For more than a decade, across administrations of both parties, the Federal Communications Commission (FCC or Commission) warned that providers of Broadband Internet Access Service (BIAS) had the financial incentive and technological means to interfere with their customers’ free and open access to the internet. During that period, the Commission documented repeated instances of such abuses and vowed to use the powers it had to prevent further incidents, even as its interpretation of those powers shifted over time. Until two years ago. In 2017, the agency abandoned the project to prohibit BIAS interference with the open internet. It reclassified BIAS as an information service generally outside its authority to regulate and repealed its existing open internet rules.
In place of any substantive consumer protections, the Commission enacted a limited disclosure rule that, it said, was sufficient – but also necessary – to enable competitive forces in the internet ecosystem to prevent open internet abuses by BIAS providers. But having disavowed nearly every source of authority to regulate in this area, the Commission was left scrambling to support its lynchpin disclosure rule. It ultimately founded the rule on Section 257 of the Act, a provision it never mentioned in its Notice of Proposed Rulemaking (NPRM) and which, in fact, the NPRM conveyed was not under consideration. See In re Restoring Internet Freedom, 32 FCC Rcd. 4434 (proposed May 23, 2017).
The panel in this case upheld the Commission’s decision in relevant part, declaring its hands bound by National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005). The panel acknowledged the dramatic changes in technology, markets, and internet usage in the nearly fifteen years since that decision. And it recognized that in light of those changes, the FCC’s justification for its classification had changed from the one approved in Brand X. The panel’s conclusion that Brand X nonetheless required it to uphold the FCC’s revised rationale in a dramatically altered factual context conflicts with Brand X itself and merits en banc review. The panel’s rejection of petitioners’ notice challenge to the Commission’s disclosure rule likewise warrants review because it conflicts with this Court’s precedent in National Tour Brokers Ass’n v. United States, 591 F.2d 896 (1978), and fails to address the parties’ principal arguments on the issue.