Court venue may be key to US Internet rules
The US telecommunications regulator faces an uphill battle as its oversight of the Internet is challenged in court, but a change in venue could make all the difference.
January 27, 2011 / 15:11 IST
The US telecommunications regulator faces an uphill battle as its oversight of the Internet is challenged in court, but a change in venue could make all the difference.
Verizon Communications and MetroPCS Communications lodged their complaints with the US Court of Appeals for the District of Columbia, thought by industry analysts and attorneys to be least likely to uphold the Federal Communications Commission's new Internet traffic rules.Derided by critics as a legally shaky government intrusion into regulating the Internet, the rules prevent network operators from blocking lawful content but still let them ration access to their networks.Wireless broadband providers would be given more freedom to manage their networks than landline Internet providers, but the first two challenges center on the wireless aspect.Public interest groups, or companies who favor restraints on broadband providers, are expected to file any rival suit in another court district, hoping to find a more friendly venue.The DC circuit ruled last year that the FCC lacked the authority to stop Comcast Corp from blocking bandwidth-hogging applications on its broadband network, spurring the agency's most recent rulemaking effort.Verizon, the majority owner of the largest US wireless service, and fifth-ranked MetroPCS, have attempted to anchor their challenges in a venue favorable to them by arguing the rules would modify their wireless licenses. Such disputes are sent to the DC appeals court.The public interest community says it has yet to finalize its legal strategy, but filing suits over the different treatment of wireless and wireline networks, and other elements of the order, are options.Suits to comeIf petitions for review are filed in more than one federal appeals court, a lottery would be triggered to determine which circuit will hear challenges to the FCC's rulemaking. That court would be selected at random by the federal judiciary."It's not going to get any better for the public interest groups, and they know that. The only reason they're going to appeal is to keep it out of the DC Circuit," said Sam Feder, a former general counsel of the FCC.Rural telecom companies, mid-sized phone companies and content providers are among those also identified by attorneys and analysts as likely to take the FCC to court.Attorneys expect the bulk of legal challenges to the FCC's open Internet rules to come following publication of the rules in the Federal Register.Senior FCC officials have expressed confidence in the legal foundation backing the rules."But the underlying problem still exists," said David Bronston, former general counsel of New York City's telecommunications agency. "There isn't direct statutory authority from Congress to regulate broadband."A telecommunications attorney familiar with the FCC open Internet proceeding, who spoke on condition of not being named, said the agency stood a better chance before a court not as experienced with its statutory authority. Still, he saw a less than 50% chance that the FCC would prevail in court.He believed the FCC would make a strong enough case to withstand a stay request that would halt enforcement of the rules. He predicted at least two years of litigation would go on with the rules in effect.FCC's shancesThe filings with the D.C. appeals court fulfilled the predictions of many industry analysts that the FCC's split vote last month to adopt the rules would be swiftly challenged.Bronston, an attorney with Cozen O'Connor in New York, said Verizon had a "reasonable shot" at getting the rules overturned by the DC appeals court, but another court might be more sympathetic to FCC's broader jurisdiction.The tougher obstacle for Verizon right now, Bronston said, is backing up its claims for being heard in the DC Circuit.If petitions for review are heard outside of the DC Circuit, the FCC will have a stronger argument for the court to dismiss Verizon's claim of license modification."But this kind of maneuver could still end up getting everything heard in the DC Circuit," Feder, now a partner at Jenner & Block law firm in Washington, DC, said of the Verizon and MetroPCS filings.Verizon could plausibly argue that challenges to the rulemaking should be transferred to the DC appeals court where cases that cannot be transferred are already pending, said Feder. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
