By Larry Downes
Washington – Amid the frenzied efforts last Friday to avert a shutdown of the federal government, the House took time out of the budget debate to pass House Joint Resolution 37, largely on party lines (six Democrats joined all but two of the Republican majority).
The resolution “disapproves” last December’s order by a majority of the Federal Communications Commission to impose controversial new “Open Internet” conditions on broadband Internet access providers—the so-called net neutrality rules.
The new rules would prohibit wireline broadband providers from blocking their customers’ access to particular websites (perhaps from content providers who compete with the access provider) and would impose extensive new disclosure requirements of how broadband operators manage their networks.
A resolution of disapproval is a unique type of legislation authorized by the 1996 Congressional Review Act. It establishes an expedited procedure for Congress to nullify new rulemakings by independent federal agencies including the FCC. The CRA was a key piece of the Republicans’ 1994 “Contract with America,” in many ways a precursor to the recent “Tea Party” movement for limiting government and reigning in the federal bureaucracy.
Under the CRA, if both the House and Senate approve a resolution by simple majority and can avoid or override a Presidential veto, the rules are nullified before they take effect. In essence, the resolution makes clear that Congress did not delegate the required legislative power to the agency in the first place. HJR 37 says simply that Congress disapproves the new rules and “such rule shall have no force or effect.”
Once a resolution is passed, the agency is also forbidden from reissuing the same rule in different form, unless it receives explicit new authority from Congress to do so.
A Contentious History
The net neutrality rules were contentious from the start. After over a year of extensive public comments, behind-the-scenes negotiations with industry and consumer advocates, and efforts by Verizon and Google to break the stalemate with a proposed legislative framework, FCC Chairman Julius Genachowski put a revised version of the rules to a vote just before Christmas. (That is, after the mid-term elections but before the new Congress was sworn in.)
The three Democratic Commissioners voted for the rules, with the two Republican Commissioners voting against. All five Commissioners issued separate opinions, making clear that only Genachowski himself was truly satisfied with the final draft. His fellow Democrats argued that the rules should have been stronger; his Republican colleagues argued that the rules were unnecessary and, more to the point, that Congress had not given the agency the authority to enroll them.
Over the course of the long debate on the rules, a bi-partisan majority of the last Congress had written to the Chairman urging him not to go forward. But when the new Congress arrived in Washington in January, the fight over net neutrality had taken on a more clearly partisan character.
Tea party activists in particular singled out the Open Internet rules as a prime example of the kind of regulatory overreach they hoped to stop. In response, Democrats circled the wagons around the besieged FCC Chairman, calling the rules essential to preserving freedom of speech on the (American) Internet.
Given the new Republican majority in the House, passage of the resolution of disapproval there was conceded to be a certainty, even by Democrats.
The partisan tone of deliberations on the new rules was clear from the first of several hearings the House has convened in the past few months. Rep. Robert Goodlatte (R-VA), Chairman of the Subcommittee on Intellectual Property, Competition and the Internet, held the first hearing on the rules in February. (Goodlatte is also co-chair of the Congressional Internet Caucus.) Debate on the FCC’s order followed strict party lines, with Republicans trashing the rules and Democrats defending them.
At that hearing, I gave testimony on the most serious legal, technical, and procedural defects in the new rules, which the FCC itself described repeatedly as “prophylactic.” I pointed out the danger of legislating ahead of any clear market failure, especially in dealing with disruptive technologies and dynamic markets,. I also noted that existing antitrust enforcement powers in the Department of Justice and the Federal Trade Commission could easily handle any hypothetical future violations of the neutrality principles.
Even before Friday’s vote, the Republican majority in the House had used the stop-gap spending bills to deny the FCC the power to use any of its appropriation to implement or enforce the new rules.
Now the action will shift to the Democratic-led Senate, where passage is far less certain. Under the CRA, resolutions of disapproval are filibuster-proof, and require only 30 Senators to force a floor vote. Republicans would need only a few Democrats or Independents to pass the resolution.
