USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 1 of 65
ORAL ARGUMENT NOT YET SCHEDULED
No. 11-1355
In the United States Court of Appeals
for the District of Columbia Circuit
VERIZON ET AL.,
Petitioners,v.
FEDERAL COMMUNICATIONS COMMISSION,
Respondent.On Appeal from an Order of the Federal
Communications Commission
BRIEF OF INTERVENORS OPEN INTERNET
COALITION, PUBLIC KNOWLEDGE, VONAGE
HOLDINGS CORPORATION, AND NATIONAL
ASSOCIATION OF STATE UTILITY CONSUMER
ADVOCATES
Henry Goldberg
Pantelis Michalopoulos
GOLDBERG, GODLES,
Stephanie A. Roy
WIENER & WRIGHT
Andrew W. Guhr
1229 Nineteenth Street, NW
STEPTOE & JOHNSON LLP
Washington, DC 20036
1330 Connecticut Avenue, NW
(202) 429-4900
Washington, DC 20036
hgoldberg@g2w2.com
(202) 429-3000
Counsel for Open Internet
Counsel for Open Internet
Coalition
Coalition
Additional counsel listed on next page
November 15, 2012
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 2 of 65
Sherwin Siy
PUBLIC KNOWLEDGE
1818 N Street, NW, Suite 410
Washington, DC 20036
(202) 861-0020
David C. Bergmann
NATIONAL ASSOCIATION OF STATE
UTILITY CONSUMER ADVOCATES
3293 Noreen Drive
Columbus, OH 43221-4568
(614) 771-5979
Kurt Matthew Rogers
Brendan Daniel Kasper
VONAGE HOLDINGS CORPORATION
23 Main Street
Holmdel, NJ 07333
(732) 528-2600
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CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
A. Parties:
All parties, intervenors, and amici appearing in this Court are listed in the
Brief for Respondent Federal Communications Commission.
B. Rulings Under Review:
The rulings under review are listed in the Brief for Respondent Federal
Communications Commission.
C. Related Cases:
As correctly stated in the Brief for Respondent Federal Communications
Commission, this case has not previously been before this Court, and we are not
aware of any related case pending before this Court or any other court.
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CORPORATE DISCLOSURE STATEMENTS
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and Rule26.1 of the Rules of the United States Court of Appeals for the District of
Columbia Circuit, Intervenors hereby submit the Corporate Disclosure Statements
below.
OPEN INTERNET COALITION
The Open Internet Coalition (“Coalition”) is a non-profit organization thatrepresents businesses that share a common goal—keeping the Internet fast, open,
and accessible to all Americans. The Open Internet Coalition has no parent
corporations, and no publicly held company has a 10% or greater ownership in the
Open Internet Coalition. Open Internet Coalition members and participants
include Amazon.com, Ask.com, Chemistry.com, Citysearch, CollegeHumor,
Computer & Communications Industry Association, Digital Media Association,
DISH Network, Earthlink, eBay, Electronic Retailing Association, Facebook,
Google, IAC, iWon, Match.com, Net Coalition, Netflix, PayPal, ServiceMagic,
Shoebuy.com, Skype, Sling Media, Sony Electronics, Inc., StubHub, TechNet,
TiVo, Twitter, Vanguard, Vonage, Writers Guild of America (West), and
YouTube. More information can be found at www.openinternetcoalition.org.
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PUBLIC KNOWLEDGE
Public Knowledge (“PK”) is a non-profit organization incorporated in theDistrict of Columbia. PK has no parent corporation, nor is there any publicly held
corporation that owns stock or other interest in PK.
VONAGE HOLDINGS CORPORATION
Vonage Holdings Corp., through its wholly owned subsidiary VonageAmerica, Inc., provides low-cost communications services connecting individuals
through broadband devices worldwide. Vonage Holdings Corp. is a publicly held
corporation, traded on the New York Stock exchange under the symbol VG. No
publicly held corporation holds a 10% or greater interest in Vonage Holdings
Corp., directly or indirectly.
NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER
ADVOCATES
The National Association of State Utility Consumer Advocates(“NASUCA”) is a non-profit corporation incorporated in the State of Florida.
NASUCA is an association of advocate offices in more than 40 states and the
District of Columbia. NASUCA’s members are designated by laws of their
respective jurisdictions to represent the interests of utility consumers before state
and federal regulators and in the courts. NASUCA member offices operate
independently from the regulatory commissions in their states. Some are
separately established utility advocate organizations, while others are divisions of
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larger departments, such as the Office of Attorney General. NASUCA associate
and affiliate member offices also serve utility consumers, but have not been created
by state law or do not have statewide authority. NASUCA has no parent
corporation or publicly held stock.
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TABLE OF CONTENTS
CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED
CASES ...................................................................................................................... ii
CORPORATE DISCLOSURE STATEMENTS ................................................ iii
OPEN INTERNET COALITION .............................................................. iii
PUBLIC KNOWLEDGE ............................................................................. iv
VONAGE HOLDINGS CORPORATION ................................................ iv
NATIONAL ASSOCIATION OF STATE UTILITY
CONSUMER ADVOCATES ....................................................................... iv
TABLE OF AUTHORITIES .............................................................................. viii
GLOSSARY .......................................................................................................... xiii
STATUTES AND REGULATIONS ...................................................................... 1
STATEMENTS OF THE CASE AND JURISDICTION, QUESTIONS
PRESENTED, AND THE APPLICABLE STANDARD OF REVIEW ............. 1
SUMMARY OF ARGUMENT ............................................................................... 1
ARGUMENT ............................................................................................................ 6
I.
