Rate Regulation By Any Other Name

[Commentary] At bottom, network neutrality is nothing more than good old-fashioned rate regulation. Accordingly, if you are going to impose rate regulation, then Title II prescribes certain rules you must adhere to in order to ensure that the regulated firms’ Fifth Amendment due process rights are not violated....At stake...is whether an administrative agency should be permitted to re-write the law—especially when it does so simply to fit a political agenda. According to the D.C. Circuit in United States Telecom v. FCC, the answer appears to be “yes.” Citing the Supreme Court’s seminal case in Brand X, the D.C. Circuit found in USTelecom that the FCC had wide—nearly unbounded—latitude to interpret the Communications Act and not only upheld the agency’s decision to reclassify but also upheld the agency’s ability to “tailor” how it chose to implement Title II. In so doing, the D.C. Circuit—rather by design or by omission—has taken Chevron deference to the extreme.

USTelecom has greatly expanded the commission’s authority to set the rates, terms and conditions of private actors well beyond its statutory mandate. Accordingly, the statutory construct of “Title II” now has no meaning; it is some bizarre legal hybrid that the FCC has made up and the D.C. Circuit has sanctioned. For those who care deeply about due process and the rule of law, the precedent set by the D.C. Circuit in USTelecom is deeply troubling and is a case that we will likely have to deal with its aftermath for years to come.

[Lawrence J. Spiwak is president of the Phoenix Center for Advanced Legal & Economic Public Policy Studies.]