As
unorthodox as it might seem, Senior Circuit Judge Stephen F. Williams dissenting
opinion in a major FCC case offers a likely roadmap on how the FCC will operate
with Trump appointees and a Republican majority. Judge Williams’ extensive opinion in U.S.
Telecom v. FCC, available at: http://pdfserver.amlaw.com/nlj/6-14-16%20DC%20Circuit%20net%20neutrality%20opinion.pdf,
has a flavor remarkably unlike a legal dissent.
At its best, his work identifies real defects in the logic used by the
FCC to reclassify broadband Internet access as a telecommunications
service. Additionally, the Judge raises legitimate
questions about the FCC’s rationales supporting a near total prohibition on
paid prioritization of traffic.
I am not
keen on ex ante regulation and can identify significant consumer benefits in having
the option to receive “better than best efforts” traffic routing. Judge Williams offers considerable evidence
that consumers do not benefit and may be harmed by a prohibition on price and
quality of service discrimination.
At its worst,
the Williams dissent misreads case precedent, misinterprets the statutory duty
of the FCC to apply Title II common carriage regulation and shows a penchant
for economic analysis regardless whether it is appropriate, helpful or
sponsored by a stakeholder.
Additionally, the opinion offers copious sanctimony and snark at a high
level even for dissenting jurists.
Judge
Williams believes the FCC failed to provide stakeholders adequate notice that
the Commission had opted to use a new standard for assessing whether and how to
apply Title II regulation. He chides the
FCC for not conducting a thorough assessment of market power to determine
whether the broadband access marketplace operate competitively. From his perspective, Judge Williams
considers the Title II classification as lawful if and only if the broadband
marketplace lacks competition.
There
should be no dispute that common carriage regulation, established in Title II
of the Communications Act, can apply even if a telecommunications market
segment operates competitively. For
example, Congress ordered the FCC to treat Commercial Mobile Radio Service
operators as common carriers (47 U.S.C. §322) regardless whether the wireless
marketplace is, or will become competitive.
Even as I
do not think the FCC should have imposed the common carrier classification, I
have no doubt the FCC can lawfully make the call. Judge Williams would prevent the FCC from applying
Title II unless the Commission can prove market failure, an extraordinarily
high standard of proof no law requires. Additionally, the Judge would deny the
Commission any deference based on its expertise to interpret and apply
ambiguous statutory language as the Supreme Court established in its Chevron Doctrine.
Judge
Williams appears so enamored with economic analysis, that a failure to showcase
it constitutes reversible error. Nothing
in the Communications Act mandates economic analysis as the primary, “make or
break” analytical tool the FCC must use.
The FCC has to assemble a complete evidentiary record based on facts, an
empirical record, the advocacy documents of stakeholders and the Commission’s assessment
of what would best serve the public interest.
Of course economic analysis can help the FCC meet its statutory duties,
but it does not constitute a sine qua non.
Economic
analysis, perhaps even more so than legal analysis, is rife with pitfalls. Economists do not have to operate with the
discipline and rigor of legal advocates, despite the strategic use of
mathematics. Economists can construct a theory,
convert it into an unimpeachable rule and offer this rule in advocacy documents
for adoption by the FCC.
Much of the
so-called economics used in FCC proceedings by stakeholders is sponsored advocacy. The vast majority of this advocacy attempts
to legitimize and make scientific policy prescriptions that do not pass the
smell test. For example, any and all
mergers promote competition and enhance consumer welfare, but set top box
competition would harm competition and consumers. Economic analysis has a legitimate role at
the FCC, but Judge Williams would elevate its importance at the risk of
bolstering the potential for sponsored research to provide scientific support
for results-driven decision making. In
the words of a former Republican President, the FCC may be headed for a full
embrace of Voodoo Economics if it provides the foundation for a desired policy
outcome. Judge Williams appears keen on
replacing an “economics-free” FCC to one obsessed with anything masquerading as
economics.
In the
snark and sanctimoniousness department, I sense Judge Williams takes great
pride in analogizing the FCC’s Open Internet Order to a bicyclist shifting from
sidewalk to roadway travel routes. He
chides the FCC for applying common carriage regulation and then abandoning most
of the burdensome elements. From my
perspective the FCC evidences flexibility and a keen interest in calibrating
the reach and scope of regulation to what tools are needed.
I fear
Judge Williams dissent foreshadows an FCC willing to misinterpret case law and statutory
mandates to achieve a desired outcome. I
worry that an infatuation with economics will legitimize bogus rationales that
the FCC will embrace hook, line and sinker.
Who needs a maverick wireless carrier like TMobile when economists prove
that any and all markets work just fine with 3 competitors?
Lastly, I have concerns that FCC decision makers will overplay their hand. I have seen ample and unjustified arrogance, hubris and political intrigue at the FCC. It looks like the new management will continue—if not expand—the trend.
Lastly, I have concerns that FCC decision makers will overplay their hand. I have seen ample and unjustified arrogance, hubris and political intrigue at the FCC. It looks like the new management will continue—if not expand—the trend.
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