THE INTERVENORS REPRESENT A BROAD CROSS
SECTION OF INTERNET SERVICE AND CONTENT
PROVIDERS, NETWORK OPERATORS, AND USERS OF
INTERNET SERVICES ............................................................................... 6
II.
THE FCC HAS AUTHORITY TO ESTABLISH THE OPEN
INTERNET RULES ...................................................................................... 8
A.
The FCC Has Authority Under Section 706 of the
Telecommunications Act of 1996 ....................................................... 8
1.
Section 706 Is an Independent Source of Direct
Authority .................................................................................... 8
2.
The Open Internet Rules Remove Barriers to
Infrastructure Investment by Facilitating a Virtuous
Cycle of Infrastructure and Content Investment ................ 11
B.
The FCC Has Regulatory Authority Under Section 628 of
the Telecommunications Act ............................................................ 23
III.
THE INJURY OF VERIZON AND METROPCS FROM THE
RULES IS QUESTIONABLE .................................................................... 26
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IV.
THE OPEN INTERNET RULES ARE PERMISSIBLE LIGHT-
HANDED REGULATION WITHOUT NEED TO RECLASSIFY
BROADBAND ACCESS UNDER TITLE II ............................................ 28
A.
The Open Internet Rules Are Not Prohibited Title II
Regulation .......................................................................................... 28
B.
Verizon Is Contesting the Light-Handed Treatment When
It Had Previously Accepted Harsher Rules .................................... 30
V.
THE OPEN INTERNET RULES FACILITATE FREE SPEECH
AND DO NOT IMPEDE IT ........................................................................ 33
A.
Comparison to Forced Speech Cases Presumes that
Petitioners Make Decisions Today as to What Content
Their Networks Can Access ............................................................. 33
B.
Petitioners’ First Amendment Arguments Are Inconsistent
with the CDA and the DMCA .......................................................... 34
C.
The Order
Advances First Amendment Interests ........................... 36CONCLUSION ....................................................................................................... 37
CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF
APPELLATE PROCEDURE 32(a)(5)-(7) ........................................................... 39
CERTIFICATE OF SERVICE ............................................................................ 40
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TABLE OF AUTHORITIES
Page(s)
CASES
Ad Hoc Telecomms. Users Comm. v. FCC,572 F.3d 903 (D.C. Cir. 2009) ............................................................................ 11
Ashcroft v. ACLU (Ashcroft I),
535 U.S. 564 (2002) ............................................................................................ 36
Ashcroft v. ACLU (Ashcroft II),
542 U.S. 656 (2004) ............................................................................................ 36
Assoc. Press v. United States,
326 U.S. 1 (1945) ................................................................................................ 37
Batzel v. Smith,
333 F.3d 1018 (9th Cir. 2003) ............................................................................ 35
Cablevision Sys. Corp. v. FCC,
649 F.3d 695 (D.C. Cir. 2011) .............................................................. 4, 8, 12, 24
Coal. for Responsible Regulation v. EPA,
684 F.3d 102 (D.C. Cir. 2012) ............................................................................ 26
Cobell v. Salazar,
679 F.3d 909 (D.C. Cir. 2012) ............................................................................ 27
*Comcast Corp. v. FCC,
600 F.3d 642 (D.C. Cir. 2010) ............................................................ 2, 4, 5, 9, 30
FCC v. Fox Television Stations, Inc.,
556 U.S. 502 (2009) ........................................................................................ 9, 10
FCC v. Nat’l Citizens Comm. for Broad.,
436 U.S. 775 (1978) ............................................................................................ 37
Los Angeles v. Preferred Commc’ns, Inc.,
476 U.S. 488 (1986) ............................................................................................ 33
* Authorities upon which we chiefly rely are marked with asterisks.
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*Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992) ........................................................................................ 4, 27
*Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs.,
545 U.S. 967 (2005) ................................................................5, 10, 29, 30, 32, 33
Nuvio Corp. v. FCC,
473 F.3d 302 (D.C. Cir. 2006) ............................................................................ 12
Recording Indus. Ass’n v. Verizon Internet Servs., Inc.,
351 F.3d 1229 (D.C. Cir. 2003) .................................................................... 34, 35
Reno v. ACLU,
521 U.S. 844 (1997) ............................................................................................ 36
Rumsfeld v. Forum for Academic and Institutional Rights, Inc.,
547 U.S. 47 (2006) .............................................................................................. 34
*Turner Broadcasting System, Inc. v. FCC (Turner I),
512 U.S. 622 (1994) ................................................................................ 33, 36, 37
United States v. Am. Library Ass’n.,
539 U.S. 194 (2003) ............................................................................................ 36
United States v. Mead Corp.,
533 U.S. 218 (2001) ............................................................................................ 10
Viacom Int’l v. YouTube, Inc.,
676 F.3d 19 (2d Cir. 2012) ................................................................................. 35
Zeran v. Am. Online, Inc.,
129 F.3d 327 (4th Cir. 1997) .............................................................................. 35
AGENCY PROCEEDINGS
Amendment of Section 64.702 of the Commission’s Rules and Regulations(Computer II), 77 F.C.C. 2d 384 (1980) ............................................................. 31
Amendment of Section 64.702 of the Commission’s Rules and Regulations
(Computer III), 104 F.C.C. 2d 958 (1986) ......................................................... 31
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Annual Assessment of the Status of Competition in the Market for the
Delivery of Video Programming, Fourteenth Report,
27 FCC Rcd. 8610 (2012) ................................................................................... 25
Application of Comcast Corporation, General Electric Company and NBC
