On Tuesday, June 14, 2016, a panel of the D.C. Circuit upheld, on a 2-1 vote, the FCC’s 2015 Open Internet Order that reclassified mass market broadband Internet access service from a lightly regulated Title I “information service” to a more heavily regulated “telecommunications service” subject to Title II of the Communications Act. 

While all three of the judges on the panel agreed that the FCC had the legal authority to reclassify broadband Internet access service as a telecommunications service, Judge Williams partially dissented, arguing that the FCC’s economic analysis was flawed and that the agency had violated the Administrative Procedure Act in several ways in exercising that authority.  The majority opinion, authored by Judges Tatel and Srinivasan concluded that:

• The FCC has the authority to reclassify broadband Internet access service from an information service to a telecommunications service and impose common carrier regulation consistent with Title II of the Act.
• The FCC has authority to regulate interconnection arrangements – arrangements that broadband providers make with other networks to exchange traffic in order to ensure that their end users can access edge provider content anywhere on the Internet.
• The FCC has authority to conclude that mobile broadband Internet access service – like all broadband – is a telecommunications service.
• The FCC could properly forbear from applying select Title II obligations to broadband Internet access service providers.
• Specific challenges to the FCC’s Open Internet rules and its Internet General Conduct standard lacked merit.
• First Amendment challenges to the FCC’s three Open Internet rules also lacked merit.

The majority opinion also re-affirmed the D.C. Circuit’s earlier ruling (Verizon v. FCC) that Section 706 of the Act gives the FCC rulemaking authority to encourage broadband deployment.

Although petitioners may seek review, either to the entire D.C. Circuit (en banc review) or by petitioning the U.S. Supreme Court to review the decision (petition for certiorari), the chances that either court would grant review are modest.  Both the majority and partial dissenting opinions are lengthy (115 and 69 pages, respectively) and tightly reasoned.  Judge Tatel is well regarded as a jurist and specialist on common carrier issues and the D.C. Circuit grants very few en banc rehearing petitions each year.  Because the majority and dissent agreed on the key question of FCC authority, differed primarily on factual issues and questions of administrative law, and there is no split among the circuit courts currently on the question of FCC authority to reclassify, the Supreme Court may not be inclined to grant review either.

Now that the FCC’s authority to treat broadband Internet access as a telecommunications service has been resoundingly affirmed by the D.C. Circuit, the Commission is likely to move quickly on follow-on rulemakings, such as the Privacy rulemaking, and may take action on issues such as data caps and “zero-rating” (i.e. practice of exempting certain on-line services from data caps), that are presently under investigation.  It will also likely initiate rulemakings to apply Title II disabilities access requirements to broadband Internet access service and may also address the question of universal service fund contributions for broadband providers.

Because the D.C. Circuit chose not to stay the FCC’s open Internet rules while hearing the case, the D.C. Circuit’s ruling, for all practical purposes, preserves the status quo.  All broadband Internet access service providers should be complying with the FCC’s no blocking, no throttling and no paid prioritization rules and have their open Internet disclosures prominently displayed on their websites, as detailed in our May 23 and June 6 updates.

If you have any questions about the FCC’s Open Internet rules or the transparency requirement, please contact Barbara Esbin at besbin@cinnamonmueller.com or (202) 872-6811, Bruce Beard at bbeard@cinnamonmueller.com or (314) 394-1535, or Scott Friedman at sfriedman@cinnamonmueller.com or (312) 372-3930.

FINAL REMINDER:  Cable Online Public Inspection File Requirements Begin June 24, 2016

As outlined in an FCC Public Notice released last month, all cable systems with 1,000 or more subscribers must place their new public inspection file documents in the FCC-hosted online public file database beginning June 24, 2016.  Existing public file documents must be uploaded into the FCC-hosted database by December 24, 2016 (subject to exemptions outlined below).

Until Friday, cable operators may access a test version of the FCC-hosted online public file database to practice uploading documents and to gain familiarity with the database's other features.  The test version is for practice purposes only and all documents uploaded will be deleted once the actual database goes live on June 24, 2016.  

Cable operators should carefully review their existing public inspection files before the online public inspection file requirement takes effect.  To assist in that effort, we outline below key changes to the public inspection file rules and new obligations cable operators must satisfy when establishing their online public files. 

Background.  Under the FCC’s existing rules, cable operators must maintain a public inspection file for each cable system at the system office the cable operator maintains for business purposes (or at another accessible place in the community served by the system).  This public inspection file must be made available for inspection during regular business hours.  Certain additional information must be maintained and made available to FCC representatives or local franchise authorities upon request.

Cable public file and recordkeeping requirements vary according to the size of the system.  Systems with fewer than 1,000 subscribers have the fewest obligations.  Systems with more than 5,000 subscribers have the most extensive obligations. 

Online Public File Requirements.  The primary new and revised public inspection file requirements cable operators must meet when the online public file rules take effect are described below.

Small system exemptions.  Cable systems with fewer than 1,000 subscribers are exempt from the requirement to upload their public inspection files to the FCC’s online database.  These systems must continue to maintain their local public inspection files as required under existing rules.

Cable systems serving between 1,000 and 5,000 subscribers, which previously were required to make certain information only available upon request, must now post this information to their online public files.

Document formats and locations.  The FCC did not specify a standard format for the online file.  Cable operators will be required to upload documents to the online file in their existing format, and the FCC will display the documents in both the uploaded format and in a pdf version.  If a required document already exists in a searchable format, documents must be uploaded in that format to the extent technically feasible.  For channel lineups, operators may include in the online database a link to an alternate online location, such as the operator’s website, where this information is maintained.

Back-up political files.  Operators must make back-up copies of their political file documents, so they can be produced if the FCC online database is unavailable.  Operators may meet this back-up requirement by periodically downloading a mirror copy of their online public file, including the political file, or by maintaining a local back-up of the political file.

Website requirements.  Operators with websites must post a link, on their home page, to the first page of the operator’s online public inspection file.  Operators must also include on their home page contact information for a representative who can assist people with disabilities with issues related to the content of the public file, as well as contact information for an individual who can answer questions about the file in general.

With respect to a cable system’s equal employment opportunity (“EEO”) requirements, cable operators must continue to make their EEO materials available on their websites.  Cable operators may meet this obligation by providing a direct link to their EEO materials in their online public file. 

Geographic information.  When first establishing their online public file, cable operators will be required to provide a list of five-digit ZIP codes served by the cable system.  Cable operators with more than one physical system identifier (“PSID”) will be required to identify the ZIP code(s) served by each PSID.

Clarifications Regarding Content of Public Files.  Cable operators will no longer be required to maintain their proof-of-performance and signal leakage information in the public inspection file or upload this information to the online file.  Note, this material still must be maintained by the operator and made available to the FCC and local franchise authorities upon request.

Effective Dates for Online File Requirements.  The effective dates of the online file requirements vary depending on system size.

Uploading new materials.  Systems with 1,000 or more subscribers must begin using the online public file for new materials on June 24, 2016.  With respect to political files only, systems with between 1,000 and 5,000 subscribers are not obligated to begin uploading political file new material until March 1, 2018. 

Uploading existing materials.  Systems with 1,000 or more subscribers must upload existing materials (except for political file materials) to the online database by December 24, 2016.  Cable operators are not required to upload existing political file materials.  Operators that choose not to upload existing political file materials must maintain the records locally for the remainder of the political file’s two-year retention period.

If you have questions about the cable public file rules or the requirement to post them online, please contact Scott Friedman at (312) 372-3930 or sfriedman@cinnamonmueller.com.