Joining us to discuss this issue gigi sohn, former fcc chair tom wheelers adviser currently with the Georgetown Law Institute for technology. And the Senior Vice President at u. S. Telecom, trade Association Patrick halley washington, d. C. Give us of lawyers assessment of what the d. C. Court of appeals ruled. The d. C. Court of appeals ruled that the secs decision was permissible in the industry storing Internet Freedom order. And it was completely upheld. As a big win for consumers and innovators and a big win for broadband in america. Essentially, with the court said to that the secs decision regulate Broadband Internet access as an Information Service as it largely has been for the last 20 years outside of a twoyear. Under the title to order, was permissible. It is consistent with Supreme Court precedent and this d. C. Circuit judge going to make a determination that the fccs classification was incorrect. Because it is within their discretion as the Expert Agency to classify broadband as an Information Service or as a telik me to case and service. What it did also say was that the commission, and the one area where the commissions decision was vacated, which does not come up impelled does not come up until page 121 of the report. Everything till that point was upheld. The sec, you do not have the ability to expressly preempt any state action that is inconsistent with the law. However, while some will try to suggest this means states are now free to go and impose their own laws, i think that is a very significant overreach of what the decision actually said. The decision was clearly focused on the fact that to the extent there is an intrastate service, states do have the authorities to try to regulate that service. But the commission made very clear in this sort as well as the 2015 order and then before that that broadband is an interstate service. I think will be done go for states to be able to actually 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, which is in win for consumers and for innovation. Host hood you represent. Mr. Halley i represent u. S. Telecom, an association of broadband innovators that serves every corner of the United States from Large National corporations to Small Companies which serve one or two states with 10,000 customers or less. They are Building Networks and providing the onramp to the internet for consumers, modern education, telehealth opportunities, creating jobs in their communities. Not only that but also powering the future of wireless conductivity and 5g networks. Verizon,companies like at t, xfinity are all members. Verizon, also t, Small Companies like Big Bend Telephone Company and Small Companies. I know you have a lot to respond to it right after the decision you tweeted out this was not a complete victory for anybody and that the fcc fairly one. Barely one. Ms. Sohn absolutely. As patrick said, the court upheld most of the secs Net Neutrality repeal order. Internet freedom for broadband providers but not for consumers and not for innovators. It did uphold on a very narrow basis, and there are several places in that decision where the court says, you barely crossed the line but that matter the fact of the matter is that when an Agency Reviews its statutes, the law that governs it, and makes these complicated technical decisions, under court case called chevron, they get a lot of discretion. As patrick said, there is Supreme Court precedent called brand x that two of the judges were dying to break away from. And in their concurrence, they said, we think the internet has changed. And Internet Access is changed completely and that the spring court needs to revisit brand x in light of changes in how Internet Access works. The Supreme Court. But we feel constrained by brand x. You had the spring Court Precedent and usual discretion. Much of the order was upheld. However, and this is why 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 did not address the concerns of Public Safety. And the reclass occasion. In other words, what do regular in broadband once again what do to Public Safety. And not just the connections between far departments and Police Departments, but also between part of pardons and police to province and their customers. Fire departments and Police Departments and their customers, the citizens they protect. Number two, you do not really cash out the problem hash out the problem of direct elation on access to paul attachment. Totwo hole attachment pole attachment. Two states ability to regulate it. You gave the back of the hand to the argument that sups that the program would harm subsidies for poor people, the program called lifeline. They sent those three things back to the fcc to look at again. They couldve easily in my opinion vacated the order based on those things but they did not. Let me get to the states because i need to respond to a patrick said. The court was very clear. That if an agency lacks authority, it cannot then tell the states that it cannot regulate. What happens when the sec deregulated broadband, reclassified Broadband Internet access as an Information Service rather than a telecommute case in service, and also said that another part of the commute occasions act, section 706, does not provide authority for regulation, it washed its hands, it abdicated its Authority Come a its ability to oversee the broadband market. The court said well, you have given away your authority. You now cannot tell the states as well that they cannot regulate. Patrick says and he is correct, that his industry, the fcc, could now go statebystate and try to use a theory called conflict preemption. To preempt state laws. The problem is, the court went very, very deeply into the secs arguments the fccs arguments for larger preemption, for printing all the states at once, and rejected everything a one of them peered the court said the sink and on the ability isthe sine qua non congressionally delegated authority. And if you do not have that you cannot do it. Im not gonna say that states will have an easy time, it will be casebycase. And it is not a slamdunk either way. I think states now will test the bounds of this preemption authority. And theyre going to start to pass laws. 