Court case

Free Press and the other challengers to the Federal Communications Commission's decision to reinstate the UHF discount have told a federal court that it makes no sense for the FCC to reinstate a rule it concedes is obsolete "based on the mere possibility that the Commission will, in the future, open a proceeding to consider something that, as of now, a majority of the Commission believes it cannot or should not do." That came in their filing in support of a request for an emergency stay of the implementation of the UHF discount, which was scheduled to happen June 5 but was delayed by the US Court of Appeals for the DC Circuit to allow more time for it to consider that stay request and the FCC's response. The filing was also in response to Sinclair's intervention in support of the FCC and in opposition to Free Press' motion for stay.

In defending the stay to the court, Free Press attorneys pointed out that even in voting for returning the discount, FCC Commissioner Michael O'Rielly said he did not think the FCC had the authority to adjust the statutorily-set 39% cap on a TV station group owner's national audience reach, the reconsideration of which FCC Chairman Ajit Pai had given as a reason for reinstating the discount he conceded was likely obsolete and instead reviewing the discount along with the 39% cap.

As detailed in this BULLETIN, a proper implementation of Title II precluded the Federal Communications Commission’s approach, forcing the Agency to ignore the “vast majority of rules adopted under Title II” and “tailor[] [Title II] for the 21st Century.” Surprisingly, the DC Circuit found in United States Telecom Association v. FCC that the agency had wide latitude to interpret the Communications Act and not only upheld the agency’s decision to reclassify but also its gross distortion of Title II. In so doing, the DC Circuit has extended Chevron deference beyond any reasonable limit, greatly expanding the Commission’s authority well beyond its statutory mandate.

This BULLETIN first presents several examples of how the 2015 Open Internet Order ignores both the plain language of Title II and the extensive case law to achieve select political objectives, followed by a discussion of the DC Circuit’s acceptance of such legal perversions. Next, this BULLETIN discusses how the FCC attempted to use the same theory of the case found in USTelecom to regulate the prices of Business Data Services. Conclusions and policy recommendations are at the end.

The Federal Communications Commission is standing with the Federal Trade Commission when it comes to a federal court decision that leaves a potential regulatory gap for broadband regulation, in the process taking a shot at AT&T. The US Court of Appeals for the Ninth Circuit in May agreed to an en banc (full court) review of its three-judge panel decision that left the Federal Trade Commission's authority to oversee edge-provider's protections of privacy in some circumstances very much in doubt. The court also said that in the interim that panel decision was not to be cited as precedent of the Ninth Circuit.

Such en banc review is unusual, but the decision had prompted a lot of attention given that potential online privacy impact. The three-judge panel, in overturning the FTC's action against AT&T for throttling the speeds of unlimited data customers, last August ruled that the regulatory exemption that prevents the FTC from regulating common carriers is not "activity-based," confined to common carrier "activity" by an entity that has the status of a common carrier, but is status-based, extending to noncommon carrier activity by that entity as well. That meant that if Verizon, a common carrier, bought Yahoo!, an edge provider, the FTC could not enforce Yahoo! privacy policies, and the FCC could not either because it does not regulate edge providers, leaving a potential privacy gap.

The DC Circuit Court of Appeals put on hold the Federal Communications Commission’s plans to restore a key media ownership rule that allowed major station groups to expand through mergers and acquisitions. The ruling could prove to be a roadblock to Sinclair Broadcast Group’s pending $3.9 billion acquisition of Tribune Media TV stations.

The court issued a stay to the FCC’s decision in April to restore the so-called UHF discount, which has allowed major media companies to exceed restrictions on the number of stations that they can own. The court said that the stay will give them an opportunity to review the merits of the case. Apparently, the temporary stay granted on June 1 extends through June 7, and the real test will come next week after the review is completed by a three-judge panel.

