Background

The U.S. Court of Appeals for the Sixth Circuit recently issued a landmark decision regarding the Federal Communications Commission’s (FCC) “Safeguarding and Securing the Open Internet” Order (2024) and held that broadband internet access service (BIAS) is an information service under Title II of the Communications Act.

The FCC Order aimed to reinstate net neutrality by reclassifying broadband internet access service (BIAS) as a telecommunications service under Title II of the Communications Act (the Act), which would enable the FCC to regulate BIAS providers as common carriers. The Sixth Circuit, however, overturned the FCC’s Order using the “best reading of the statute” and “traditional tools of statutory construction” under Loper Bright, classifying BIAS as an information service under the Act, once and for all.

Definitions

The court decided whether BIAS should be interpreted as a “telecommunications service” under § 153(53) or an “information service” under § 153(24) of the Communications Act.

Section 153(53):

The term “telecommunications service” means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

Section 153(24):

The term “information service” means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

Issue

Under the Telecommunications Act of 1996, is BIAS a “telecommunications service” subject to common-carrier regulations, or an “information service,” which would exclude BIAS from such regulation?

Arguments

Precedent

The court cites to the FCC’s own inconsistent findings of whether the internet is an information service. “For almost 20 years after Congress enacted the Telecommunications Act, the FCC’s position was that companies providing access to the Internet offered information—not telecommunications—services, and thus, Title II’s common-carrier regulations did not apply.” The Supreme Court applied the Chevron framrwork to uphold the FCC’s determination that cable companies providing cable modem service, a precursor to the services that Broaband Internet Access Providers provide, offered only an information service. However, “[c]hanges in the FCC’s compisition, with a new administration, upset the FCC’s then-consistent interpretation.” Since then, the D.C. Circuit upheld under Chevron the FCC’s 2015 interpretation that BIAS is a telecommunications service and the FCC’s 2018 interpretation that BIAS is an information service. Notably, the deciding court is now the Sixth Circuit, which writes, “Applying Loper Bright means we can end the FCC’s vacillations.”

Function of Broadband Internet Service Providers

The court asks whether BIAS providers are “merely a conduit for data transmission (a so-called “dumb pipe”) and thus offer consumers a telecommunications service . . .” or whether they “offer consumers the capability to acquire, store, and utilize data—and thus offer consumers an information service.”

No stare decisis under Brand X

The court reasons that because the Brand X decision (where the Supreme Court upheld an FCC interpretation under Chevron that cable companies that owned cable lines used to provide broadband offered only an information service) is 22 years old and involves separate FCC actions, the court is not bound by stare decisis.

Offering the capability of manipulating information

Turning to the merits of the case, the court explains that BIAS providers, at the least, offer the capability to manipulate information as described in § 153(24). Specifically, BIAS providers allow users to “retrieve” information stored elsewhere.

All parties agree to the classification of edge providers (i.e., Netflix, Amazon, Facebook, Google, etc.) as an information service. These providers “generate” and “make available” information to others, “acquire” and “retrieve” information from sources such as websites, “store” information in the cloud, and more. “Yet, by connecting consumers to edge providers’ information, Broadband Internet Service Providers plainly provide a user with the “capability” to, at minimum, “retrieve” third-party content.” The court argues that the FCC leaves out the reading of “offering of capability” in its reading of § 153(24).

Distinguishing telephone services

The FCC argues that if BIAS providers are information services because they facilitate access to third-party content, then so too would telephone services. The court distinguishes telephone services by the information that is accessed. “Crucially, the telephone service merely transmits that which a speaker creates; it does not access information.” Information services reduce knowledge to a tangible medium, but computers themselves do not generate ideas or thoughts. The court says the capability of retrieving information “does not refer to a phone call with a friend; it refers to an interaction with data stored on a computer.”

Takeaways

1. End of Regulatory Oscillation: The court’s reliance on statutory language over administrative interpretation may bring stability to net neutrality debates, limiting regulatory flip-flopping across administrations.
2. Judicial Oversight Post-Chevron: By applying independent statutory analysis, the court emphasized a stricter review of agency decisions, marking a significant shift in judicial deference to regulatory agencies.
3. Implications for Internet Regulation: The decision underscores the limited scope of FCC authority under existing statutes, suggesting that significant regulatory changes may require explicit congressional action.
4. Mobile Broadband Classification: The court’s rejection of the FCC’s mobile broadband classification as a “commercial mobile service” further restricts the scope of Title II regulation.
5. Legislative Clarity Needed: This ruling highlights the need for Congress to modernize internet-related laws to address evolving technology and market dynamics.

The Sixth Circuit’s decision is a critical moment in the ongoing debate over net neutrality, signaling the judiciary’s intent to rein in expansive regulatory interpretations. Future discussions will likely pivot toward legislative reforms to establish clear guidelines for internet governance.