United States Telecom Ass'n v. Federal Communications Commission (855 F.3d 381, 2017)

ORDER

PER CURIAM

The petitions for rehearing en banc, the responses thereto, and the brief of amici curiae were circulated to the full court, and a vote was requested. Thereafter, a majority of the judges eligible to vote did not vote in favor of the petitions. Upon consideration of the foregoing, it is

ORDERED that the petitions be denied.

SRINIVASAN, Circuit Judge,

joined by TATEL, Circuit Judge, concurring in the denial of rehearing en banc:

In this case, a panel of our court upheld the FCC’s 2015 Open Internet Order, commonly known as the net neutrality rule. The parties who unsuccessfully challenged the Order before the panel have now filed petitions seeking review by the full court sitting en banc. The court today denies en banc review. En banc review would be particularly unwarranted at this point in light of the uncertainty surrounding the fate of the FCC’s Order. The agency will soon consider adopting a Notice of Proposed Rulemaking that would replace the existing rule with a markedly different one. See In re Restoring Internet Freedom, FCC (Apr. 27, 2017), https://apps.fcc. gov/edocs_public/attachmatch/DOC-344614 Al.pdf. In that light, the en banc court could find itself examining, and pronoune-ing on, the validity of a rule that the agency had already slated for replacement.

While we concur in the court’s denial of en banc review, we write to respond to a particular contention pressed by one of our dissenting colleagues: that the FCC’s Order, and thus our panel decision sustaining it, departs from controlling Supreme Court precedent in two distinct ways. First, our colleague submits that Supreme Court decisions require clear congressional authorization for rules like the net neutrality rule, and the requisite clear statutory authority, he argues, is absent here. See infra at 418-26 (Kavanaugh, J., dissenting); accord infra at 402-05 (Brown, J., dissenting). Second, our colleague contends that the rule conflicts with Supreme Court decisions ostensibly arming internet service providers (ISPs) with a First Amendment shield against net neutrality obligations. See infra at 426-35 (Kavanaugh, J., dissenting).

Respectfully, both lines of argument are misconceived. As to the first, the Supreme Court, far from precluding the FCC’s Order due to any supposed failure of congressional authorization, has pointedly recognized the agency’s authority under the governing statute to do precisely what the Order does. As to the second, no Supreme Court decision supports the counterintui-tive notion that the First Amendment entitles an ISP to engage in the kind of conduct barred by the net neutrality rule— i.e., to hold itself out to potential customers as offering them an unfiltered pathway to any web content of their own choosing, but then, once they have subscribed, to turn around and limit their access to certain web content based on the ISP’s own commercial preferences.

Before taking up the merits of those two issues, we first emphasize the role in which we examine them. The wisdom of the net neutrality rule was, and remains, a hotly debated matter. The FCC received the views of some four million commenters before adopting the rule, In re Protecting and Promoting the Open Internet, 30 FCC Red. 5601, 5604 ¶ 6 (2015) (Order), and the debate over the rule continues to this day, with the agency now poised to consider replacing it. We have no involvement in that ongoing debate. Our task is not to assess the advisability of the rule as a matter of policy. It is instead to assess the permissibility of the rule as a matter of law. Does the rule lie within the agency’s statutory authority? And is it consistent with the First Amendment? The answer to both questions, in our view, is yes.

I.

According to our dissenting colleague, the FCC’s Order runs afoul of a doctrine he gleans from certain Supreme Court decisions invalidating an agency rule as lying outside the agency’s congressionally delegated authority. Our colleague understands those decisions to give rise to a “major rules” doctrine. That doctrine is said to embody the following understanding about the scope of agencies’ delegated authority: while agencies are generally assumed to possess authority under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), to issue rules resolving statutory ambiguities, an agency can issue a major rule — i.e., one of great economic and political significance — only if it has clear congressional authorization to do so. See injra at 418-19 (Kavanaugh, J., dissenting). Our other dissenting colleague generally agrees with this line of argument (although she calls the doctrine the “major questions” doctrine rather than the “major rules” doctrine). See infra at 402-03 (Brown, J., dissenting).

We have no need in this case to resolve the existence or precise contours of the major rules (or major questions) doctrine described by our colleagues. Assuming the existence of the doctrine as they have expounded it, and assuming further that the rule in this case qualifies as a major one so as to bring the doctrine into play, the question posed by the doctrine is whether the FCC has clear congressional authorization to issue the rule. The answer is yes. Indeed, we know Congress vested the agency with authority to impose obligations like the ones instituted by the Order because the Supreme Court has specifically told us so.

The pertinent decision is National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). That case, like this one, addressed the proper regulatory classification under "the Communications Act of broadband internet service. Brand X involved the provision of broadband internet access via cable systems. At the time of the decision, cable broadband was one of two types of broadband service available to customers, the other being DSL (digital subscriber line). See id. at 975, 125 S.Ct. 2688.