Federal Communications Commission lawyers have told a DC federal court that opponents of the April 20 decision to reinstate the UHF discount have not met the high bar for an emergency stay of that decision. The discount means that UHF TV station ownership only counts for half of their audience reach toward the 39% national ownership cap. The US Court of Appeals for the DC Circuit has granted an administrative stay of the June 5 effective date of the return of the discount but only so it can review the FCC's defense to an emergency stay request sought by opponents of the decision and the response from those opponents, which include Free Press and Prometheus. In opposing the emergency stay, the FCC says the commission simply concluded the agency had erred in a previous order—under then-chairman Tom Wheeler—that repealed the discount without also adjusting the cap. It did grandfather ownership groups for which the change would have pushed them over the 39% limit, though that grandfathering would not extend to sales of those stations.

The federal judges who upheld the Federal Communications Commission's TItle II classification of Internet service providers in 2016 have signaled that even under those rules, ISPs could block content or slow certain traffic, just so long as they created a "walled garden" that had clear signage signaling that was what they were doing. That is according to a new blog post from Hank Hultquist, VP of federal regulatory for AT&T, which strongly opposed Title II.

Hultquist cites the concurring opinion from judges Sri Srinivasan and David Tatel earlier in May in the en banc (full court) decision of the US Court of Appeals for the DC Circuit not to review the three-judge panel ruling last year to uphold the FCC's Open Internet order. Srinivasan and Tatel wrote the majority opinion in that panel decision. "In the past," said Hultquist, "supporters of Title II often alleged that without reclassification, ISPs would be free to block unpopular opinions or viewpoints that they disagreed with. In the understanding of the DC Circuit panel majority, it seems that the Title II order does not touch such practices as long as an ISP clearly discloses its blocking plans to customers."

Several advocacy groups have asked the United States Court of Appeals in Washington to stay the Federal Communications Commission’s April 20 decision to relax the national TV ownership cap by restoring the UHF discount in calculating station group coverage.

The effect of the FCC action is to lift the allowable coverage from 39% of TV homes to 78% assuming that all groups in a market are served by UHF stations. The immediate effect of the stay would be to derail Sinclair's proposed $3.9 billion purchase of Tribune Media that would balloon Sinclair's coverage from just below 39% to 72%. The motion for emergency stay pending a full review of the FCC action was filed by the Institute for Public Representations at Georgetown University Law Center on behalf of Free Press, Office of Communication of the United Church of Christ, Prometheus Radio Project, Media Mobilizing Project, Media Alliance, National Hispanic Media Coalition, and Common Cause. The court has given the FCC until June 1 to respond to the motion.

Daryl Parks, the attorney representing "Cleveland Broadband Consumers" claiming AT&T is "redlining" service in Cleveland and elsewhere, is pledging to open a multi-front legal attack on the company, including raising questions about its fitness for the multi-billion-dollar contract to manage FirstNet.

AT&T has said it does not redline and continues to invest in wired and wireless broadband in Cleveland and elsewhere, but Parks is not persuaded. Parks has sent a letter to AT&T and its board warning that "in the near future" he plans to certify a class for a class action lawsuit, bring a formal redlining complaint at the FCC, and "raise with the nation’s governors the issue of AT&T’s suitability to manage the emergency communications service FirstNet, given the urgency of providing service to low-income communities by first responders in disasters such as Hurricanes Andrew, Katrina and Sandy."

[Commentary] When the government engages in prospective cell-site surveillance, it obtains a court order requiring a cell provider to provide the phone’s location at that moment in “real time.” That contrasts with collection of historical cell-site records, when the government obtains a court order requiring the provider to hand over stored records retained by a cell provider in the ordinary course of business from some time in the past. Although every circuit court and state supreme court to rule on historical cell-site collection has concluded it is not a search, the Florida Supreme Court ruled in Tracey v. Florida that prospective cell-site surveillance is a search. Importantly, Tracey went out of its way to say that it was ruling only on prospective surveillance and not on historical collection. On May 22, the U.S. Court of Appeals for the Fifth Circuit ruled in United States v. Wallace that the reasoning of its precedents on historical collection applies equally to prospective cell-site surveillance. In Wallace, the Texas Department of Safety had a warrant out for the arrest of a gang member. The police knew the suspect’s cell phone number, so they obtained what the opinion calls a “Ping Order” authorizing the police to determine the locations of cell site towers being accessed by a number.

[Kerr is the Fred C. Stevenson Research Professor at The George Washington University Law School]