the 1996 Act to “parallel” those developed through the Computer II decisions:
Reading the statute closely, with attention to the legislative history, we conclude that Congress intended these new terms to build upon frameworks established prior to the passage of the 1996 Act. Specifically, we find that Congress intended the categories of “telecommunications service” and “information service” to parallel the definitions of “basic service” and “enhanced service” developed in our Computer II proceedings ....
Universal Service, 13 F.C.C.R. at 11,511. Thus, the background regulatory regime required that a bundled package of enhanced services and basic services be separated out and subjected to different requirements. Given this context, the Congressional decision to create “parallel” categories in the new statute creates a presumption in favor of similar treatment for information and telecommunications services.
The specific legislative history of “telecommunications service” provides additional support for the idea that cable modem incorporates a telecommunications service. The House report on its version of the bill implied that “telecommunications service” was distinguished from “telecommunications” largely in order to exclude internal, privately provided telecommunications networks. See H.R.Rep. No. 104-204, at 126 (“By defining ‘telecommunications service’ as those services and facilities offered on a ‘common carrier’ basis, the Committee recognizes the distinction between common carrier offerings that are provided indifferently to the public or to such classes of users as to be effectively available to a substantial portion of the public, and private services.”). The Senate report explained that its definition of “telecommunications” excluded “services involving interaction with stored information, that are defined as information services. The underlying transport and switching capabilities on which these information services are based, however, are included in the definition of ‘telecommunications services.’ ” S.Rep. No. 104-23, at 18. The report also stated that “ ‘[telecommunications service’ does not include information services, cable services, or ‘wireless’ cable services, but does include the transmission, without change in the form or content, of such services.” Id. Thus, both Houses implied that sale to the public of a service allowing the unaltered transmission of information qualified as a telecommunications service.5 Although Congress intended information services and telecommunications services to be mutually exclusive under both definitions, see Universal Service, 13 F.C.C.R. at 11,522-23, nothing suggests that telecommunications service ceased to be so when offered to the public along with an information service.
The FCC responds that it has already ruled that the mere transmission of unal*1140tered data does not imply that an information service contains a telecommunications service component. Universal Service, 13 F.C.C.R at 11,538-39 (1998). According to this 1998 decision,
The provision of Internet access service involves data transport elements: an Internet access provider must enable the movement of information between customers’ own computers and the distant computers with which those customers seek to interact. But the provision of Internet access service crucially involves information-processing elements as well; it offers end users information-service capabilities inextricably intertwined with data transport. As such, we conclude that it is appropriately classed as an “information service.”
Id. at 11,539-40. Critically, however, the Internet service providers at issue in the report “typically own no telecommunications facilities. Rather, in order to provide those components of Internet access services that involve information transport, they lease lines, and otherwise acquire telecommunications, from telecommunications providers.... ” Id. at 11,540. That is, someone still has to provide telecommunications service, even though the ISP’s resale of this service to the public does not transform the ISP into a telecommunications service provider.6 In the integrated cable modem context, the same company provides these two, entirely separate services.
Finally, the FCC complains that the interpretation required by City of Portland would require it to “find a telecommunications service inside every information service.” However, as mentioned, the agency never arrived at this result for dial-up ISPs who either purchased teleeommunica-tions services from others or relied upon users to access the ISP through conventional phone lines. Universal Service, 13 F.C.C.R. at 11,539. Information services provided by ISPs who purchased telecommunications services from cable companies should be subject to the same regulatory regime. See, e.g., Indep. Data Communications, 10 F.C.C.R. at 13,719-20 (1995) (holding that non-faeilities-based carriers who offered both enhanced services and basic transmission would be treated as if they only offered enhanced services). The FCC has not demonstrated that cable modem differs in any way that would preclude similar treatment.
In my view, the statutory definitions, combined with the overall regulatory and legislative context, compel the result that cable modem service includes a telecommunications service component. Thus, even if we were writing on a clean slate, my conclusion would be the same as the one we reached in City of Portland as to the meaning of the statute.

. The definition of information service explicitly excludes "any use of such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.” 47 U.S.C. § 153(20).

. The agency has now decided to reconsider its treatment of DSL broad-band service. In the Matter of Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, 17 F.C.C. Red. 3019, 2002 WL 252714 (2002).

. As discussed below, Congress incorporated a similar distinction into the structure of the 1996 Act.

. The FCC argued in its brief that sufficient competition exists across broadband technologies, though several petitioners argued vigorously that many subscribers, especially in rural areas, do not have access to broad-band alternatives such as DSL.

. In forging compromise language, the conference committee adopted the general definition of telecommunications service from the Senate bill but deleted the second sentence, "[t]he term includes the transmission, without change in the form or content, of information services of cable services, but does not include the offering of those services.” The conference report does not specify why this sentence was deleted, H.R. Conf. Rep. No. 104-458, at 117 (1996), though the FCC later concluded that it had been deleted in order to avoid treating broadcasters and cable systems as telecommunications carriers. Universal Service, 13 F.C.C.R. at 11,523.

. A telecommunications carrier selling broadband transmission service to ISPs in effect offers telecommunications "to such classes of users as to be effectively available directly to the public” and thus provides "telecommunications service” under 47 U.S.C. § 153(46).