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 on that. We probably agree on the importance of Net Neutrality as well. This is not a debate on whether Net Neutrality is a good thing. Concept,ality is a principle and it is the idea that any consumers to be able to access the content they want on the networks that they are using when they wanted. We agree with that. We agree that the best answer for all this is a National Federal modern framework that provides Net Neutrality protections that consumers and businesses want. Let me respond to couple things gigi said. She may think the Court Vacated the order that should have vacated the order because the issues. Warranted it. The court and nothing so peered the courts in a Public Safety, you do not sufficient address this issue. In the order itself. It did not say you dressed it wrong. It said you do not sufficiently address it. Similarly with the lifeline point, the broadband and impact of lifeline broadband subsidy on this decision. Do not say got it wrong, but you do not sufficiently address it. And with respect to pole attachments, the same thing. There are things that commission will have to address on remand peered im confident they will be able to address those issues. That will be a process where all of us participate in rulemaking at the next stage. The court did not find those issues to be serious enough to warrant the case from being overturned. With respect to the preoption issue. Preemption issue. Gigis sides on will look for sentences helpful to them and we will do the same. What was clear is the court said because youre classifying broadbent 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, that you the fcc in your order can prance any state activity, is not permitted. Express preemption. But the court went on to say 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 District Court can find there is conflict preoption. I think is important that 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, potential, the regulation of intrastate services. Looking at the transcript of the oral argument. The chief judge on the case said let me clarify, youre not saying states can step in and do intrastate regulation when the commission to camps from interstate, that is done. The question is whether the state can reg late what is in their wheelhouse, intrastate, right . There is no federal history the history of one state reglet in the region of a country. The states will have to establish what they are doing is in their state wheelhouse. We are talking about things like disclosure requirements, unfair business practice relations. Even the restoring Internet Freedom order said, states can continue to use their general Consumer Protection authority. That has never been an issue. Under the title to order or the restoring Internet Freedom order. The issue is, when a state like california attempt to impose common carrier regulation, on what is now an intrastate Information Service, as upheld by this court, i think thats going to be a difficult task for them to convince a federal District Court that what theyre doing, regular leading and intrastate Information Service, is not in conflict with the federal policy. Patrick can keep calling Broadband Access and intrastate service. The fact of the matter is largely interest intrastate. The last mile is instate. I could just as easily keep saying it is and intrastate service that states do have the end dressed diction over. The court also pointed out was that he gets important, and this is true of both telephony and broadband, is that the Communications Act talks about both of the federal government and the State Government having a joint jurisdiction. Provision 706, the that the sec decided was not a source of authority, does have a long list of areas where the federal government and the State Government are supposed to actually work together. Andlar with title to telephony. These areas of Communications Access have always been a hybrid. Again, this is all to say the court will look at these cases a course, these cases casebycase. And i hope patricks members will focus on getting a strong open internet Net Neutrality bill passed through congress. And there is one city in the senate right now. Rather than focusing on going statebystate. But i would make two other points. 1 is while im again getting back to the chevron deference, that agencies have. It is a doubleedged sword. Because of the fcc changes in they would have a roadmap to go back to title ii if they wanted to. I say to people, with experience being a former let her get her, you live by chevron and you die by chevron. Being a former litigator. Has nothing toe do italic medications. It has to do with the bimetal regulations with environmental regulations. It says that if you look at the way an agency interprets its organic statute, in this case the Communications Act. If the plane lang which of the laws clear, that answers the question if the plain language of the law is clear that answers the question. However, as some would argue is the case here and the court said is the case here, the lang which of the Communications Act is an big u. S. If the language of the Committee Case and zach is a big u. S. Than the court looks to see if the what the