U.S. Court of Appeals for the D.C. Circuit Vacates FCC “Net Neutrality” Rules

January 14, 2014

Today, the United States Court of Appeals for the District of Columbia Circuit issued a decision vacating the FCC’s anti-discrimination and anti-blocking requirements for broadband providers.  In Verizon v. FCC, the D.C. Circuit held that these “net neutrality” rules violated the Communications Act’s prohibitions on regulating broadband providers as common carriers.

In December 2010, the FCC issued an order imposing a number of “prophylactic rules” on fixed and wireless broadband providers, including requirements that these providers treat all Internet traffic similarly regardless of source.  Slip op. at 13.  Verizon filed a petition for review, challenging this order on a number of administrative law and constitutional grounds.

The D.C. Circuit struck down the anti-discrimination and anti-blocking rules because they subjected broadband providers to common carrier treatment in violation of the Communications Act.  47 U.S.C. §§ 153(51); 332(c)(2).  Writing for the Court, Judge Tatel rejected the FCC’s primary defense of the rules, i.e., that they did not constitute prohibited common-carrier regulation because they regulated broadband providers’ relationship with “edge providers” (the entities that provide Internet content, services, and applications) and not with “end users” (retail subscribers of broadband service).  Slip op. at 50-56.  The Court explained:  “Because broadband providers furnish a service to edge providers, thus undoubtedly functioning as edge providers’ ‘carriers,’ the obligations that the Commission imposes on broadband providers may well constitute common carriage per se regardless of whether edge providers are broadband providers’ principal customers.”  Id. at 51.  The Court concluded that, as to the anti-discrimination and anti-blocking requirements, the FCC had relegated broadband providers “to common carrier status,” id. at 56 (citation omitted), and that its attempts to get around this fact were “patently insufficient,” id. at 61.  The Court upheld the FCC’s imposition of disclosure requirements on broadband providers, however, because they had not been challenged as common-carrier duties and were severable from the other requirements.  Id. at 62.

Judge Silberman filed a separate opinion concurring in part and dissenting in part.  He agreed that the FCC’s order “obviously imposes common carrier obligations on broadband providers” and thus conflicts with the Communications Act.  Dissent, Slip op. at 16.  Judge Silberman also concluded, however, that the FCC lacked “affirmative statutory authority to promulgate these rules” in the first place, id. at 1, and that they were arbitrary and capricious as well, id. at 7.

*  *  *

Helgi C. Walker of Gibson Dunn is lead counsel and argued the case on behalf of Verizon in the United States Court of Appeals for the D.C. Circuit on September 9, 2013.

Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have about this development.  Please contact the Gibson Dunn lawyer with whom you usually work, or the author:

Helgi C. Walker – Washington, D.C. (202-887-3599, [email protected])

Please also feel free to contact the following practice group leaders:

Appellate and Constitutional Law Practice Group:
Theodore B. Olson – Washington, D.C. (202-955-8500, [email protected])
Theodore J. Boutrous, Jr. – Los Angeles (213-229-7000, [email protected])
Daniel M. Kolkey – San Francisco (415-393-8200, [email protected])
Thomas G. Hungar – Washington, D.C. (202-955-8500, [email protected])
Miguel A. Estrada – Washington, D.C. (202-955-8500, [email protected])

Administrative Law and Regulatory Practice Group:
Eugene Scalia – Washington, D.C. (202-955-8206, [email protected])

© 2014 Gibson, Dunn & Crutcher LLP

Attorney Advertising: The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.