Getting those votes would have been more likely in the last Congress. Indeed, most commentators believe that even the House action was futile at best and a waste of time at worst. President Obama has been a staunch supporter of the rules and of Chairman Genachowski from the beginning.
Net neutrality was an Obama campaign promise, though what specific version of the rules the President had in mind is not clear. Throughout the year-long rulemaking, activist groups including Public Knowledge and Free Press put extraordinary pressure on the White House to support the new rules.
While some leading advocates for strict neutrality rules left the White House over the course of the debate, the increasingly partisan tone of the fight makes a Presidential veto more likely.
If any doubt remained, last week the administration issued a rare pre-emptive threat, saying in a statement that “If the president is presented with a resolution of disapproval that would not safeguard the free and open Internet, his senior advisers would recommend that he veto the resolution.”
Overturning a Presidential veto would be impossible. But that does not mean the House vote on Friday will prove only a symbolic statement. Last week, Politico reported that nullifying the new rules was one of several “policy riders” Republicans were pushing in negotiations over the 2011 budget.
The draft budget bill released today does not include any reference to the net neutrality rules, but the budget deal is far from done. Just as President Obama was forced to swallow renewal of the Bush tax cuts, the Open Internet rules could still end up a casualty in the budget war.
Court Challenges: Start Over
There are also legal challenges to the rules from broadband access providers. Even before the new rules had been published, both Verizon and MetroPCS filed lawsuits in a D.C. appellate court to challenge the FCC’s legal authority to issue them.
A legal maneuver by the two companies attempted to ensure the case would be heard by the U.S. Court of Appeals for the D.C. Circuit, which last year rejected efforts by the FCC to enforce an earlier net neutrality policy statement against Comcast.
Comcast was found to be throttling or blocking high-volume file transfers of some customers using the BitTorrent peer-to-peer protocol without disclosing the practice. After several hearings, the FCC issued a non-financial sanction against Comcast, which appealed to the D.C. Circuit.
The appellate court ruled that the FCC had no legal authority to enforce the policy statement. The court’s opinion in the Comcast case also forecloses most if not all of the FCC’s strongest arguments in support of last December’s rulemaking.
Despite promises from Chairman Genachowski that the agency’s legal team had found new theories to support the rulemaking, the final rules ground their authority in a Congressional policy guideline that encourages the FCC to promote broadband adoption. The FCC itself has consistently argued that provision of the Communications Act does not grant the agency any substantive rulemaking authority.
But last week, the court rejected both lawsuits as premature. For reasons that are not entirely clear, the FCC has yet to actually publish the new rules in the Federal Register, and the court held that legal challenges could not begin until after publication takes place.
Verizon and MetroPCS can re-file their challenges without prejudice, but will not be guaranteed the case will be heard in the D.C. appellate court. If multiple challenges are filed in different federal appellate circuits, a lottery process will determine which court will hear all the cases. (Appeals from sanctions, as in the Comcast case, are heard exclusively in the D.C. Circuit.)
Though the D.C. court’s opinion in the Comcast case will weigh heavily regardless of where the case is heard, other circuits are not bound to accept the Comcast decision as binding precedent.
Some advocacy groups are reported to be planning court challenges in other circuits that the rules did not go far enough. While that kind of challenge has little hope of prevailing, it could throw the case into the lottery. Indeed, several sources I spoke with last week indicated that a chance of keeping the case away from the Comcast court may be the true purpose of any challenges from pro-neutrality groups.
Also last week, the FCC voted to require mobile Internet providers to negotiate data roaming agreements. (That vote was likewise split on party lines.) The FCC already requires carriers to enter into roaming contracts for voice traffic, but its authority to regulate data traffic over the wireless networks is far less clear. Experts I spoke with last week expect the data roaming rules will also be challenged.