National Cable & Telecommunications Ass'n v. Brand X Internet Services

(Redirected from National Cable and Telecomm. Assn v. Brand X Internet Services )

National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005), was a United States Supreme Court case in which the court held that decisions by the Federal Communications Commission (FCC) on how to regulate Internet service providers are eligible for Chevron deference , in which the judiciary defers to an administrative agency's expertise under its governing statutes. The case concerned routine regulatory processes at the FCC and applied to interpretations of the Communications Act of 1934 and Telecommunications Act of 1996 , but the ruling also served as an important but indirect precedent on the matter of regulating network neutrality in the United States ,

While the precedent still holds for general FCC policy processes, it has become less influential for network neutrality due to subsequent changes in the judiciary's attitudes toward deferring to the agency's expertise.

Contents

• 1 Background

• 2 Opinion of the court

  • 2.1 Arguments

  • 2.2 Ruling

• 3 Impact

  • 3.1 Deference to FCC regulations

  • 3.2 Network neutrality

• 4 References

• 5 External links

Background

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Per the Telecommunications Act of 1996 and its predecessor the Communications Act of 1934 , the Federal Communications Commission (FCC) is authorized to enforce regulations against new companies, products, and services in the telecommunications field by classifying them into one of several "titles" in the statute. At issue in this case are Title I and Title II of the 1996 Act. If the Commission classifies a given service under Title I in the statute, it is considered to be an "information service" and is subjected to relatively lenient economic regulations. If that service is classified under Title II, it is considered to be a "telecommunications service" and is subjected to much stricter common carrier regulations on the content of messages and prices charged to customers.

With the advent of Internet service providers (ISPs) available to the general public in the 1990s, early services were provided via DSL by telephone companies that were subjected to traditional Title II regulations. Later cable modem service was typically provided by cable TV companies that were subjected to traditional, and less restrictive, Title I regulations. The FCC classified cable modem Internet service as an "information service" in 2002. In the early years of home Internet service, this resulted in a confusing situation in which different types of ISPs were subjected to different levels of telecommunications regulation by the FCC.

After the 2002 classification decision, Brand X , a DSL-based ISP, requested judicial review because it had been subjected to tougher regulations than many of its competitors based on network delivery method (telephone vs. cable) rather than quality of service or customer satisfaction.

The case was initially heard at the U.S. Court of Appeals for the Ninth Circuit under the name Brand X Internet Services v. FCC. That court ruled that the 2002 classification decision by the FCC, in which cable modem was determined to be an "information service", was in error. That was because cable modem service had already been confirmed as a "telecommunications service" under the 1996 Act (and therefore eligible for stricter regulations) in the Ninth Circuit precedent _AT&T Corp. v. City of Portland _ in 2000.

The FCC believed that the Circuit Court should not have second-guessed its regulatory decision, and appealed to the U.S. Supreme Court . Meanwhile, the National Cable & Telecommunications Association (NCTA), an industry trade group that favored the lesser regulations under the "information service" classification, joined the suit.

Opinion of the court

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Arguments

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The case was accepted by the Supreme Court under the new title National Cable & Telecommunications Association v. Brand X Internet Services. The Supreme Court, in an unexpected act, decided to review the dispute not as a matter of precedent (as the Circuit Court did) but as a matter of judicial deference to the expertise of an administrative agency. In particular, the administrative law principle of Chevron deference dictates that when a statute passed by Congress instructs an agency like the FCC on how to regulate its field of expertise, if that statute was written in an ambiguous and open-ended fashion, this indicates that Congress intended the agency to exercise its expertise on a case-by-case basis. Subsequently, whenever an agency regulatory decision is challenged in court, judges should assume that agency personnel are experts on the topic and the best qualified to assess the issue at hand. Thus, judges should defer to the agency's expertise and not second-guess its decisions.

Brand X argued that when the agency decision is clearly in error, Chevron deference should not apply. The company argued that Internet service should be classified as a "telecommunications service" under the 1996 Act, because this would subject all ISPs to the same regulations, thus leveling the playing field, while all would be considered common carriers with robust obligations to customers and to the public.

The NCTA argued that the FCC's classification decision was correct because the 1996 Act defines "information service" as "the offering of a capability for genera

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