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tv   The Communicators Internet Regulation Court Ruling  CSPAN  October 14, 2019 8:00pm-8:32pm EDT

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. . . . >> host: joining us to discuss is i-zone who served as senior adviser to fcc chair tom wheeler for several years and is currently with the georgetown law institute for technology and patrick halley who is senior vice president at u.s. telecom, a trade association here in washington d.c. mr. halley, before we put on our advocates hats, give us a lawyer's assessment of what the d.c. court of appeals rule ared. >> guest: so what the d.c. court of appeals ruled was that the
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fcc's decision and the restoring internet freedom order was permissible and was, essentially, completely upheld. it's a big win for consumers, it's a big win for innovators, big win for investment in broadband in america. and essentially e what the court said was that the fcc's decision to regulate broadband internet access as an information service, as it largely has been for the last 20 years outside of a two-year period under the title ii order, was permissible. it's consistent with supreme court precedent, and this d.c. circuit was not going to make a determination that the fcc's crassification -- classification was incorrect. because it's within their discretion as the expert agency to classify broadband as an information service or as a telecommunication service. what it did also say was that the commission and the one area where the commission's decision was vacated, which doesn't come up until page 121 of the report. everything up to that point was upheld. that, look, the fcc, you don't
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have the ability to expressly preempt any state action that's inconsistent with the law. however, while some will try to suggest this means states are now free to impose their own laws, i think that's a very significant overreach of what the decision actually said. the decision was very cheerily focused -- clearly focused on the fact that to the extent there's an intrastate service, states do have the authority to try and regulate that service. but the commission made very clear in this order as well as in the 2015 order and many before that, that broadband is an interstate information service. i think it's going to be very difficult for states to actually be able to find a law that is not going to be inconsistent with the federal regime are going forward. so the way we view the case is that this was essentially a win for the fcc completely, which is a win for consumers and it's a win for innovation. >> host: now, who do you represent? >> guest: i represent u.s. telecom, an association of broadband innovators and entrepreneurs that serve every
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single corner of the united states from large national corporations to small companies who serve one or two statements with 10,000 customers or less. they're building networks, they're providing the onramp for the internet to consumers, modern education, telehealth opportunities, creating jobs in their communities. and not only that, but also powering the future of wireless connectivity 5g networks -- >> host: is so company like verizon, at&t, xfinity are all members -- >> guest: not xfinity. comcast, a at&t, also small and medium-sized companies. >> host: gigi zone, i know you have a lot to respond to in his statement, but right after the decision you tweeted out that this wasn't a complete victory for anybody and that the fcc barely won. >> absolutely. so as patrick said, the court upheld most of the fcc's innocent neutrality repeal order. -- innocent neutrality order. it only restored internet
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freedom for broadband providers like patrick's members, but certainly not for consumers and not for innovators. so it did uphold on a very narrow basis -- and there's several places in that decision where the court says you barely crossed the line. but the fact of the matter is that when an agency reviews its statute, the law that governs it, and it makes these complicated technical decisions under a court case called chevron, they get a lot of discretion. and as a patrick said, there is supreme court precedent called brand x that two of the judges were dying to break away from. and, in fact, in their concurrence they just, they said we think the internet has changed and internet access has changed completely and that the supreme court needs to revisit brand x in light of changes how internet access works, but we feel constrained by brand x. is you have the supreme court
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precedent can, you have the usual discretion, so much of the order was upheld. however, and this is why i tweeted what i tweeted, several things in the open internet order, in the repeal order were sent back to the fcc, were remanded back to the fcc for further review. the court said you didn't address the concerns of public stay and what -- safety and what reclassification, in other words, what deregulating broadband once again would do to public safety. and not just the connections between fire departments and police departments, but also between fire departments and police departments and their customers who they need to reach. not customers, but the citizens they protect. number two, you didn't really hash out the problem of deregulation on access to pole attachments; specifically, states' ability to regulate the rates and access to pole attachments. and thirdly, and this is critically important as well,
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you gave the courts at the back of the hand to the argument that reclassification would harm subsidies for poor people. it's a program called lifeline. and basically sent those three things back to the fcc to look at again. and they could have easily, in my opinion, say candidated the order just based on those things, but they didn't. so let me get to the states, because i need to respond to what patrick said. the court was very clear that if an agency lacks authority, it cannot then tell the states that it can't regulate. and what happened when the fcc deregulated broadband, reclassified broadband internet access as an information service rather than telecommunications service and also said that another part of the communications action, section 706, does not provide authority for regulation, it washed its hands, it abdicated its authority, its ability to oversee the broadband market. and the court said, well, you've