agency did was arbitrary and capricious or unreasonable or what i call wacky. That is a broad standard of discretion. If the law is not clear, the agency gets a lot of rope to make a decision. Edison was like a coin flip. Have to really be either not address an issue as they did with Public Safety and lifeline. Or be so way out there as far as the evidence on the record or not match their decisions to the record, those are cases where the courts will reverse. But it does not happen very often. Although it has happened to this fcc more than one might think. That is chevron. Host do you agree with that interpretation of chevron yeah . Mr. Halley yes. About the point revelatory pingpong that goes on when you have significant effort to the deference to the Expert Agency. Thats what we both agree it would be better if we dont have this ambiguity because there was a modern federal statute. We made us agree on what the language of the statute should be. But i think we have more in common than people might think. Host and apologize for interrupting. Ms. Sohn i do and make a point about the difference where patrick and i will be. Brand x was a case in the telik medications area. This dissent telecommunications area. What classification should Cable Modem Service be. 2002, early days of broadband, dsl for the telephone comedies. This case went to the Supreme Court. The Supreme Court said the sec was within its rights to classify Cable Modem Service as an Information Service, because at the time, the services included web hosting and email and dns or Domain Name Service aching. Functionally, all these Information Services were part of a bundle that turned what Antonin Scalia a. Was a telik me occasion service into an Information Service. The law was vague and upheld the fcc. This is mainly what the sec and is Net Neutrality repeal order and the court relied upon in upholding a lot of what the fcc did. Telecommunications service. Mr. Halley as you can probably tell from our tell from our discussion, the big issue here is going to be the states. We will see what happens in terms of either side appealing classification or the Central Holding in the case. Where the true ambiguity lies is what it means for state authority going forward. And i think its important to thatthat the one thing perhaps the 20 15th title to order and the restoring Internet Freedom order both agree on is that states were preempted. Most of Broadband Internet access is intrastate. Let me turn what the title title ii order said about that. We reaffirm the longstanding conclusion that broadband is a jurisdictional interstate service. It was a constitute making into and jurisdictional analysis extremely difficult if not impossible when services involved the internet. Therefore, the 2015 title ii order. We exercise our preemption andty to impose consistent with the regulatory scheme. The one place where restoring internet feet freedom agreed is that when the government was making a decision on an interstate service, the states are preempted when what they are trying to do is inconsistent with the federal policy. That is why my general view is this is up to the courts, not me. I would be happy to make a decision right now, but i cant. It will be up to the courts. It will be a strong precedent that makes clear that when they are try to do common care, it will be a high hurdle. I disagree. Whatever we said in 2015, the trust me, when i speak to state groups and state regulators, they get really angry at what we said in 2015 and they will argue again. These cases will be extremely fact intensive. I was at a meeting with state and they warned us that it is hard to draw conclusion about what is going to happen in these cases because they are so fact intensive. ,he only thing i will repeat again, it is possible that patrick and his allies. Communicationshe area that they will be conflict preemption. The argument the fcc made in front of the court were basically batted down one by one. Im not saying it will be easy or difficult. It will be fact intensive. I dont think patricks argument the day in the state. There are other bills and they will move forward. It will actually be really nice if we get federal law. And i hate to beat a dead horse. This is the most important part of Net Neutrality is the authority part. The fcc will be able to oversee the broadband market. The place where the court the argumentthat that antitrust law and the ftc will protect consumers. Said, theye court kind of laid it out that those tools are available. They did not talk specifically about how they will protect consumers from blocking and throttling someone. I dont believe the antitrust laws or the ftc are adequate. You need to have an Expert Agency and that is where the fight will be in a federal bill. The fight will be if the fcc will get to oversee the market, or are they left out of it . If they are left out of it, they will not get any of the groups that are conservatives supporting them. It will not get any democrats supporting them. Host is there any evidence supporting it . No. Ick this continues to be a hypothetical concern that when the restoring Internet Freedom order was first proposed and adopted, we are that this is the end of the internet as we know it. Headlines across cnn and publications that the internet is over. Show and saidur isps will start charging online providers for faster, smarter, better quality services. It will happen. It hasnt happened. The. Is that it is because you guys are on your best behavior. Once you actually get the that it is confirmed as an Information Service, that is when you guys will start doing all the bad stuff. Its not true. Its not going to happen. Whether it is a title ii order or restoring Internet