Internet access service as an “information service.” The Supreme Court made clear when affirming the Commission’s original information service classification of cable modem service that Congress
“delegated to the Commission authority to execute and enforce the Communications Act, as well as prescribe the rules and regulations necessary in the public interest to carry out the provisions.”
561This delegation includes the legal authority to interpret the definitional provisions of the Communications Act.
562Nothing in the record meaningfully contests this fundamental point.
563Relying on that authority, we change course from the Title II Order and restore the information service classification of broadband Internet access service, which represents the best interpretation of the Act. As discussed above, this
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Comments at 3-4; CCIA Reply at 20; Public Knowledge Reply at 9-10; American Association of Community Colleges et al. Reply at 8; Geoffrey Rogers Comments at 7; EFF Comments at 10; Catherine Sandoval Reply at 45;
ITIF Comments at 18; Free Press Comments at 68.
558 See, e.g., ICLE Comments at 71; Frontier Comments at 10-11; ACLP Comments at 8-10; ACA Comments at 67;
Free State Comments at 38-40; CEI Comments at 6.
559 ACA Comments at 67.
560 NCTA Comments at 56. See id. (“(“One important advantage of an FTC-led approach is that all participants in the Internet ecosystem could be subject to oversight by a single agency. Indeed, whereas the [FCC] has suggested it lacks authority to engage in open Internet oversight over entities other than [ISPs], the FTC would be able to prevent . . . unfair or deceptive acts or practices by others in the Internet ecosystem as well”); Oracle May 5, 2017 Ex Parte Letter at 2 (criticizing Title II Order for “focusing only on traditional access providers [while] ignor[ing] the largest and most dominant internet players from a customer perspective,” and supporting FTC “as the impartial cop on the broadband beat with authority to reach all the participants in the internet economy”).
561 Brand X, 545 U.S. at 980.
562 Id. at 980-81.
563 For this reason, and for those set forth more fully in Section III above, we reject claims that an information service classification is unambiguously precluded. See, e.g., CDT Comments at 5-17; Free Press Comments at 41–
64; Friends of Community Media Comments at 5-8; RISE Stronger Comments at 10-16. Such assertions are contrary to our interpretation of the statutory language and our application of it to the facts before us and also find no support in the relevant court precedent addressing prior classification decisions, which either affirmed an information service classification or affirmed the recent telecommunications service classification as merely a permissible interpretation of ambiguous statutory language. See, e.g., Nat. Cable & Telecomms. Ass’n v. Brand X Internet Svcs., 545 U.S. 967, 986-1000 (2005) (Brand X); U.S. Telecom Ass’n v. FCC, 825 F.3d 674, 701-11 (D.C.
Cir. 2016) (USTelecom); Time Warner Telecom, Inc. v. FCC, 507 F.3d 205, 215-20 (3d Cir. 2007). In making these arguments, commenters do not dispute the Commission’s general authority to interpret and apply the Act, but merely present arguments regarding the reasonableness or permissibility of interpreting or applying the Act in particular ways.
action is supported by the text, structure, and history of the Act, the nature of ISP offerings, judicial and Commission precedent, and the public policy consequences flowing from reclassification.
564156. An agency of course may decide to change course, and such a decision is not, as some commenters suggest, inherently suspect.
565The Supreme Court has observed that there is “no basis in the Administrative Procedure Act or in our opinions for a requirement that all agency change be subjected to more searching review. . . . [I]t suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.”
566Relevant precedent holds that we need only “examine the relevant data and articulate a satisfactory explanation for [our] action,” a duty we fully satisfy here.
567The “possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency’s finding from being supported by substantial evidence.”
568Rather, we are “entitled to assess
administrative records and evaluate priorities” in light of our current policy judgments.
569As the Court
564 We reject arguments against reclassification based on alleged shortcomings in the justification for changing course provided in the Internet Freedom NPRM given that we fully explain here our rationale for revisiting the Title II Order’s classification of broadband Internet access service. See, e.g., National Consumer Law Center Comments at 8; Parrhesia Project Comments at 1.
565 See, e.g., Cogent Comments at 33 (Reversing course based on disagreement with the reasoning in the first instance “undermines the deference-to-expertise justification that underlies courts’ deference to agency
interpretations of statutes they manage.”); NTCH/Flat Wireless Comments at 16 (“[C]hange must start from the principle that the existing law is entitled to deference, and change requires more than simple disagreement.”).