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given away your authority, you now cannot tell the states as well that they cannot regulate. now patrick says, and he's correct, that his industry, the fcc could now go state by state and try to use a theory called conflict preemption to overturn, to preempt these state laws. the problem is the court went very, very deeply e into the fcc's arguments for the, for larger preemption, for preempting all the states at once and rejected every single one of them. and the court said the central element is authority, right? it's congressionally-delegated authority. and if you don't have that, you can't preempt. so i'm not going to say the statements will have either an easy -- the states will have either an easy time, it's going
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to be case by case. but it ain't a slam dunk east way. and i -- either way. and i do think states now are going to test the bounds of this preemption authority, and they're going to start to pass laws. and that, to me, argues -- and we'll probably agree on this, or we won't agree on how -- this argues for a federal law. >> guest: we agree with that that. [laughter] we probably agree on the importance of net neutrality as well and that consumers should be able to access the content they want when they want, on the devices they want. net neutrality is a concept, it's a principle. the idea that any consumer should be able to access the cop tent that they want on the networks that they're using when they want. we glee with that. we definitely agree that the best answer for all of this is a national federal, modern framework that provides net neutrality protections that consumers and businesses want. let me respond to a couple of things that the gigi said.
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on the remand issues, while gigi may think that the court should have vacated the order because those issues were not sufficiently addressed according to the judges, the court didn't think they were significant issues that required the sake to have of the order. what the count said, look, on public safety you didn't sufficiently address this issue in the order itself. it didn't say you addressed it wrong, it said you didn't sufficiently address it. similarly with the lifeline point, the broadband -- the impact of the lifeline broadband subsidy on this decision. it didn't say you got it wrong, it said you didn't sufficiently address it. and with respect to pole attachments, again, the same thing. there's things the commission is going to have to address on remand at some point, and i'm pretty confident they're going to address those issues and, you know, that'll be a process where all of us participate in the rulemaking process at the next stage. but certainly, the count did not find those issues to be serious enough to warrant the case from being overturned. with respect to preemption
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issue, i'm sure that folks on gigi's side will look for sentences in that decision that are helpful to them, we will do the same. what was clear was the court said because you are classifying broadband as an information service and you are not pointing to a direct source of authority to which you can then preempt state law, the idea that you can have an express preemption, right, that you the fcc in your order can preempt any state activity is not permitted, right? express preemption. but the court went on to say very clearly that to the extent that any district court finds that what a state has done is in conflict with the federal framework, that the ticket court can, in fact, find that there is con flicks preemption. and i think it's really important that in the discussion it was very clear that the judges were concerned about intrastate. the fcc, you know, going over
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the bounds by expressly preempting any state activity including potentially the regulation of intrastate services. and i was looking at the transcript of the oral argument, and the chief judge on the case, she said let me clarify. you're not saying states can step in and do interstate regulation. that's done. the question is whether states can regulate what's in their wheelhouse, intrastate, right? she said there's no federalism history of one state regulating an entire region of the entire country. the state will have to establish that what they are doing is within their intrastate wheelhouse. >> and the other than arguing for the other side said we're talking about things like disclosure requirements, unfair business practice regulations. look, even restoring the internet freedom order said that states can continue to use their general consumer protection authority. that's never been an issue under the title ii or restoring internet freedom order. the issue is when a state like california attempts to impose
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common carrier regulation on what is now an interstate information service as upheld by this court, i think that's going to be a real difficult task for them to convince a federal district court that what they're doing, you know, regulating an interstate regulation service is not in conflict with the -- >> guest: patrick can keep calling it an interstate service as much as he'd like, but the fact of the matter is it's largely intrastate. that last mile that his members provide actually is in state. so i could just as easily keep saying it's an intrastate service, that states do have the jurisdiction over. but another thing that the court pointed out that i think is really important, and this is true of both telephony and broadband, is that the communications act talks about both the federal government and the state governments having joint jurisdiction, right? so section 706 that the provision that the fcc decided was not a source of authority does have a long list of areas