The FCC had applied a different form of regulatory treatment to cable broadband service than to DSL service. The agency had classified DSL as a “telecommunications service” for purposes of the Communications Act. See id. at 975, 1000, 125 S.Ct. 2688. That classification carries significant statutory consequénces. The Act requires treating telecommunications providers as common carriers presumptively subject to the substantial regulatory obligations attending that status. See id. at 975-76, 125 S.Ct. 2688. Common carriers, for instance, generally must afford neutral, nondiscriminatory access to-their services, and must avoid unjust and unreasonable practices in that connection. See id. at 975-76, 1000, 125 S.Ct. 2688.

Whereas the FCC had classified DSL broadband as a telecommunications service, the agency had instead elected to classify cable broadband as an “information service,” the- other of the two classifications available to the agency under the statute. See id. at 978, 125 S.Ct. 2688. Providers of an information service, in contrast with telecommunications providers, are not considered to be common carriers under the Act. As a result, providers of an information service are subject to less extensive regulatory obligations and oversight than are telecommunications providers. See id. at 975-76, 125 S.Ct. 2688.

The issue in Brand X was whether the Communications Act compelled the FCC to classify cable broadband ISPs as telecommunications providers subject to regulatory treatment as common carriers. The Court answered that question no. Critically for our purposes, though, the Court made clear in its decision — over and over — that the Act left the matter to the agency’s discretion. In other words, the FCC could elect to treat broadband ISPs as common carriers (as it had done with DSL providers), but the agency did not have to do so.

The Court, to that end, explained that it had “no difficulty concluding that Chevron applie[d]” to the agency’s decision to classify cable broadband as an information service rather than a telecommunications service. Id. at 982, 125 S.Ct. 2688. The statute’s “silence” on the matter left the Commission “discretion to fill the consequent statutory gap.” Id. at 997, 125 S.Ct. 2688. That meant the question “would be resolved, first and foremost, by the agency.” Id. at 982, 125 S.Ct. 2688 (internal quotation marks omitted); see id. at 980-81, 125 S.Ct. 2688. The Court repeatedly emphasized the Commission’s authority to use “its expert policy judgment to resolve these difficult questions.” Id. at 1003, 125 S.Ct. 2688. In that light, the proper classification of broadband service would turn “on the factual particulars of how Internet technology works and how it is provided, questions Chevron leaves to the Commission to resolve in the first instance.” Id. at 991, 125 S.Ct. 2688.

Consequently, the Court held, the court of appeals in Brand X had “erred in refusing to apply Chevron to the Commission’s interpretation of the definition of ‘telecommunications service,’ ” and in declining to defer to the agency’s decision to treat cable broadband as an information service. Id. at 984, 125 S.Ct. 2688 (quoting 47 U.S.C. § 153(46) (2000) (currently codified at 47 U.S.C. § 153(53))). But deference equally would have been owed, the Supreme Court made clear, if the FCC had reached the opposite resolution by classifying cable broadband providers as telecommunications carriers. That is because the agency had only two regulatory classifications available to it. To affirm the FCC’s statutory discretion to select between them was necessarily to countenance the agency’s treatment of cable broadband as a telecommunications service.

Indeed, the Court went as far as to affirmatively “leave[ ] untouched” the court of appeals’s belief that the better reading of the statute — albeit not the one that had been adopted by the agency— called for treating broadband providers as telecommunications carriers. Id. at 985-86, 125 S.Ct. 2688. And the Court fully understood the significant regulatory implications if the agency were instead to make that choice: classification as a telecommunications service “would require applying presumptively mandatory Title II [i.e., common carrier] regulation to all ISPs.” Id. at 995 n.2, 125 S.Ct. 2688.

The concurring and dissenting opinions in Brand X reinforced the majority’s recognition of the agency’s statutory authority to subject ISPs to regulation as common carriers. Justice Breyer’s concurring opinion concluded that the FCC’s decision to classify cable broadband as an information service fell “within the scope of its statutorily delegated authority — though perhaps just barely.” Id. at 1003, 125 S.Ct. 2688 (Breyer, J., concurring). If the FCC’s election not to impose common carrier obligations on cable broadband ISPs “just barely” fell within the agency’s discretion, the opposite choice necessarily would have fallen comfortably within the agency’s con-gressionally delegated authority.