Universal, Inc. for Consent to Assign Licenses and Transfer Control of
Licenses, Memorandum Opinion and Order,
26 FCC Rcd. 4238 (2011) ................................................................................... 24
Appropriate Framework for Broadband Access to the Internet over Wireline
Facilities, Report and Order and Notice of Proposed Rulemaking
(Wireline Broadband Order),
20 FCC Rcd. 14853 (2005) ........................................................................... 31-32
Federal Communications Commission Staff Technical Paper, Mobile
Broadband: The Benefits of Additional Spectrum (Oct. 2010), available
at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
302324A1.pdf. .................................................................................................... 14
Petition of the Alliance for Public Technology Requesting Issuance of Notice
of Inquiry and Notice of Proposed Rulemaking to Implement Section 706
of the 1996 Telecommunications Act, Memorandum Opinion and Order,
and Notice of Proposed Rulemaking (Advanced Services Order),
13 FCC Rcd. 24012 (1998) ................................................................................... 9
Preserving the Open Internet, Notice of Proposed Rulemaking,
24 FCC Rcd 13064 (2009) .................................................................................. 22
*Preserving the Open Internet, Report and Order,
25 FCC Rcd. 17905 (2010) ...... 2, 6, 9-10, 13, 16-17, 20, 22-23, 28, 33-34, 36-37
STATUTES
17 U.S.C. § 512 ........................................................................................................ 3547 U.S.C. § 153(51) ................................................................................................. 29
47 U.S.C. § 160(c) ..................................................................................................... 9
47 U.S.C. § 223(e)(1) ............................................................................................... 34
47 U.S.C. § 230(c)(1) ............................................................................................... 34
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47 U.S.C. § 256(c) ..................................................................................................... 8
*47 U.S.C. § 548 .......................................................................................... 23, 24, 26
47 U.S.C. § 549(f) ...................................................................................................... 8
*47 U.S.C. § 1302 ............................................................................2, 8, 9, 10, 11, 23
LEGISLATIVE MATERIALS
S. Rep. No. 104-230 (1996) ..................................................................................... 35The Video Viewer Privacy Protection Act: Protecting Viewer Privacy in the
21st Century: Hearing on H.R. 2471 Before the S. Subcomm. on Privacy,
Technology, and the Law, 112th Cong. 1 (2012) (statement of David
Hyman, General Counsel of Netflix, Inc.) .......................................................... 17
BOOKS AND ARTICLES
Andy Vuong, DISH: FCC May Rule Quickly on Spectrum, Denver Post,Mar. 21, 2012 ...................................................................................................... 21
Chetan Sharma, Managing Growth and Profits in the Yottabyte Era (2009) ......... 19
INTERNET
Angela Moscaritolo, Twitter Turns Six with 140 Million Active Users, PCMagazine (Mar. 21, 2012), http://www.pcmag.com/article2/0,
2817,2401955,00.asp .......................................................................................... 18
AT&T, Laying a Foundation for Growth, AT&T Analyst Conference 2012
(Nov. 7, 2012), available at http://www.att.com/Common/about_us
/files/pdf/analyst_ presentation_c.pdf ................................................................. 16
Cisco Visual Networking Index, Global Mobile Data Traffic Forecast
Update, 2011-2016, http://www.cisco.com/en/US/solutions/
collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf . 14-15
Cisco, White Paper: Cisco Visual Networking Index: Forecast and
Methodology, 2011-2016, available at http://www.cisco.com/en/
US/solutions/collateral/ ....................................................................................... 25
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Deloitte Consulting, The Impact of 4G Technology on Commercial
Interactions, Economic Growth, and U.S. Competitiveness (August
2011), http://www.deloitte.com/assets/Dcom-UnitedStates/Local%
20Assets/Documents/TMT_us
_tmt/us_tmt_impactof4g_edited060612.pdf. ................................................ 15-16
Nielsen, State of the Media: The Cross-Platform Report Q1 2012, available
at http://nielsen.com/us/en/insights/reports-downloads/2012/state-of-the-
media--cross-platform-report-q1-2012.html ....................................................... 25
Sandvine, Global Internet Phenomenon Report (2012),
http://www.sandvine.
com/downloads/documents/Phenomena_1H_2012/Sandvine_Global_
Internet_Phenomena_Report_1H_2012.pdf. ...................................................... 19
Seeking Alpha, MetroPCS Communications Management Discusses Q2
2012 Results—Earnings Call Transcript, available at
http://seekingalpha.com/article/ 752201-metropcs-communications-
management-discusses-q2-2012-results-earnings-call-transcript?page=
5&p=qanda&l=last.............................................................................................. 13
YouTube, Statistics, http://www.youtube.com/t/press_statistics ...................... 18-19
YouTube, Timeline, http://www.youtube.com/t/press_timeline ............................. 18
MISCELLANEOUS
Facebook, Inc., Quarterly Report (Form 10-Q) (Jul. 31, 2012) .............................. 18OTHER AUTHORITIES
Application of Cellco Partnership for Consent to Assign Licenses, WTDocket No. 12-4 (filed Mar. 2, 2012) ................................................................. 13
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GLOSSARY
2 GHz bandFCC licensed radio frequencies used for advanced
terrestrial and satellite mobile telephone and data
services
4G
Fourth Generation
Advanced Services
Petition of the Alliance for Public Technology
Order
Requesting Issuance of Notice of Inquiry and Notice of
Proposed Rulemaking to Implement Section 706 of the
1996 Telecommunications Act, Memorandum Opinion
and Order, and Notice of Proposed Rulemaking, 13
FCC Rcd. 24012 (1998)
Brand X
See Nat. Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967 (2005)
CDA
Communications Decency Act of 1996
Coalition
See Open Internet Coalition
Computer II
Amendment of Section 64.702 of the Commission’s
Rules and Regulations, Final Decision, 77 F.C.C. 2d
384 (1980)
Computer III
Amendment of Section 64.702 of the Commission’s
Rules and Regulations, Report and Order, 104 F.C.C.