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where the federal government and the state government are supposed to actually work together. similar with title ii and telephony. so these areas of communications access have always been a hybrid. so, again, this is all to say a court will look at these cases case by case, and i certainly hope that path rig's members will -- patrick's members will focus on getting a strong open internet net neutrality bill passed through congress. there's actually one sitting right in the senate right now, than focusing on going state by state. but if i could make two other points. point one is while, again, getting back to the chevron deference, this deference that agencies have, it's a trouble-edged sword. double-edged sword. because if the fcc changes in 2021, they will essentially have a road map to go right back to title ii if they wanted,ed, to l right? i say to people, and i've experienced being a former litigator, you live by chef to ron, you die by chevron. >> host: could you briefly
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explain chevron and brand x? >> guest: so the chevron case has nothing to do with telecommunications, okay? it actually has to do with environmental regulations, and it says when you look at the way an agency interprets its what they call organic statute -- in this case the communications act -- if the plain language of the law is clear, then that answers the question, right? if they're going against the plain language of the law, then the they get reversed. if they're going with with the plain language of the law, then they get upheld. however, as some would argue is the case here which certainly the court said is the case here, the language of the communications act is ambiguous, the court looks to see whether, what the agency did was arbitrary and capricious, okay? or unreasonable or, you know, doesn't what i call wacky, right? so that's a very, very broad standard of discretion. so if the law's not clear, the agency gets a lot of rope to
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make a decision, right? it's almost like a coin flip. they have to really be either not addressing an issue like they did with public safety and lifeline, or be so way out there as far as the evidence on the record -- although not match their decisions to the record. those are cases where the fcc, where the counts will reverse. but it doesn't happen very often, although it's happened to this fcc more than one might think. so that's chevron. >> host: do you agree with that interpretation of chevron? >> guest: yes. and that's why in this particular instance the court said what you have done here is reasonable, just -- and that's her point about the regulatory ping-pong that goes on when you have senate deference to the expert agency, which is why i think we both agree that it would be much better if we didn't have this ambiguity because there was a modern federal statute. now, we may disagree on the language of that statute, but i think we actually have more. in common --
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>> host: and, gigi, i apologize for interrupting. >> guest: yeah. i do want to make a point about the difference, because i think it's critical. but let me get to what brand x. to brand x actually was a case in the telecommunications area, and this decided the question of what classification should cable modems serve. so this was back in 2002, very early days of broadband, dsl with the telephone companies, and in this case went all the way up to supreme court, and what the supreme court said was the fcc was well within its rights to classify cable modem service as an information service because at the time these services included web hosting, they included e-mail, they included and still do include in some circumstances dns, domain name service, and caching. it was functionally all these
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information services were all part of a bundle that turned -- antonin scalia, justice scalia, thought was a telecommunications service into an information service and that the law was vague and upheld the fcc. and this was mainly what both fcc in its net neutrality repeal order and the court relied upon in upholding a lot of what the fcc did. let me talk a little bit about -- >> guest: the point that gigi made, and i do think this is important because as you can probably tell from our discussion, the big issue here is going to be the states, right? we'll see what happens in terms of whether either side appeals the classification, the major holding in the case, but where the true ambiguity lies is what the decision truly means for state authority going forward. and i think it's important to note that the one thing that perhaps both the 2015 title ii order and the restoring internet freedom order both agreed on was
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that states were preempted. so when gigi says that most of broadband internet access is intrastate because it's the last mile, let me tell you what the title ii order said about that. it said we reaffirm the commission's long job standing -- longstanding conclusion that the internet's inherently global open architecture enables edge providers to distribute content to a multitude of jurisdictional points, extremely difficult if not impossible when services involve the internet. therefore, this is the 2015 title ii order, we announce our firm attention to exercise our preemption authority on broadband services that are inconsistent with the carefully tailored regulatory scheme in this order. they agreed when the federal government was making a decision on an inherently interstate service, whether it's title i or title ii, it's an interstate service, the statements are preempted when what they are
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trying to do is inconsistent with the federal policy. so that, you know, that's sort of why my e general view is -- and gigi's right, this is up to the courts, not me. again, i'd be happy to make a decision right now, but i can't. that. [laughter] so it is going to be up to courts. but i think there's pretty strong press tent that makes -- precedent that makes clear at the state level it's going to be a high hurdle. >> guest: i disagree. and, you know, whatever we said in 2015, the states will, trust me, when i go and speak to, you know, the state the groups of state regulators and local regulators, they get really, really angry at what we said in 2015, and they will argue, again, these preemption cases are going to be extremely fact-intensive. i was at a meeting with a bunch of state ags, and they really warned us it's hard to draw a conclusion about what's going to happen in these cases because they're so fact-intensive. the only thing i will repeat again is that -- and it's