566 FCC v. Fox Television Stations, Inc., 556 U.S. 502, 514, 515 (2009) (Fox) (emphasis in original); see also, e.g., Chevron Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 863 (1984) (“Our review of the EPA’s varying interpretations of the word ‘source’—both before and after the 1977 Amendments—convinces us that the agency primarily responsible for administering this important legislation has consistently interpreted it flexibly—not in a sterile textual vacuum, but in the context of implementing policy decisions in a technical and complex arena. The fact that the agency has from time to time changed its interpretation of the term ‘source’ does not, as respondents argue, lead us to conclude that no deference should be accorded the agency’s interpretation of the statute.”). It is true that an agency must “provide a more detailed justification than what would suffice for a new policy created on a blank slate . . . when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account.”
Fox, 556 U.S. at 515. However, “[i]n such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy.” Id.
567 Fox, 556 U.S. at 513 (internal quotation marks omitted).
568 Domestic Sec. Inc. v. SEC, 333 F.3d 239, 249 (D.C. Cir. 2003) (quoting Schoenbohm v. FCC, 204 F.3d 243, 246 (D.C. Cir. 2000), internal quotation marks omitted); see also, e.g., NCTA Comments at 12 (“The Commission need not rely on any ‘changed factual circumstances’ as ‘critical to [the Commission’s] classification decision.’”);
USTelecom Comments at 16 (“Case law similarly recognizes that agencies can revise their factual conclusions and, relatedly, that the same agency record can permit a range of factual conclusions.”). As such, we reject arguments that reclassification must be premised on changed factual circumstances or preceded by a significant gap in time.
See, e.g., Attorney General of Illinois et al. Comments at 12, 17-18; CCIA Comments at 34-36; Cogent Comments at 32; D.C. CTO Comments at 10; NASUCA Comments at 8-10; Parrhesia Project Comments at 1, 7-8; RISE Stronger Comments at 1, 2; Internet Association Reply at 14.
569 National Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1043 (D.C. Cir. 2012); see also, e.g., Comcast Comments at 50 (“In short, if it was permissible under the APA for the previous Commission to undo nearly two decades of consistent Title I classification decisions and findings on the basis of predictive judgments regarding the policy merits of Title II, it unquestionably remains permissible for the current Commission to reinstate the Title I classification that was in place for nearly two decades and that has already been approved by the Supreme Court.”);
AT&T Sept. 27, 2017 Ex Parte Letter, Attach. at 2 (“It is also entirely permissible for an agency to reverse course because its new leadership disagrees on broad policy grounds with the controversial agenda of the agency’s prior
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recognized in Brand X, “in Chevron itself, the Court deferred to an agency interpretation that was a recent reversal of agency policy.”
570The USTelecom decision supports our understanding of the relevant legal standard, affirming the Title II Order’s reclassification of broadband Internet access service irrespective of whether any facts had changed.
571157. Such a change in course can be justified on a variety of possible grounds. The Supreme Court observed in Brand X that “the agency . . . must consider varying interpretations and the wisdom of its policy on a continuing basis, for example in response to . . . a change in administrations.”
572In addition, if an agency’s predictions “prove erroneous, the Commission will need to reconsider” the associated regulatory actions “in accordance with its continuing obligation to practice reasoned decision-making.”
573In short, the Commission’s reasoned determination today that classifying broadband Internet access service as an information service is superior both as a matter of textual interpretation and public policy suffices to support the change in direction—even absent any new facts or changes in
circumstances. But even assuming such new facts were necessary, the record provides several other sufficient and independent bases for our decision to revisit the classification of broadband Internet access service.
158. For example, we find that the Title II Order’s regulatory predictions have not been borne out. Although purporting to adopt a ‘light-touch’ regulatory framework for broadband Internet access
(Continued from previous page)leadership. . . . In short, nothing in the APA requires the Commission to base its reinstatement of an ‘information service’ classification on any findings of fact that post-date the Title II Order.”).
570 Brand X, 545 U.S. at 981-82.
571 USTelecom, 825 F.3d at 709 (“But we need not decide whether there ‘is really anything new’ because, as the partial dissent acknowledges, the Commission concluded that changed factual circumstances were not critical to its classification decision: ‘[E]ven assuming, arguendo, that the facts regarding how [broadband service] is offered had not changed, in now applying the Act’s definitions to these facts, we find that the provision of [broadband service] is best understood as a telecommunications service, as discussed [herein] . . . and disavow our prior interpretations to the extent they held otherwise.’” (citations omitted)).
572 Brand X, 545 U.S. at 981 (citation and internal quotation marks omitted); see also, e.g., Nat’l Ass’n of Home Builders, 682 F.3d at 1043 (“A change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal of the costs and benefits of its programs and regulations.” (quoting Motor Vehicle Mfrs. Ass’n. of U.S, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 59 (1983) (Rehnquist, J., concurring in part and dissenting in part), internal quotation marks omitted)); Cox Comments at 7-8 (citing Brand X, 545 U.S. at 982); NCTA Comments at 11-12 (same); Verizon Comments at 60 (“The fact that a new administration is in place, with a new take on such questions [of broadband Internet access service policy], is a particularly strong basis for reevaluating the prior Commission’s policies and returning to the historical approach in this area.”).