2d 958 (1986)
DISH
DISH Network Corporation
DMCA
Digital Millennium Copyright Act
FCC
Federal Communications Commission
Internet Policy
Appropriate Framework for Broadband Access to the
Statement
Internet Over Wireline Facilities, Policy Statement, 20
FCC Rcd. 14986 (2005)
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Intervenors
Open Internet Coalition, Public Knowledge, Vonage
Holdings Corporation, and National Association of
State Utility Consumer Advocates
JA
Joint Appendix
MVPD
Multichannel Video Programming Distributor
NPRM
Preserving the Open Internet, Notice of Proposed
Rulemaking, 24 FCC Rcd. 13064 (2009)
Open Internet Rules
Refers to the rules adopted in the Order below
Order
Preserving the Open Internet, Report and Order, 25
FCC Rcd. 17905 (2010)
Rules
See Open Internet Rules
Section 628
Section 628 of the Telecommunications Act of 1996,
47 U.S.C. § 548
Section 706
Section 706 of the Telecommunications Act of 1996,
47 U.S.C. § 1302
Sling
Sling Media, Inc.
Turner I
Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (1994)
Wireline Broadband
Appropriate Framework for Broadband Access to the
Order
Internet over Wireline Facilities, Report and Order and
Notice of Proposed Rulemaking, 20 FCC Rcd. 14853
(2005)
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STATUTES AND REGULATIONS
Except for 17 U.S.C. § 512 and 47 U.S.C. §§ 160(c), 223(e)(1), 230(c)(1),256(c), 549(f), which are appended to this brief, all applicable statutes and
regulations are contained in the principal parties’ briefs.
STATEMENTS OF THE CASE AND JURISDICTION, QUESTIONS
PRESENTED, AND THE APPLICABLE STANDARD OF REVIEW
Intervenors adopt the Statement of the Case, Statement of Jurisdiction,Questions Presented, and Applicable Standard of Review set forth in the brief for
the Federal Communications Commission and the United States. Resp. Br. at 1-2,
5-18.
SUMMARY OF ARGUMENT
Most of us have come to rely on the Internet to communicate, exchangeideas, engage in commerce, watch videos, and play games. The Internet’s
openness, however, is not a given; it is at its most vulnerable at the gate—the
broadband access pipes that are controlled today by a handful of companies. The
Nation sorely needs additional investment in broadband access to widen this gate.
Such investment would be significantly hampered, however, if the current
gatekeepers could lessen demand for the Internet experience by cherry-picking
favorites among the immense Internet ecosystem. The Open Internet Rules
remove barriers to additional infrastructure investment, and the Intervenors join
their voices to the ample support in the record below for the existence of the link
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between openness of the Internet and investment in broadband access
infrastructure—a link than many of the Coalition’s members and participants have
themselves experienced.
Section 706 of the 1996 Telecommunications Act.
Under Section 706, theFederal Communications Commission (“FCC”) “shall encourage the deployment
on a reasonable and timely basis of advanced telecommunications capability to all
Americans” through methods that “remove barriers to infrastructure investment.”
In this case, where the FCC “shall,” it also follows that it may. The doubt correctly
expressed by this Court in Comcast over the status of Section 706 as an
independent source of authority evaporated when the FCC, in the Order below,
disavowed its earlier dictum that Section 706 does not constitute such a source.
That reading was questionable to begin with, and the FCC has convincingly
reasoned that it was unduly broad.
The main remaining question is whether the Open Internet Rules fulfill
Congress’s intent to remove barriers to infrastructure investment. The answer is
yes. Verizon disparages the link between Internet openness and infrastructure, but
its rhetoric cleverly obscures the fact that it does not deny the link. Verizon only
argues that any connection is tenuous—entering the realm of estimation, in which
the agency enjoys great deference. Nor could Verizon and MetroPCS deny the
connection between Internet openness and infrastructure investment; they have
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both recognized it elsewhere, and indeed, Verizon owes its current dominant
position to it. The impetus for the Fourth Generation (“4G”) cellphone networks
that Verizon and others are currently rolling out in large parts of the country is not
consumers’ demand for more “talk time” on their cell phones. These new
networks are necessitated by the explosive demand for high-speed data services
required to allow users to enjoy Internet content and services, particularly online
video.
Many Coalition members and participants have experienced first-hand both
the explosion in the demand for Internet services and its consequences for
investment in Internet infrastructure. Netflix, for example, has become an online-
video stalwart in only a few years’ time, now providing video services to some 21
million customers nationwide. These rapidly multiplying millions of users cannot
simply show up at Netflix’s doorstep; they must turn to their cable or telephone
companies, which control access to the Internet. By removing a barrier to
investment, the Open Internet Rules have also encouraged and facilitated the
decision of Coalition member DISH, a new entrant in the access business, to make
a multi-billion dollar investment in a new Internet access system.
Section 628 of the Communications Act.
The FCC also has authority topromulgate the Open Internet Rules under the Congressional prohibition on unfair
practices by cable operators that significantly hinder multi-channel video
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distributors from providing programming to consumers. Broadband access
providers such as Comcast and Verizon have the incentive and ability to favor their
own cable distribution arm over their competitors’ services. They can wield an
additional weapon against satellite distributors, such as DISH, who depend on
broadband access to offer interactive services, and so must turn to their chief
competitors for a necessary input to their service. This Court confirmed the broad
reach of the unfair practices prohibition last year in Cablevision.
