Cable, Wireless Groups, AT&T Join Net Neutrality Fight, Sue in D.C. Circuit

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By Brandon Ross and Paul Barbagallo

April 14 — AT&T Inc. and three trade groups representing the nation's cable and wireless industries filed four separate lawsuits to overturn the FCC's Open Internet order, joining a legal challenge already pending in the same court against the increasingly embattled agency.

In rapid succession, suits were filed by CTIA-The Wireless Association, the National Cable and Telecommunications Association (NCTA) and the American Cable Association (ACA), which collectively represent nearly every cable operator and wireless carrier in the country (CTIA-The Wireless Assoc. v. FCC, D.C. Cir., 15-1091, complaint filed 4/14/15); (National Cable & Telecom Assoc. v. FCC, D.C. Cir., 15-1090, complaint filed 4/14/15); (American Cable Assoc. v. FCC, D.C. Cir., Number not available, complaint filed 4/14/15).

AT&T, a member of CTIA, filed its own suit late April 14 as well (AT&T v. FCC, D.C. Cir., 15-1092, complaint filed 4/14/15).

All three groups and AT&T brought their complaints to the U.S. Court of Appeals for the District of Columbia Circuit, where another trade association, USTelecom, sued the Federal Communications Commission just a day earlier—on April 13, the day the FCC published its Open Internet order in the Federal Register. (A small Texas-based Internet service provider, Alamo Broadband Inc., sued the FCC last month in the U.S. Court of Appeals for the Fifth Circuit.) As of late April 14, the D.C. Circuit had consolidated at least three of the appeals—USTelecom's, CTIA's, and NCTA's—into a single case against the FCC (United States Telecom Association v. Federal Communications Commission, D.C. Cir., 15-1063, order 4/14/15).

The court's order capped a frenzied second day following the FCC's April 13 publication of its Open Internet order in the Federal Register, a much-anticipated event in the telecommunications world. With that publication, parties have 60 days to file suit to overturn the FCC's order. If multiple petitions for review are filed in different circuit courts of appeals within the first 10 days of the 60-day window, a lottery will decide the venue for the appeal. USTelecom, CTIA, NCTA, ACA and AT&T all moved quickly, filing in the D.C. Circuit in the hopes that the court will win the lottery. The D.C. Circuit is viewed by industry groups and the companies they represent as the most likely tribunal to hand the FCC defeat. Twice before the D.C. Circuit has thwarted the FCC's attempts to adopt rules for net neutrality—first in Comcast v. FCC in 2010, then in Verizon v. FCC in 2014.

But regardless of which court hears the case, the legal battle between industry and the FCC over the future of Internet regulation will be fierce and protracted, with final resolution years away.

‘Didn't Have to Be This Way.'

“It didn't have to be this way,” Michael Powell, NCTA's president and chief executive officer, said in a conference call with reporters April 14.

Leading up to the FCC's Feb. 26 vote to adopt its Open Internet order, many of NCTA's members, including Comcast Corp., had publicly endorsed the concept of net neutrality—but under a legal framework based around section 706 of the 1996 Telecommunications Act. Their advocacy shifted sharply when it became clear that the FCC would reclassify broadband Internet access service (BIAS) as a common carrier “telecommunications service” under Title II of the Communications Act, subjecting Internet service providers (ISPs) to the public utility-style laws.

Not surprisingly, the biggest target of three groups' lawsuit is the FCC's Title II reclassification. Broadband Internet access service traditionally has been classified and regulated as an “information service,” subject to light-touch regulation.

“Congress obviously created two distinct approaches to regulating networks,” Powell said in the April 14 press call.

“[W]e believe that the FCC's order dramatically collapses that distinction that congress set up and fundamentally makes everything a telephone service,” Powell said.

In 2002, when Powell was the chairman of the FCC, the agency classified cable modem service as an information service, rather than a telecommunications service covered by Title II or a “cable service” covered by Title VI—a ruling that was ultimately upheld as within the FCC's discretionary authority by the Supreme Court in 2005 in National Cable and Telecommunications Association v. Brand X Internet Services, Inc.

During the press call, Powell noted that the Supreme Court ruled on whether “we were selling two services instead of one, not whether Internet was an information access service.” He added that the Brand X decision can be used as a touchstone for how the courts should rule now.

