Decision on internet regulation. Also known as Net Neutrality. Joining us to discuss this issue, gigi sohn who served as Senior Advisor to fcc chair tom wheeler for several years, and is going with the Georgetown Law Institute for technology. And Patrick Holly was Senior Vice President at u. S. Telecom, a trade association here in washington, d. C. Before we put on our advocates at, give us a lawyers assessment of what the d. C. Court of appeals ruled. Guest what the d. C. Court of appeals ruled was that the fcc decision and the restoring of the net freedom order was permissible and essentially completely upheld. Its a big win for consumers, a big win for innovators, big win for investment in broadband in america. Essentially what the court said was that the fcc decision to regulate broadband and Internet Access as an Information Service as a module has been for the last 20 years outside of a two years under the title ii order was permissible. Its consistent with Supreme Court precedent and this d. C. Circuit was not going to make a determination that the fccs classification was incorrect because its within their discretion as an Expert Agency declassify broadband as an Information Service or as a Telecommunications Service. Was it also did say was the commission, and the one area where the commissions decision was vacated, which doesnt come up until page 121 of the report, everything to the point was upheld. You dont have the ability to express agreement any state action that is inconsistent with the law. However, while some will try to suggest this mean states are free to go and impose her own laws, thats a very significant overreach of what the decision axis the that decision was very focused on the fact to the extent theres an interstate service, states have the authority to try to regulate that service but the commission made very clear in this order as well in the 2015 order many before that broadband is an interstate service. It will be difficult for states to be able to find a law that is not going to be inconsistent with the federal regime going forward. The way we view the case is that this was essentially a win for the fcc, completely, which is a win for consumers and a win for innovation. Host who do represent . Guest u. S. Telecom. U. S. Telecom is an association of broadband innovators and entrepreneurs that serve every single corner of the United States from Large National corporation to Small Companies who served one or two states with 10,000 customers or less. They are building networks, providing the on ramp to the internet for consumers, modern education, telehealth opportunities, creating jobs. Not only that but powering the future of wires connectivity and 5g networks. Host Companies Like verizon, at t, xfinity are all members . Guest at t, verizon but also Small Companies like big bend Telephone Companies and mediumsized companies. Host gigi sohn, i know you will a lot responded to in a statement right after the decision you tweeted out that this wasnt a complete victory for anybody and that the fcc barely one. Absolutely. As patrick said, the court upheld most of the fccs Net Neutrality review order. I wont call it restoring internet frequently because it only restored in that freedom for broadband providers like patricks members but not for consumers and not for innovators. It did uphold on a very narrow basis and are several places in that decision where the court says you barely crossed the line. But the fact of the matter is that when it Agency Reviews its gadget, the law that governs it, and makes these comp would get a technical decisions, and are a court case called chevron they get a lot of discussion. As patrick said, theres a Supreme Court precedent called brand x that two of the judges were dying to break away from added back into concurrence they said we think the internet has changed and its change completely and the Supreme Court needs to revisit brand x invited changes in how Internet Access works of we feel constrained by brand x. You had the Supreme Court president , the usual discretion, so much of the order was upheld. However, 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 for further review. The court said you didnt address the concerns of Public Safety. And what reclassification. In other words, what deregulating broadband once again with you to Public Safety. And not just a connection between Fire Departments and Police Departments but also between Fire Departments and Police Departments and their customers who they need to reach the customers but the citizens they protect. Number two, you did not really hash out the problem of deregulation on access to pull attachment, specifically states ability to regulate the rates at access to pull attachment. And thirdly and this is critically important as well, you gave the court said the back of the hand to the argument that reclassification without subsidies for poor people. Its program called lifeline, and basically said those three things back to the fcc to look at again. They could have easily vacated the order just just based on those things that they didnt. Let me get to the states because i need to respond to what patrick said. The court was very clear that if it agency lacks authority it cannot then tell the states that it cant regulate. What happened when the fcc deregulated broadband, reclassified Internet Access as an Information Service rather than Telecommunications Service, and also set another part of the Communications Act, section 706 is not provided authority for regulation, it washed its hands, it abdicated its authority, its ability to oversee the broadband market. The court said you have given away or authority, you now cannot tell the states as well that they cannot regulate. Patrick says, and hes correct, that his industry, the fcc could now go statebystate and tried to use a theory called the conflict of preemption to overturn the state. The problem is the court went very, very deeply into the fccs arguments for larger preemption for preempting all the states at once and rejected every single one of them. The court said the sine qua non of the ability to present, so the central element is authority, is congressionally delegated authority, and if you dont have that you cant preempt. Im not going to say the states 11 easy time or, it will be casebycase but it aint a slam dunk it away. And did you think courts, states that when a test the balance of this preemption authority, and theyre going to start to pass laws, and that to me argues, and we will probably agree on this, although we will not agree on how, this argues for a federal law. I completely agree with that. We probably agree on the boards of Net Neutrality as well and consumer should access the content when they want on the want on the devices want. This is not the debate whether Net Neutrality is a good thing. Net neutrality is a concept, principal, the idea any consumer should be able to access the content they want of the networks they are using when they want. We agree. We agree 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. On the remanned issues, while she may think the court should have vacated the order because those issues were not sufficiently addressed according to the judges, the court didnt think there are significant issues that required a vacancy. What the courts it is will come on Public Safety you didnt sufficiently addressed this issue in the order itself or it didnt say you addressed it wrong. It said you didnt sufficiently address it. Similarly with the lifeline. Mac, the broadband, the impact of a lifelong broadband subsidy on this decision. It didnt say got it wrong. It said you didnt sufficiently addresses. With respect to pole attachment, the same thing. Theres things the commission