Questionable Injury of the Petitioners.
Verizon’s and MetroPCS’s centralgrievance appears to be that the Open Internet Rules prevent them from charging
content providers for their content to be available to Verizon’s and MetroPCS’s
customers. Such charges would, of course, mark a seismic shift in today’s mode of
Internet use—a shift that no company would undertake lightly. Verizon and
MetroPCS do not tell the Court that they plan to institute such charges. They only
vaguely talk of “two-sided pricing models”—the same “some day” type of plan
found insufficient to establish sufficient injury in Lujan.
Comcast.
Verizon’s and MetroPCS’s position that the prohibition ondiscrimination is prohibited price cap regulation is also infirm. Among other
reasons, the logical corollary of that theory is that the FCC may impose no rules
whatsoever on broadband access, because any prohibition can be restated as a price
constraint. This pits Verizon and MetroPCS against not only the Supreme Court’s
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Brand X decision, but also against the precedent on which they primarily rely—this
Court’s Comcast decision. The Comcast court held only that Brand X does not
stand for a grant of “plenary authority” over Title I-classified broadband access.
No plenary authority is quite different from no authority at all.
Light-Touch Regulation.
The Open Internet Rules are light compared toenhanced service regulations of the past. Common carriers and their affiliates that
provide enhanced, non-common carrier services have previously been subject to
much stricter treatment than the light-handed Open Internet Rules, without such
services being designated as Title II services. Verizon questions the power of the
FCC to impose the Open Internet Rules, but its predecessor companies had
accepted the FCC’s power to mandate open architecture for their networks and had
even been subject to a walled-off subsidiary requirement for their provision of
enhanced services.
First Amendment.
Verizon’s and MetroPCS’s First Amendment attack onthe Open Internet Rules is undermined by a fundamental tension. Even as it puts
on the mantle of the suppressed speaker here, Verizon claims the protection of
statutes such as the Communications Decency Act of 1996 (“CDA”) as a mere
passive conduit. The First Amendment is not a victim of the Open Internet Rules
but rather their beneficiary; the Rules will help preserve history’s largest-ever free
speech forum.
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ARGUMENT
I.
THE INTERVENORS REPRESENT A BROAD CROSS SECTION OF
INTERNET SERVICE AND CONTENT PROVIDERS, NETWORK
OPERATORS, AND USERS OF INTERNET SERVICES
individuals who commented in its proceeding—including Verizon and
MetroPCS—“agree that the open Internet is an important platform for innovation,
investment, competition, and free expression.” Preserving the Open Internet,
Report and Order, 25 FCC Rcd. 17905, 17909 ¶ 12 (2010) (“Order”) (JA__).
Intervenors represent a diverse range of Internet service and content providers,
network operators, and Internet users who have come to rely on that openness and
the fundamental “end-to-end” network architecture of the Internet. Intervenors are
therefore keen to preserve that openness against threats from the broadband
providers that control American consumers’ and small businesss’ access to the
Internet. The Coalition counts among its members and participants content and
Internet service providers who would not have been household names but for the
platform’s openness, such as Google, Amazon.com, and many other successful
businesses built upon the “innovation without permission” principle. The
Coalition also includes DISH, Netflix, Skype, Vonage, and other companies whose
video, voice, and other services compete directly with those offered by vertically
integrated broadband service providers. Among these, DISH is notable for
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embarking on a multi-billion dollar investment in broadband access, an investment
that was facilitated and encouraged by the Open Internet Rules. Intervenors also
include Public Knowledge and the National Association of State Utility Consumer
Advocates, both of which represent the interests of the Internet-user community.
The Intervenors, including all of the Coalition members and participants,
share the same standing to intervene in support of the Rules. Each would be
injured by the Rules’ absence, and accordingly, each participated in the proceeding
below. It is well-known that consumers today have only one or two broadband
access choices, if they have broadband access at all. In most cases, they can buy
access only from their cable or telephone (wireline or wireless) company. If a
provider decides to discriminate against certain content or ban it altogether,
perhaps because it favors its own content, the losers will be standing on both sides
of the broadband access gate. On the one side, consumers would be deprived of
their choice in content as well as the ability to disseminate their own materials—
the very interactive aspect that has made the Internet a democratic communications
breakthrough. On the other, content providers would be deprived of an
opportunity to reach the audience of their choice, a level playing field in the
provision of information and entertainment, and even their livelihood.
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II.
THE FCC HAS AUTHORITY TO ESTABLISH THE OPEN
INTERNET RULES
A.
The FCC Has Authority Under Section 706 of the
Telecommunications Act of 1996
Section 706 Is an Independent Source of Direct Authority
Section 706 commands that the FCC “shall encourage the deployment” ofbroadband Internet services “on a reasonable and timely basis” through “price cap
regulation, regulatory forbearance, measures that promote competition in the local
telecommunications market or other regulating methods that remove barriers to
infrastructure investment.” 47 U.S.C. § 1302(a) (emphasis added). In this case,
where the FCC “shall,” it follows that the FCC may. This conclusion is buttressed
by the contrast between Section 706 and two other provisions of the same statute,
which specify that nothing in them “shall be construed as expanding” the agency’s
authority. See 47 U.S.C. §§ 256(c), 549(f). Section 706(a), by contrast, is not
tempered by any interpretative rule that would suggest the provision does not
provide the agency with additional power to do what Congress requires. Cf.