ACA: We're Too Small to Dominate

Keying in on the Title II issue, the American Cable Association raised concern about how such a regulatory regime will impact the 850 mostly small and medium-sized cable operators that make up its membership.

These small companies, many serving rural areas, simply lack the incentive and clout to be dominant ISP gatekeepers.

“The Open Internet order needlessly saddles ACA's members—half of which have 1,000 customers or fewer—with the extraordinary burden of complying with a complicated new regulatory regime,” ACA said in a press statement April 14. “Most ACA members have never before been subject to Title II regulation for any of their services and have little, if any, capability to understand, let alone address, this complexity. They will have to divert untold time, capital and resources from upgrading their networks and service to ensuring legal compliance with rules that address hypothetical concerns foreign to their experience and well beyond their ability or desire to implement.”

Only a Preview of Legal Arguments

But as expected, none of the suits filed April 14 delved too deeply into the substance of the FCC's Open Internet order.

All of the associations and AT&T claim the FCC's order is “arbitrary and capricious,” an abuse of the agency's discretion and violative of the U.S. Constitution and the Communications Act.

Though the cable and telecommunications industry may appear to be tightly aligned in their opposition to the FCC and to net neutrality, the groups' legal strategies will diverge on key issues.

CTIA: Wireless Is Different

CTIA, for example, will likely argue vehemently that Congress never intended for wireless broadband Internet access service (BIAS) to be regulated by the FCC as a common carrier “telecommunications service” under Title II of the Communications Act; that is the province of Title III.

Indeed, in the FCC's order, the agency cites Title III as additional authority to regulate mobile BIAS providers. To overcome Section 332(c)’s prohibition on the imposition of common carrier obligations on private mobile services, the commission reclassified mobile BIAS as an interconnected service, essentially by redefining the “public switched network” to include Internet protocol (IP) addresses.

“The FCC usurped the role of Congress and departed from a bipartisan mobile-specific framework to create a new intrusive regulatory framework,” CTIA President and CEO Meredith Attwell Baker said in a press statement April 14. “CTIA had no choice but to seek judicial review to preserve the regulatory approach that has been instrumental in helping the U.S. become the global leader in 4G services.”

To Baker and CTIA, the unprecedented rise of mobile devices warrants mobile-specific regulation by the FCC, not a one-size-fits-all, Title II approach.

In a speech last year at the CTIA's Super Mobility Week in Las Vegas, Baker pointed out that the FCC has always treated mobile voice and mobile broadband services differently than their wired equivalents.

“We need rules that treat no part of the ecosystem like a utility,” she said in her speech.

Speaking at the same event, FCC Chairman Tom Wheeler cited statistics indicating that when the commission voted to adopt net neutrality rules in December 2010, which was vacated by a court in January 2014, there were only 200,000 4G LTE (long-term evolution) subscribers; today there are more than 125 million, with infrastructure build-out complete to serve 300 million total Americans. Wireless broadband is too important to the U.S. economy not to have enforceable net neutrality regulations applied to it, Wheeler seemed to suggest then.

Commenting on CTIA's lawsuit, NCTA's Powell said that while the associations may be forced to combine their efforts into one brief, there are some areas where there is little to no common ground.

“We wouldn't be on a brief with [CTIA] saying that wireless [broadband] was mis-classified,” Powell said. That part of the FCC order does not implicate cable operators, he said.

Procedural Next Steps

AT&T and all three groups have until April 23—10 days after the Open Internet order's publication in the Federal Register—to file for a stay.

Powell said the NCTA is seriously considering asking the court for a stay, but needs more time to evaluate its legal arguments.

He pointed out, too, that stays are difficult to get.

“The only other procedural hurdle is that you have to file your stay motion at the FCC before you can file it at the court,” Powell said. “But you do not have to wait for [the FCC] to make a decision on it [before filing with the court].”

When asked if the ACA would seek a stay motion in the case, Ross Lieberman, vice president of government affairs for ACA, told Bloomberg BNA that it was “keeping all options on the table.”

With assistance from Tim McElgunn in Cherry Hill, N.J.

To contact the reporter on this story: Brandon Ross in Washington at and Paul Barbagallo in Washington at

To contact the editor responsible for this story: Heather Rothman at