Justice Scalia’s dissenting opinion, joined by Justices Souter and Ginsburg, went even further. According to Justice Scalia, the statute permitted only one conclusion: cable broadband ISPs “are subject to Title II regulation as common carriers, like their chief competitors [e.g., DSL] who provide Internet access through other technologies.” Id. at 1006, 125 S.Ct. 2688 (Scalia, J., dissenting). The agency, in Justice Scalia’s view, had no discretion to conclude otherwise. And he expressly accepted that his reading of the Act would result in “common-carrier regulation of all ISPs,” a result he considered “not a worry.” Id. at 1011, 125 S.Ct. 2688. (He noted, though, that the agency possessed statutory authority to forbear from applying the full range of common carrier regulatory obligations, id. at 1011-12, 125 S.Ct. 2688, an authority the FCC exercised when it fashioned the rule we now review, see Order ¶¶ 434-532.)

The upshot of Brand X with regard to the FCC’s eongressionally delegated authority over broadband ISPs is unmistakable and straightforward. All nine Justices recognized the agency’s statutory authority to institute “common-carrier regulation of all ISPs,” with some Justices even concluding that the Act left the agency with no other choice. 545 U.S. at 1011, 125 S.Ct. 2688 (Scalia, J., dissenting). In the Order under review, the agency took up the Brand X Court’s' invitation. It decided to classify broadband ISPs as telecommunications providers, enabling it to impose common carrier obligations on ISPs such as the net neutrality rule in question here.

In light of Brand X, our dissenting colleague’s reliance on the “major rules” doctrine cannot carry the day. Recall that the doctrine ultimately embodies an understanding about congressional authorization: an agency, the' doctrine says, can adopt a major rule only if it clearly possesses congressional authorization to do so. The major question at issue here, according to our colleague, is whether the FCC can subject broadband ISPs to common carrier obligations. See infra at 422-23 (Kavanaugh, J., dissenting). If we assume that the FCC’s decision to treat broadband ISPs as common carriers amounts to a major rule, the question then is whether the agency clearly has authority under the Act to make that choice. In Brand X, the Supreme Court definitively — and authoritatively, for our purposes as an inferior court — answered that question yes.

It bears emphasis in this regard that, by the time of Brand X, two of the Supreme Court decisions cited by the dissent as exemplars of the major rules doctrine— MCI Telecommunications Corp. v. Am. Telephone & Telegraph Co., 512 U.S. 218, 114 S.Ct. 2223, 129 L.Ed.2d 182 (1994), and FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000)—had already been decided. Brown & Williamson is particularly notable. There, the Supreme Court considered the FDA’s exercise of its general rulemaking authority under the Food, Drug, and Cosmetic Act to regulate the use of tobacco products by children and adolescents. The Court, although applying principles of Chevron deference to the FDA’s assertion of authority over tobacco products, concluded that Congress did not “delegate a decision of such economic and political significance to an agency in so cryptic a fashion.” Id. at 160, 120 S.Ct. 1291.

Later, in Brand X, the Court reached a different conclusion about the FCC’s regulatory authority over ISPs. The Court, again applying Chevron, this time concluded that Congress had authorized the agency to decide whether to regulate ISPs as common carriers. As between the two possible classifications, “the Commission’s choice of one of them is entitled to deference.” Brand X, 545 U.S. at 989, 125 S.Ct. 2688.

We note, further, that there is no material difference between the technology considered in Brand X and the technology at issue here. The petitioning parties have contended throughout this case that Brand X involved only something referred to as the “last mile” of internet service. But the panel straightforwardly (and unanimously) rejected their effort to make anything of that supposed distinction. See U.S. Telecom Ass’n v. FCC, 825 F.3d 674, 702 (D.C. Cir. 2016); id. at 745 (Williams, J., concurring in part and dissenting in part). Our dissenting colleague likewise makes no effort to distinguish Brand X on such a basis. Rather, both cases involve “the FCC’s authority to classify Internet service as a telecommunications service.” Infra, at 425 (Kavanaugh, J., dissenting); but see infra 404-05 (Brown, J., dissenting). And Brand X, in clearly recognizing the agency’s authority to do so under the Act, negates any argument under the major rules doctrine that the FCC lacked statutory authority to issue the Order we now review.

Our dissenting colleague nonetheless contends that Brand X poses no obstacle to invalidating the FCC’s Order under the major rules doetoine. His argument runs as follows. The question under the major rules doctrine, he observes, is whether Congress has “clearly authorized the FCC to subject Internet service providers to the range of burdensome common-carrier regulations associated with telecommunications services.” Infra at 425 (Kavanaugh, J., dissenting). But the Brand X Court, he then notes, found the statute “ambiguous about whether Internet service was an information service or a telecommunications service.” Id. at 425. In his view, “Brand Xs finding of ambiguity by definition means that Congress has not clearly authorized the FCC to issue the net neutrality rule.” Id. at 426.