Cablevision Sys. Corp. v. FCC, 649 F.3d 695, 710 (D.C. Cir. 2011) (finding that
the lack of limiting language in the definition of “satellite cable programming
vendors” indicated broad FCC authority to regulate them).
The only doubt over the scope and meaning of Section 706 has arisen not
from the language of the statute, but from a dictum found in the FCC’s Advanced
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Services Order. Petition of the Alliance for Public Technology Requesting
Issuance of Notice of Inquiry and Notice of Proposed Rulemaking to Implement
Section 706 of the 1996 Telecommunications Act, Memorandum Opinion and
Order, and Notice of Proposed Rulemaking (Advanced Services Order), 13 FCC
Rcd. 24012, 24047-48 ¶ 77 (1998). There, the FCC had to decide whether Section
706 would authorize regulatory “forbearance” where the requirements of the
specific forbearance provision, 47 U.S.C. § 160(c), were not met. Id. at 24046
¶ 73. In deciding that Section 706 did not provide authority to circumvent the
forbearance provision, the FCC resolved a rather ordinary conflict between two
statutory provisions and reached an unsurprising conclusion, ruling that the
specific one prevailed over the general. But the FCC expressed itself more broadly
than was needed to resolve the question before it: “the most logical statutory
interpretation is that section 706 does not constitute an independent grant of
authority.” Id. at 24047 ¶ 77. A number of years later, this Court in Comcast
observed that, at that time, “the Commission has never questioned, let alone
overruled, that understanding of section 706.” Comcast Corp. v. FCC, 600 F.3d
642, 658 (D.C. Cir. 2010) (quoting FCC v. Fox Television Stations, Inc., 556 U.S.
502, 515 (2009)).
This is no longer the case. In the Order, the FCC has explicitly addressed its
prior treatment of Section 706 and just as explicitly overruled it: “[t]o the extent
9
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the Advanced Services Order can be construed as having read Section 706(a)
differently [than as a source of FCC authority], we reject that reading of the
statute.” Order, 25 FCC Rcd. at 17969 ¶ 119 & n.370 (JA__).
Verizon and MetroPCS discount as perfunctory the Order’s rejection of the
more expansive reading of the Advanced Services Order. Pet. Br. at 32. But no
more needed to be said. Cf. Nat’l Cable & Telecomms. Assoc. v. Brand X Internet
Servs., 545 U.S. 967, 1004 (2005) (Breyer, J., concurring) (citing United States v.
Mead Corp., 533 U.S. 218, 231 (2001)) (noting that there is no specific “formality”
required for an agency’s interpretation to be entitled to deference). Verizon’s and
MetroPCS’s reliance on Justice Kennedy’s concurrence in FCC v. Fox Television
Stations, 556 U.S. 502 (2009), in support of a heightened standard for a change of
agency interpretation is perplexing. Pet. Br. at 32. The majority opinion in Fox
found “no basis in the Administrative Procedure Act or in our opinions for a
requirement that all agency change be subject to more searching review.” Fox, 556
U.S. at 514. Even Justice Kennedy’s concurrence recognized that “[t]he question
whether a change in policy requires an agency to provide a more-reasoned
explanation than when the original policy was first announced is not susceptible
. . . to an answer that applies in all cases.” Fox, 556 U.S. at 535-536 (Kennedy, J.,
concurring). Here, where the agency was not changing policy but simply undoing
10
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the unintended effect of a dictum found in an unrelated order, the FCC’s
explanation was more than adequate.
With the only cloud over Section 706’s nature as a jurisdictional grant
having dissipated, all the stars guiding interpretation of Section 706 have aligned—
its facial meaning, the FCC’s own construction, and this Court’s prior reading of it.
See Ad Hoc Telecomms. Users Comm. v. FCC, 572 F.3d 903, 906 (D.C. Cir. 2009)
(“The general and generous phrasing of § 706 means that the FCC possesses
significant, albeit not unfettered, authority and discretion to settle on the best
regulatory or deregulatory approach to broadband . . . .”).
2.
The Open Internet Rules Remove Barriers to Infrastructure
Investment by Facilitating a Virtuous Cycle of
Infrastructure and Content Investment
Congress asked the FCC to do: remove barriers to infrastructure investment.
Notably, Petitioners never go so far as to say that there is no relationship
whatsoever between assuring that content is not treated in a discriminatory fashion
by broadband providers and investing in infrastructure. Pet. Br. at 28-33. The
“triple cushion shot” rhetoric of Verizon and MetroPCS artfully hides the fact that
their argument is qualified. Verizon and MetroPCS argue only that any
relationship between the two is tenuous. Id. That argument, however, collides
with the great leeway accorded agencies in making predictive judgments. See, e.g.,
11
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Cablevision Sys. Corp. v. FCC, 649 F.3d 695, 716 (D.C. Cir. 2011) (“Although
petitioners’ objections have some force, we believe they are overcome by ‘the
substantial deference we owe the FCC’s predictive judgments.’”) (quoting Nuvio
Corp. v. FCC, 473 F.3d 302, 306 (D.C. Cir. 2006)).
Moreover, both Verizon and MetroPCS have agreed with the FCC’s
reasoning in the past. As the FCC’s brief convincingly explains, both Verizon and
MetroPCS have recognized that consumers’ desire to use high-bandwidth
applications, such as streaming video, leads directly to investment in infrastructure.