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possible that, you know, patrick and his allies will find, you know, will scour the communications act for provisions that give them some authority to claim conflict preemption. but the arguments the fcc made in front of the court were basically batted down one by one. but this is all to say i'm not going to say it's going to be easy or difficult, it's going to be fact-intensive, but i don't think that patrick's argument is going to win the day with the states. they're going to move forward. there's already an excellent bill, a california-like bill pending in new york, there are some other bills, and they will move forward. and we will see, but it would be actually really nice if we could have a federal law and where patrick and i -- i hate to beat a dead horse, but where patrick and i disagree and which i think, and i think this is the most important part of net neutrality, is the authority part, right? it's whether there's, the fcc will be able to oversee the
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broadband market. it's interesting, one of the places where the court told the fcc you barely, were barely not arbitrary and capricious were its argument that antitrust law and the ftc can protect consumers. and what the court said was you really, you kind of, you know, you kind of laid it out there that those tools are available, but you didn't actually talk specifically about how they would protect consumers from blocking, throttling, so on and so forth. i don't believe the antitrust laws or the ftc ared -- are adequate. and that's where the fight's going to be in a federal bill. does the fcc get to oversee the market, or are they left out of it? because if they're left out of it, they're not going to get any of the consumer groups that i work with supporting, and they're not going to get any democrats supporting. they may not get some republicans. >> host: is there any evidence of throttling?
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>> guest: so, no. i mean, this has continued to be a hypothetical concern that, you know, when the restoring internet freedom order was first proposed and then adopted, we heard this is the end of the internet as we know it. literally, headlines across, you know, cnn and other publications. the internet is over, essentially, right? gigi was on your show a week before the order was voted, and she said isps will start charging online providers for faster, smarter, better quality of services, what i call fast lanes. it will happen. it hasn't happened. and now there's this continuing theory, well, that's because you guys are on your best behavior because the court hasn't ruled yet, and once you actually get the authority as the d.c. circuit has now confirmed as an information service, sort of a smarter, lighter touch regulatory approach, that's when you guys will start doing all the bad stuff. and it's just not true. it's not going to happen. whether there's a title ii order or restoring internet freedom order, i'm certain that gigi
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will be watching what the isps do -- [laughter] i'm sure the groups that she's working whether continue to watch what the isps do. and let me go back the what the restoring internet freedom order did and what gigi takes issue with. what it said was we think the better approach to insuring net neutrality is to have a smarter, more hands-off, market-driven approach to the internet. and as i started this conversation, net neutrality is not a law. net neutrality is not a regulation. you have some headlines after the decision, net neutrality overturned or upheld. no. net neutrality is the principle, the idea that we can all access the content we want when we want on the devices we want. we committee that's extremely important to our companies, consumers, everybody. the only debate really is how do you insure that. this fcc said, you know what? we think that investment will go up. we think that there's a benefit to investors and innovators to regulatory certainty, we think
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that market forces are important and will insure that the market or is properly functioning. and on top of all that, we will make sure that there are consumer protections, we're just not going to do it with heavy-handed utility-style regulation where the fcc is deciding what's okay and what's not okay which is what it was like under the title ii order, and that had negative impacts what the fcc said was, look, states have a role to enforce their general consumer protection acts, laws. we are going to require every internet service provider to very clearly disclose what their practices are with respect to blocking or throttling, for example, and to the extent they don't live up to those promises -- to the extent they don't disclose their practices, the fcc has the ability to enforce. to the extent they don't live up to them, the ftc, the cop on the beat for consumer pexes for -- protections for everybody, whether it's a company like google, facebook or twitter are under the same jurisdiction as at&t, verizon and other internet
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service proid veers. it's the same -- providers. and to the extent that there's an anticompetitive action, to the extent that one company purposefully blocking access to content to another cup, that's why we have antitrust laws. and we can disagree on how effective they may or may not be, but it is, in fact, a regulatory approach to insure net neutrality. with all of that said, while we're very supportiveover on the restoring internet freedom, we'd love to have a bill that says no flocking, no throttling -- no blocking, no throttling. >> caller: number one, the answer actually is, yes. in fact, there's been two recent studies that show that mobile carrier withs were throttling video providers like netflix and hulu and others. and there are other examples from years past. i won't get into that, okay? i will also note though in the two years that the title ii order was in place, there were 47,000 complaints filed by consumers.
