A word on Brand X, the term’s ugly duckling, whose limelight has been stolen by its more glamorous cousin, Grokster.
For those who don’t read reports of the Federal Communications Commission with rapt attention, Brand X is narrowly about the FCC’s rules for cable modems, but broadly about the future of broadband and the American Internet. The basic question posed by the case was whether the FCC had the authority to disregard what looked like a clear statutory command to treat Internet cable modems like a phone service. For broadband operators, being a “telecommunications service,” in the words of the 1996 Telecom Act, basically means having a duty to let any ISP sell its services to your customers.
To summarize, the court decided Monday to let the FCC do what it wants, and that means deregulation. The FCC has been trying to deregulate broadband for almost a half-decade now, while it watches countries like Korea, Japan, and even Canada leapfrog the United States in broadband usage. The court today in essence says, “OK, FCC, we don’t really know a thing about broadband, so let’s see if you can get us out of this mess.” Carpe diem, or something like that.
Two things were sacrificed along the way to this result. First, the companies that are called “independent ISPs” in the industry and “AOL” by everyone else, are left without much of a future. Already not the world’s healthiest, these companies needed tighter rules to have a chance to sell ISP services directly to broadband consumers. Now the court has effectively cut their lifeline.
The second sacrifice is the coherence of administrative law. You might retort that administrative law was already incoherent. But after Brand X I think there may not be anyone who fully understands the doctrine of deference to agencies that the court calls the Chevron/Mead doctrine. The general idea is that Mead is supposed to determine, based on criteria no one understands, when an agency’s decisions gets more (Chevron) or less (Skidmore) deference. Got that? Neither does the Supreme Court. Justice Clarence Thomas’ opinion in Brand X just skips Mead altogether and also manages somehow to evade the textual commands of the 1996 Telecom Act. And just to show you how bad things are, Breyer’s concurrence accuses Scalia of misstating, in dissent, the meaning of Mead, from which Scalia also dissented. It would be funny if it wasn’t so confusing. Thank goodness I don’t teach administrative law.
In his dissent, Justice Scalia reprises a favorite role—the principled textualist standing firm against consequence. His performance might be more convincing if he hadn’t wholly abandoned that part when faced a few years ago with President Clinton’s efforts to call tobacco a “drug delivery device.” Both that case and Brand X were “plain language” cases, but only this time around does Scalia say that the plain language really does end the case.
Politically speaking, Brand X will have various consequences. With some of the skirmishing with independent ISPs out of the way, U.S. broadband deployment may actually speed up. Meanwhile, the decision will also increase the pressure on Capitol Hill and perhaps at the FCC for what are called “network neutrality” rules. Those are consumer-protections rules designed to prevent cable and DSL providers from blocking their customers from using whatever services or attachments they want—think Voice over IP or Wi-Fi. Previously, one hope was that independent ISPs might provide a check on potential abuses by broadband operators by offering an alternative to dissatisfied customers. But with the deregulation of cable modems confirmed by Brand X, that’s no longer an option, which makes network neutrality rules look more important.
But put all that aside. The upshot of Monday’s decision is that the court has given the FCC the authority, whether or not it was what Congress intended, to try to get the United States out of its embarrassing broadband slump. Whether the FCC manages to succeed is another question altogether.