That analysis rests on a false equivalence: it incorrectly equates two distinct species of ambiguity. It is one thing to ask whether “Internet service is clearly a telecommunications service under the statute.” Id. at 425. It is quite another thing to ask whether Congress has “clearly authorized the FCC to classify Internet service as a telecommunications service,” which is the relevant question under our colleague’s understanding of the major rules doctrine. Id. The former question asks whether the statute itself clearly classifies ISPs as telecommunications providers. The latter asks whether the statute clearly authorizes the agency to classify ISPs as telecommunications providers.

Our colleague assumes that, if the answer to the former question is no, “that is the end of the game for the net neutrality rule.”' Id. at 425. Not at all. A negative answer to -the former question hardly dictates a negative answer to the latter, more salient, one. The statute itself might be ambiguous about whether ISPs are to be treated as common carriers, but still be clear in authorizing the agency to resolve the question.

Indeed, that dichotomy perfectly captures Brand Z’s holding. Justice Scalia, in dissent, believed that the statute clearly compelled treating ISPs as telecommunications providers. The majority disagreed, finding the statute ambiguous on the question. But the majority found that the agency was empowered to resolve the ambiguity — i.e., to decide whether ISPs should be classified as telecommunications providers presumptively subject to common carrier obligations. In short, whereas Brand X found statutory ambiguity on whether ISPs are telecommunications providers, the decision found no statutory ambiguity on whether the FCC gets to answer that question.

So understood, Brand X dictates rejecting our dissenting colleague’s argument based on the major rules doctrine. It is thus perhaps unsurprising that none of the petitioning parties, no member of the original panel (including our colleague who dissented in part at the panel stage), and neither of the dissenting Commissioners objected to the FCC’s Order as infringing any such doctrine. (We note, though, that a group of intervenors led by TechFreedom makes such an argument.) The major rules doctrine is said to promote separation-of-powers principles by assuring that Congress has delegated authority to an Executive agency to decide a major matter of policy. See infra at 418-19 (Kavanaugh, J., dissenting). But in light of Brand Zs recognition of the FCC’s congressionally delegated authority to decide whether to regulate ISPs as common carriers, it would disserve — not promote — the separation of powers to deny the agency the authority conferred on it by Congress.

In the end, the major rules doctrine, as articulated by our colleague, affords no basis for invalidating the net neutrality rule. The Supreme Court decisions ostensibly giving rise to that doctrine lie far afield from this case. They involve, per our colleague’s description, “regulating cigarettes, banning physician-assisted suicide, eliminating telecommunications rate-filing requirements, or regulating greenhouse gas emitters.” Id. at 421. The Court’s decision in Brand X, by contrast, involved the same statute (the Communications Act), the same agency (the FCC), the same factual context (the provision of broadband internet access), and the same issue (whether broadband ISPs are telecommunications providers, and hence common carriers, under the Act). Brand X unambiguously recognizes the agency’s statutorily delegated authority to decide that issue.

Does Brand X, then, necessarily validate the agency’s decision to classify broadband ISPs as telecommunications providers and to subject them to common carrier obligations? No, it does not. While Brand X recognizes the FCC’s statutory authority to treat broadband ISPs as common carriers, the agency must carry out its authority in a reasonable and non-arbitrary way. The partial dissent from the panel’s disposition believed that the FCC’s Order fell short on those grounds, and the petitioning parties have raised a host of challenges to the agency’s decisionmaking process and outcome. The panel majority concluded otherwise and upheld the rule.

But while Brand X could not have settled the validity of a rule the FCC had yet to promulgate, it did settle the agency’s authority to classify broadband ISPs as telecommunications providers under the Communications Act. The major rules doctrine, as conceptualized by our dissenting colleague, is a heuristic for determining whether a given rule falls within an agency’s congressionally delegated authority. Once the Supreme Court says that a rule does so — as Brand X did with regard to the FCC’s authority to treat ISPs as common carriers — our inquiry is over. Insofar as the FCC’s Order involves a major rule, then, Brand X resolves the agency’s statutory authority to adopt it.

II.

Our dissenting colleague separately argues that the First Amendment poses an independent bar to the FCC’s Order. The Order, he submits, infringes the First Amendment rights of broadband ISPs. Specifically, he understands Supreme Court precedent to recognize a First Amendment entitlement on the part of an ISP to block its subscribers from accessing certain internet content based on the ISP’s own preferences, even if the ISP has held itself out as offering its customers an indiscriminate pathway to internet content of their own — not the ISP’s — choosing.

Under that view, an ISP, for instance, could hold itself out to consumers as affording them neutral, indiscriminate access to all websites, but then, once they subscribe, materially degrade their ability to use Netflix for watching video — or even prevent their access to Netflix altogether — in an effort to steer customers to the ISP’s own competing video-streaming