Freedom order, i am certain that gigi will be watching with the isps do. Im certain the groups will continue to watch with the isps do. And let me go back to what orderedg the internet it. And what gigi takes issue with. I think the better approach to ensuring Net Neutrality is to have a smarter, more handsoff marketdriven approach to the internet. As i started this conversation, Net Neutrality is not a law or a regulation. Some headlines said Net Neutrality was overturned or upheld. Net neutrality is the principal or the idea that we can all access the content we want when we want and on the devices we want. We all agree it is important to everybody. The only debate is to how you ensure that. The fcc said that we think investment will go up and there is a benefit to investors and regulators. We think Market Forces are important and will ensure that the market is properly functional. That, we will make sure there is Consumer Protection. We will not do it with heavyhanded regulatory style regulation. Those had negative impact. Have a role states to enforce the general Consumer Protection act. We will require every Internet Service provider to very clearly disclose what their practices are with respect to blocking or throttling. And to the extent that they dont live up to those promises or disclose those practices, the fcc can enforce it. To the extent they dont live up to those promises, the ftc, the cop on the beat whether it is a company like google, facebook, or twitter, a are under the same jurisdiction of at t, verizon, or other Internet Service providers. And to the extent that there is an anticompetitive action, one company purposefully blocking for an anticompetitive purpose, that is why we have antitrust laws. We can disagree about how effective they may or may not be. That it is a regulatory approach to ensure Net Neutrality. All of that said, we would love to have a bill that makes it clear. No blocking, no throttling. Gigi theres a bunch of things there. By number one, has there been throttling, the answer is yes. There have been recent studies that show mobile carriers were throttling video providers like netflix and hulu and others. The twolso note that in years that the title ii order was in place, there were 47,000 complaints filed by consumers. 7000 which the sec refused to consider. Even if you took 1 of those as 47,000 which the sec refused to consider. Even if you took 1 of those as legitimate, that is a lot. 470 complaints. There is something going on. Something in the water. It gets away from the court point. Who will have oversight over the industry . The problem with the ftc is that their authority goes to unfair or deceptive practices. And they interpret that as unfair and deceptive. The provider tells you that they will throttle you, that is something the ftc can do nothing about. Gougingengage in price or fraudulent billing, the ftc will not address that. That is why you have the fcc that has the technological and legal expertise, that is why they need authority. As patrick rightly points out, antitrust laws only go to anticompetitive activity. It doesnt go to the blocking of speech or other consumer issues. This fight really is not about whether companies will block, throttle, or engage in fast lanes. , maybe note evidence reams of such, but there could be prophylactic rules. The ftc does not have the power under a to make rules. Moderate bad behavior. They let consumers know what their rights are. Debate overave a what the balance of that authority ought to be. The notion that the agency that for 80 years has been passed with overseeing competition and Consumer Protection and access to Communications Networks of all kinds should all of a sudden not be involved when it comes to the most Important Communications network of our lifetime doesnt make any sense to me. Question in the final minute. Should congress get involved to clear up the chevron issues . Gigi they can make it more clear. Absolutely. There was a bill passed by the house of representatives sitting in the senate. Majority mcconnell will not put it on the floor. The save the internet act reinstates the 2015 open Internet Order. But better off, for patricks members, it puts in place the socalled forbearance. The parts of title ii they decided not to apply to broadband service, it puts them in place forever. I think patricks members are better off supporting the save the internet act and not taking the chance of having a different sec under a different thenistration bringing back 2015 open Internet Order where the forbearance is not permanent and perhaps not for bearing of the things that they really dont want. Host would you like to see Congress Step in and clear this up . To see i would Like Congress pass a modern, smart policy with respect to Net Neutrality. Absolutely. It is not in anyones interest to go back and forth depending on elections. Its not in anyones interest to fight this out in every state. That it is good to choose one ftc decision over the other. That is what they say the internet act does. Host who brings this to the Supreme Court . The ftc or the Interest Groups . Gigi is closer to the Interest Groups and can answer that for their side. I dont know is the short answer. Gigi first, we can go back to the court itself. We can go back to the actual panel or go back to the entire d. C. Circuit. I think we are still reviewing it. It has only been a week. Were still figuring out what is going to be next. Host Georgetown Law Institute of technology. Gigi stone and patrick kelly, thank you for being on the communicators. This episode and all others are available as podcasts. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. 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