will not have to dress. Im pretty confident theyll be able to address those issues and that will be a process where all of us participate in will making process at the next age. Certainly the court did not find those issues to be serious enough to warrant the case from being overturned. With respect to the preemption issue, im sure folks on her side look for sentences in the decision that are helpful to them. We would 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 great source of authority to which you can then preempt state law, the idea you can have an express preemption, that you the fcc in your order can preempt any state activity is not permitted. Express preemption. But the court went on to say very clearly that to the extent that any District Court finds that what the state has done is in conflict with the federal framework, that the District Court can find there is conflict preemption its important in the discussion it was very clear the judges were concerned about intrastate, the fcc going over the bounds by expressly preempting any state activity including potentially the regulation of intrastate services. I was looking at the transcript of the oral argument. The chief judge on the case said let me clarify. Youre not sink states can step in and get interested regulation when the commission the camps. The question is whether states can regulate within a wheelhouse, interesting. She said theres no federal history. The states of established what theyre doing is within their intrastate wheelhouse. The attorney arguing for the other side said were talking things like disclosure requirements, unfair business practice regulations. Look, even the restoring Internet Freedom order said that states can continue to use the general Consumer Protection authority. That has never been an issue. The issue is when a state like california attempts to compose common carrier regulations on what is now an interstate information serve served as uphy this court, thats going to be a difficult task for them to convince a federal District Court that what they are doing, regulating and interstate Information Service is not in conflict with the federal policy. Patrick can keep calling Broadband Internet access and intrastate service as much as you would like, but the fact of met is its largely interested. That last mile that his numbers provide actually is instead. I could just as easily keep saying its an intrastate service, the states to have jurisdiction over. Another thing the court pointed out that is really important, and this is true of both telephony and broadband is that the two medications act talks about both the federal government and the State Government having a joint jurisdiction. Section 706, the provision that the fcc decide was not a source of authority, has a long list of age with the federal government and the State Government are supposed to work together. Similar with title ii and telephony. These areas of Communications Access have always been a hybrid. This is all to say a court will look at these cases casebycase and i certainly hope that patricks members will focus on getting a strong open internet Net Neutrality bill passed through congress and theres one sitting right in the senate now than focusing going statebystate. If i could make to make other points. Getting back to the chevron deference essence that agencies have come its a doubleedged sword. Because if the fcc changes in 2021, they will essentially have a roadmap to go right back to title ii if they wanted to. I say to people, and ive expressed being a former litigator, you lit by chevron, you die by chevron. Host could you briefly explain chevron and brand x . The chevron case has nothing to do with telecommunications. It has to do with environmental regulations, and this has when you look at what, the way and agency interprets what they call organic statue come in this case the Communications Act, its a plain language of the law is clear, then that answers the question. If theyre going against the plain language of the law then they get reversed, if theyre going with the plain language of the law, and to get upheld. However, as some would argue is the case here, which the court said is the case here, the language of the Communications Act is ambiguous, then the court looks to see whether what the agency did was arbitrary and capricious. Or unreasonable or, you know, doesnt what i call wacky. Thats a very, very broad standard of discretion. If the law is not clear, the agency gets a lot of rope to make a decision. Its almost like a coin flip. They have to really be either not address an issue like they did with Public Safety and lifeline, or be so wait out there as far as the evidence on the record or not match the decisions to the record, those are cases would fcc, where the courts will reverse. But it doesnt happen very often. It does happen to the sec more than one might think. So that chevron. Host do you agree with that interpretation of chevron . Guest yes. And thats why the courts at what youve done here is reasonable just as a set with sec didnt title ii order in 2015 was reasonable and thats a point about regulatory pingpong that goes on when you significant deference to an Expert Agency which is why we both agreed it would be much better if we didnt have this ambiguity because there was a modern federal statute that we may disagree with the language of that statute should be but we had more in common than people think. Host i apologize for interrupting. I do want to make a point about the difference between patrick and i would be because let me get to what brand x is. Brand x was a case in the telecommunications area. This decided the question of what classification should Cable Modem Service be . This was back in 2002, very early days of broadband, dsl, digital subscriber line with broadband for the Telephone Companies. This case with all the way up to the suprem Supreme Court and whe Supreme Court said was the fcc was well within its rights to classify Cable Modem Service as an Information Service because, at the time the services included web hosting, included email, included dns, or the domain name service, and caching. So they said it was functionally all these Information Services were all part of a bundle that turned, but antonin scalia, Justice Scalia felt was a pure transmission Telecommunications Service into an Information Service of the statute again was they, the law was they can upheld the fcc. This was mainly what both the sec in its Net Neutrality repeal order and the court relied upon in upholding a lot of what the fcc did. Let me talk about guest i do think this is important because as you can probably tell, the big issue is going to be the states. What, well see what happens in terms of either side appeals the classification, the major Central Holding in the case but where the true ambiguity lies is what the decision means for state authority going forward. I think its important to note that the one thing that perhaps both the 2015 title ii order and restoring Internet Freedom porto both agreed on is states were preempted. She says most of Broadband Internet access is interesting because its the last mile. Let me check with the time to order set about that. Its that we reaffirm the longstanding conclusion that broadband is a jurisdictional interested service. The internet is global, open architecture enables providers to subcontinent a multitude of distribution origination points making into interstitial analysis extremely difficult if not impossible. Tailored everywhere the time to order was when the federal government was making a decision on inherently intrastate service whether its title i or title ii its an interactive service, the states are preempted when what theyre trying to