573 Aeronautical Radio v. FCC, 928 F.2d 428, 445 (D.C. Cir. 1991); see also, e.g., ACA Comments at 58 (citing Aeronautical Radio, 928 F.2d at 445); Verizon Comments at 53 (citing Chevron, 467 U.S. at 863-63 and Am. Family Ass’n v. FCC, 365 F.3d 1156, 1166 (D.C. Cir. 2004)). In USTelecom the D.C. Circuit applied a limited and highly deferential standard of review to the Commission’s predictive judgements, see, e.g., USTelecom, 825 F.3d at 707, 710, and thus efforts to distinguish Aeronautical Radio based on the limited review conducted by the court there are unavailing. See, e.g., CCIA Comments at 33-34 (“[G]iven that the D.C. Circuit admitted that its ‘decision [was]
controlled by [a] limited standard of review’ on this particular question, Aeronautical Radio should not be read to giving [sic] the Commission the ‘more than ample latitude’ that Commission [sic] claims it does in the NPRM.”
(footnote omitted)); CCIA Reply at 26 (similar). In any case, efforts to narrow the interpretation of precedent cited in the NPRM to the cases’ specific facts and circumstances, see, e.g., CCIA Comments at 33-37; CCIA Reply at 26-27, neglects the broader body of precedent—including the Supreme Court’s decision in Chevron—emphasizing an agency’s continuing responsibility to evaluate how prior policy judgments are borne out in practice. Chevron, 467 U.S. at 863-64 (“[T]he agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.”); see also, e.g., Brand X, 545 U.S. at 981 (quoting Chevron, 467 U.S. at 863-64); Mary V. Harris Found. v. FCC, 776 F.3d 21, 24 (2015) (same).
service,
574this view of the Title II Order’s action faced skepticism at the time, and we find those concerns confirmed in practice.
575For example, the Wireless Telecommunications Bureau initiated inquiries into wireless ISPs’ sponsored data and zero-rated offerings, leading to a report casting doubt on the legality of certain types of such offerings.
576That report was later retracted.
577And the Commission proceeded, in the wake of the reclassification in the Title II Order, to adopt complex and highly prescriptive privacy regulations for broadband Internet access service, which ultimately were disapproved by Congress under the Congressional Review Act.
578The amorphous and potentially wide-ranging implications of the Title II-based regulatory framework have hindered (or will likely hinder) marketplace innovation,
579as the record here indicates and as one logically would expect.
580That certain specific steps eventually were rolled back is no cure—rather, those initial actions provide cause for significant concerns that the
regulatory framework adopted in the Title II Order would be anything but “light-touch” over time. Given the evidence that the Title II-based framework prompted additional regulatory action and was not living up to its “light-touch” label, we disagree with claims that “[t]here has been no material change of circumstance since the adoption of the” Title II Order,
581or that the shortcomings inherent in the Title II approach could be addressed adequately through minor adjustments to the rules adopted in the Title II Order.
582159. Further, we are not persuaded that there were reasonable reliance interests in the Title II Order that preclude our revisiting the classification of broadband Internet access service.
583Assertions in the record regarding absolute levels of edge investment do not meaningfully attempt to attribute particular
574 Title II Order, 30 FCC Rcd at 5603-04, para. 5.
575 See, e.g., USTelecom, 825 F.3d at 754-56 (Williams, J., concurring in part and dissenting in part).
576 Wireless Telecommunication Bureau, Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings for Zero Rated Content and Services (Jan. 11, 2017),
http://transition.fcc.gov/Daily_Releases/Daily_Business/2017/db0111/DOC-342987A1.pdf.
577 Wireless Telecommunications Bureau Report: Policy Review of Mobile Broadband Operators’ Sponsored Data Offerings For Zero Rated Content And Services, Order, 32 FCC Rcd 1093 (WTB 2017).
578 See Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, WC Docket No.
16-106, Report and Order, 31 FCC Rcd 13911 (2016); Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, Pub. L. No. 115-22, 131 Stat. 88 (enacting S.J. Res. 34, 115th Cong. (2017)).
579 See supra Part III.C.1.
580 See, e.g., Letter from Henry G. Hultquist, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 17-108, Attach. at 1 (filed Sept. 27, 2017) (AT&T Sept. 27 Ex Parte Letter) (“[I]t is indisputable as a matter of economic theory that any broad scheme of economic regulation imposes costs (which may or may not be outweighed by benefits) on the affected industry. It is also indisputable that these costs are particularly pronounced where, as here, the industry is technologically and commercially dynamic, the regulatory regime imposes broad and unpredictable conduct restrictions, and it generates widespread concerns about regulatory creep. These observations hold true whether or not these regulatory costs—in the form of forgone investment and innovation—can be measured with precision.” (citations omitted)). We thus reject the suggestion that the Title II Order yielded “legal and economic certainty.” See Free Press Comments at 4.