Resp. Br. at 39. Indeed, MetroPCS put it succinctly when it told the FCC that the
Internet “is the model of the virtuous cycle: innovators are creating content and
application products that consumers desire, which drives consumers to purchase
from service and equipment providers, which in turn drives investment in the
infrastructure and new technology in response to consumer demand.” MetroPCS
Comments at 16 (JA__).
In addition to the examples from the record, recent pronouncements by both
Petitioners confirm that they still hold a position in tension with the one they
espouse here. As Verizon recently informed the FCC, “it is well documented—
and unchallenged by commenters—that skyrocketing demand for wireless
broadband services requires carriers to accelerate the addition of network capacity
to keep pace with consumer demand.” See Cellco Partnership d/b/a Verizon
12
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Wireless, Joint Opposition to Petitions to Deny and Comments, at 6, filed in
Application of Cellco Partnership for Consent to Assign Licenses, WT Docket No.
12-4 (filed Mar. 2, 2012). It is only a small step to infer that the reason for the
“skyrocketing” is the exponential proliferation of Internet content. MetroPCS has
taken this small step unflinchingly. In an earnings call earlier this year, Roger
Linquist, MetroPCS’s Chairman and Chief Executive Officer, stated that “the
world of data-centric phones and service has brought about the need for substantial
download and upload speeds,” which MetroPCS needed to be able to provide, due
to consumer demand for “YouTube and Pandora and applications as such.”1
These inconsistencies aside, the position expressed on brief by Verizon and
MetroPCS is inaccurate. There is nothing tenuous about the connection between
non-discriminatory online access to content and greater infrastructure investment.
Verizon and MetroPCS themselves have profited from it. And many Coalition
members and participants have had first-hand experience with it. They have based
decisions to embark on significant investments precisely upon the premise of non-
discriminatory access to content and the other prophylactic rules made in the Order
below. Purchasers of broadband access are not interested in empty pipes. They
1 Seeking Alpha, MetroPCS Communications Management Discusses Q2 2012
Results—Earnings Call Transcript, available at http://seekingalpha.com/article/
752201-metropcs-communications-management-discusses-q2-2012-results-
earnings-call-transcript?page= 5&p=qanda&l=last.
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pay Verizon or MetroPCS to access today’s multifarious Internet content, as well
as to communicate their own ideas and information. If demand for the Internet
were to stop growing or to grow more slowly, this would likely deter investment in
new conduits to the Internet.
a)
Broadband Access Providers Have Gained Their
Dominant Position Owing in Large Part to Internet
Openness
for the success of the handful of broadband access providers existing today. The
FCC’s 2010 report on mobile broadband indicates that consumer demand for
mobile data services is expected to “grow between 25 to 50 times” their 2010
levels by 2015, owing to increased consumer demand for information, music,
video, and other multimedia content delivered wherever they are.2 Cisco’s more
recent study of mobile broadband concurs, finding that “[g]lobal mobile data
traffic grew 2.3-fold in 2011, more than doubling for the fourth year in a row,”
with video traffic being the driving force in that growth.3 This growth originated
in the exponentially increasing demand for Internet content, application, e-
2 Federal Communications Commission Staff Technical Paper, Mobile Broadband:
The Benefits of Additional Spectrum 2, 5 (Oct. 2010), available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-302324A1.pdf.
3 Cisco Visual Networking Index, Global Mobile Data Traffic Forecast Update,
2011-2016, at 1, http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/
ns537/ns705/ns827/white_paper_c11-520862.pdf.
14
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commerce, and other service providers. As Cisco’s study further notes, a
“smartphone user adopting Netflix, Pandora, and Facebook will generate more
than twice the volume of traffic generated by a smartphone user adopting only
email and web applications.”4 By the end of June 2010, 61.2 million smartphones
and other wireless-enabled devices were active on carriers’ networks. CTIA
Comments at 6 (JA__).
That demand has increased mobile carrier investment in infrastructure
manifold. In fact, the 4G wireless systems being rolled out by Verizon and AT&T
are a direct progeny of the demand for more bandwidth. This expansion would not
have been undertaken simply to accommodate an increase in the number of
Americans in the census rolls; nor would it be justified by people deciding to spend
more time speaking on their cell phones. There would be no call for such
increased capacity were it not for the need to catch up with consumers’ desire to
access the cornucopia of multimedia content and services on the web. Investment
in 4G networks is expected to range between $25 and $53 billion during 2012-
2016, assuming that the “compounded annual growth rate in mobile data traffic
over the period” is a conservative 41-77 percent.5 That investment is expected to
4 Id. at 11.
5 Deloitte Consulting, The Impact of 4G Technology on Commercial Interactions,
Economic Growth, and U.S. Competitiveness 7 (August 2011), http://www.
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account for $73-151 billion of gross domestic product growth and 371,000-
771,000 new jobs during that period.6 Only a few days ago, on the eve of election
day, AT&T bore out the drift of these projections with a major investment
announcement: To accommodate current and future demand for access to content,
AT&T was spending an additional $14 billion to expand its fourth generation
wireless network buildout so as to cover more than 96 percent of the U.S.
population.7
As is clear from these recent investments, the Order has boosted rather than
deterred infrastructure investments, in line with the FCC’s predictive judgments.
What Verizon and MetroPCS discount as a “daisy chain of speculative inferences”
is in fact one of the levers propelling the U.S. economy out of the still-lingering
economic crisis. Pet. Br. at 30.
b)
Many Coalition Members and Participants Have
Greatly Contributed to the Increased Demand for
Broadband Access
Twitter, and Sling Media, Inc. (“Sling”) can confirm authoritatively that the
deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/TMT_us
_tmt/us_tmt_impactof4g_edited060612.pdf.