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47,000 which, by the way, the fcc refused to consider. even if you took 1% of those as legitimate, that is an awful lot, that's 470 complaints. so, you know, the fcc didn't look at all these complaints to determine whether there were violations there, so something's going on. something's in the water. but again, it get away from the core point. who is going to have oversight over the industry. and the problem with the fcc is their authority goes to unfair or deceptive practices. and they really, they kind of -- they interpret that as unfair, undeceptive. so in other words, if your broadband provider tells you i'm going to block, i'm going to throttle, i'm going to have fast lanes, there's nothing the ftc can do about it. if your broadband provider engages in price gouging or engages in fraudulent billing, the ftc is not going to address -- that's why you need the fcc which has the
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technological, the legal expertise. that's why they need to have authority. and patrick, i think rightly, points out antitrust laws only go to anticompetitive activity. it doesn't go to, for example, the blocking of speech or other consumer issues. so in this fight really is not about whether companies will block, throttle or engage in fast lanes which, again, there has been evidence. it may not be reams and reams of such, but there is good reason to have prophylactic rules, and that's another important thing. the ftc does not have the power under its law to make rules. and rules moderate bad behavior, and they let consumers know what their rights are. so any bill -- and we can talk about, we can have a debate over what the bounds of that authority ought to be, but the notion that the agency that for 80 years has been tasked with
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overseeing competition and consumer protection and access to communications networks of all kinds should all of a sudden not be involved when with it comes to the most important communications network of our lifetime doesn't make any sense to me. >> host: so final question in our final minute, should congress get involved to clear up the chevron issues? >> guest: it's not necessarily to clear up the chevron issues -- >> host: more clear. >> guest: absolutely. there is a bill that was passed by the house of representatives that's sitting in the senate. unfortunately, senate majority leader mcconnell will not put it on the floor. it's called the save the internet act. it reinstates the 2015 open internet order, but better off for patrick's members it puts in place the so-called forbearance. so the parts of title ii we decided not to apply to broadband service, it puts them in place forever. so i actually think patrick's members are better off
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supporting the save the internet act and not taking a chance of having a different fcc under a different administration bringing back the 2015 open internet order where the forbearance is not permanent and perhaps even going further, perhaps not even forbearing from some of the things that they really don't want to see applied to them. of. >> host: would you like to see congress step in and clear this up? >> guest: i would like to see congress pass a modern, smart policy with respect to net neutrality, absolutely. it is not in anyone's interests to have to go back and forth between fcc depending on elections, certainly not in anybody's interest to have to fight this out in every single state. however, what i do not think would be a good solution is to have congress simply choose one fcc decision over the other, and that's what the save the internet act does. >> host: final question, who brings this to the supreme court? the fcc or interest groups? >> guest: gigi's closer to the interest groups and answer that for their side. i don't know, is the short answer.
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you know, everybody's sort of review what the best course of action is. >> host: final word. >> guest: so, first, we could go back to the court itself, right? to d.c. circuit. we could east go back to the actual panel, which is unlikely, or go back to the d.c. circuit and then go directly to the supreme court. i think we're still reviewing it. i mean, it's only been a week, so we're still figuring out what's going to be next. >> host: georgetown law institute of core technology, gigi sohn, and patrick halley of u.s. telecom, thank you both for being on "the communicators." this "communicators" and all other episodes are available as podcasts. >> and now it's booktv in prime time. we'll kick off the evening with a conversation on the rise and impact of whistleblowers in the united states. then, former republican congressman bob barr looks back
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at the clinton impeachment process. and at 11 p.m. eastern, an author discussion about warfare in the 21st century from the recent norwich university military writers' symposium. that's tonight's prime time lineup. now, here's a look at the impact of whistleblowers from a recent program at the cato institute in washington d.c. >> and welcome to the cato institute. those of you who are here in the hayek auditorium at our facility in downtown washington and those of you who are watching this webcast, i'm so glad that you're able to join us today for what will undoubtedly be an extremely timely book forum and event discussing what has obviously been in the news pretty

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