581 ACLU Comments at 21; see also, e.g., Mozilla Comments at 7 (“We have not seen significant evidence of any problems with the 2015 rules.”).
582 See, e.g., D.C. CTO Comments at 9.
583 See, e.g., INCOMPAS Reply at 7 (“Moreover, reliance interests also demand heightened scrutiny. Billions of dollars of investment have flowed into investment at the edge in reliance on the existence of the 2015 rules. Those reliance interests must (as explained further below) be respected through maintenance of the 2015 rules.” (footnote omitted)).
portions of that investment to any reliance on the Title II Order.
584Nor are we persuaded that such reliance would have been reasonable in any event, given the lengthy prior history of information service classification of broadband Internet access service, which we are simply restoring here after the brief period of departure initiated by the Title II Order.
585160. “[A]n agency literally has no power to act . . . unless and until Congress confers power upon it.”
586And so our role is to achieve the outcomes Congress instructs, invoking the authorities that Congress has given us—not to assume that Congress must have given us authority to address any problems the Commission identifies. However, rather than looking to Congress to address its statutory authority after the 2010 Comcast decision, the Commission instead attempted increasingly-regulatory approaches under existing statutory provisions, culminating in the Title II Order’s application of a legal regime that was ill-suited for broadband Internet access service. Returning to the Commission’s historically sound approach to interpreting and applying the Act to broadband Internet access service corrects what we see as shortcomings in how the Commission, in the recent past, conceptualized its role in this context.
161. We also conclude that the Commission should have been cautioned against reclassifying broadband Internet access service as a telecommunications service in 2015 because doing so involved
“laying claim to extravagant statutory power over the national economy while at the same time
strenuously asserting that the authority claimed would render the statute ‘unrecognizable to the Congress that designed’ it.”
587Such interpretations “typically [are] greet[ed] . . . with a measure of skepticism” by courts,
588and we believe they should be by the Commission, as well.
589As relevant here, the D.C. Circuit in Verizon observed that “regulation of broadband Internet providers”—there, rules that required per se common carriage—“certainly involves decisions of great ‘economic and political significance.’”
590That seems at least as apt a description of the Title II Order decision classifying broadband Internet access
584 See, e.g., Comcast Comments at 49-50 (“If challengers were to raise this [reliance] argument, it would be their burden to establish the reliance interests that the Commission must take into consideration: ‘[T]he extent to which’
the FCC must ‘address reliance will be affected by the thoroughness of [challengers’] public comments,’ and they must present those costs with particular specificity.” (emphasis in original, footnote omitted)); AT&T Sept. 27, 2017 Ex Parte Letter, Attach. at 3 (“Although edge providers have indeed invested billions of dollars since 2015, they also invested billions of dollars in the years leading up to 2015, and neither INCOMPAS nor anyone else provides any empirical basis for speculating that edge investment since 2015 would have been substantially lower in the absence of Title II regulation.”).
585 See, e.g., Verizon Comments at 52 (“This is not the case of an abrupt agency departure from a long-settled interpretation; rather, this proceeding involves a restoration of such an interpretation.”); id. at 54 (“[U]nlike the Title II Order, which upset decades of settled regulatory analysis, the Commission’s proposal in the Notice will not disrupt any meaningful investment-backed expectations.”).
586 La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 374 (1986).
587 Utility Air Regulatory Group, 134 S.Ct. at 2444 (citation omitted).
588 Id.
589 We rely on these principles to inform what interpretation constitutes the best reading of the Act independent of any broader legal implications that potentially could result from such considerations. Thus, although the separate opinions in the denial of rehearing en banc in USTelecom debated the application of such principles here—including with respect to issues of agency deference and the permissibility of the Commission’s prior classification—we need not and do not reach such broader issues. Compare, e.g., U.S. Telecom Ass’n v. FCC, 855 F.3d at 383-88
(Srinivasan, J., and Tatel, J., concurring) (arguing that Brand X dictates that the court reject arguments against agency deference and/or the permissibility of the Commission’s prior interpretation based on the “major questions”
or “major rules” doctrine), with, e.g., id. at 402-08 (Brown, J., dissenting) (statutory ambiguity was an inadequate basis to “turn[] Internet access into a public utility,” which “is obviously a ‘major question’ of deep economic and political significance”); id. at 417-26 (Kavanaugh, J., dissenting) (similar).
590 Verizon, 740 F.3d at 25 (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000)).