6 Id. at 1.
7 AT&T, Laying a Foundation for Growth, AT&T Analyst Conference 2012 (Nov.
7, 2012), available at http://www.att.com/Common/about_us/files/pdf/analyst_
presentation_c.pdf
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increasing demand for their services has contributed greatly to increased demand
for broadband access. Order ¶ 14 n.23 (JA__). Netflix’s online video subscription
service, only four years old, now has more than 21 million users.8 The growth of
online video distribution has led to innovation in the market for IP-enabled
televisions, video game consoles, and other devices. When it filed its initial
comments, Netflix estimated that by the end of 2010 its service would be available
on more than 100 different devices. Netflix Comments at 2 (JA__). By 2012, the
number was 700.9
These millions of viewers cannot knock on Netflix’s door directly. Nor can
they rely on antiquated dial-up access to receive high-quality video. They must
turn to their phone, cable, or cell phone provider for broadband access. Demand
for Netflix and similar services has thus translated directly into increased demand
for and investment in broadband deployment. See John Horrigan, Home
Broadband Adoption 2009, Pew Internet & American Life Project, June 2009, at
23 (noting that residential broadband users are increasingly opting for higher-speed
service); Comcast Comments at 7 (JA__) (“Comcast has invested tens of billions
of dollars in network infrastructure, improvements, and upgrades.”).
8 The Video Viewer Privacy Protection Act: Protecting Viewer Privacy in the 21st
Century: Hearing on H.R. 2471 Before the S. Subcomm. on Privacy, Technology,
and the Law, 112th Cong. 1 (2012) (statement of David Hyman, General Counsel
of Netflix, Inc.).
9 See id.
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The success of Facebook, Twitter, YouTube and many others tells the same
story. Facebook’s user base has grown exponentially, reaching 955 million
monthly active users worldwide in June 2012.10 Of those users, 543 million access
Facebook through mobile devices, with 102 million users relying exclusively on
mobile broadband access.11 Twitter has likewise experienced phenomenal growth.
Started only six years ago, the service now has 140 million monthly active users in
the United States sending 340 million “tweets” each day.12 YouTube officially
launched in December 2005, a few months before Twitter. At that time, users
watched eight million videos each day.13 By May 2010, that number exceeded two
billion.14 Today, users watch more than four billion hours of video on YouTube
each month and upload 72 hours of video every minute.15
The open Internet also permits interaction between services like Facebook
and YouTube, which in turn creates significant value for Internet users. Each day,
10 Facebook, Inc., Quarterly Report (Form 10-Q) at 20 (Jul. 31, 2012).
11 Id. at 22.
12 Angela Moscaritolo, Twitter Turns Six with 140 Million Active Users, PC
Magazine (Mar. 21, 2012), http://www.pcmag.com/article2/0,2817,2401955,
00.asp.
13 YouTube, Timeline, http://www.youtube.com/t/press_timeline.
14 Id.
15 YouTube, Statistics, http://www.youtube.com/t/press_statistics.
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users watch 500 years’ worth of YouTube videos on Facebook.16 YouTube in turn
drives activity on social networks, with 100 million people taking a “social action”
on YouTube (likes, shares, comments, etc.) every week.17 Unsurprisingly,
Facebook and YouTube are two of the top three applications on mobile networks.18
The popularity of those applications and “the opening up of the mobile ecosystem
[to] thousands of developers who are building compelling applications and services
for various mobile platforms” are main drivers of mobile broadband usage and
demand.19 The same is true for fixed broadband. As Comcast has observed in the
proceeding below, “[t]he relationship between broadband ISPs and other creators
of Internet content, applications, and services that benefit from broadband ISPs’
networks is profoundly symbiotic.” Comcast Comments at 10 (JA___).
Sling, a company under joint control with DISH, has also witnessed the
close link between non-discriminatory online access and infrastructure investment.
Sling Comments at 3-11 (JA__). Sling is a combination of software and
equipment that connects a user’s home set-top box, DVR, or DVD player to the
Internet, allowing the viewing of live and recorded television from anywhere in the
16 Id.
17 Id.
18 Sandvine, Global Internet Phenomenon Report (2012), at 8,
http://www.sandvine.com/downloads/documents/Phenomena_1H_2012/Sandvine_
Global_Internet_Phenomena_Report_1H_2012.pdf.
19 Chetan Sharma, Managing Growth and Profits in the Yottabyte Era (2009).
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world—essentially “place shifting” the home television experience to wherever the
user is. See id. at 1-3 (JA__). Sling was able to overcome initial resistance by
Apple and AT&T for inclusion in the iPad platform, Order, 25 FCC Rcd. at 17925
¶ 35 n.107 (JA__), and has been available on the iPad since 2009. Overcoming
this initial barrier has promoted infrastructure investment in two ways. First, the
demand for the Sling equipment has risen many times over, partly due to the
product’s availability on the iPad platform. Second, the consumption of content
through Sling has increased commensurately, driving further demand for access
and inviting greater infrastructure investment.
c)
Fear of Gatekeeper Behavior Would Thwart
Investment in Content
no one buys broadband access for the empty pipes’ own sake. The prospect of
slowing growth in demand, in turn, is a deterrent to new entry. Before making the
substantial investments necessary to build out broadband infrastructure, new access
providers must be certain that the main broadband gatekeepers will not act
unilaterally to constrain artificially the availability of new “edge-based” content
and services. If the main gatekeepers of broadband access prioritize their favored
content, many content providers would be marginalized, stifled, endangered, or
rendered extinct for failure to find funding. Thus, content would be suppressed,
regardless of new entrants in the access business. That would matter little for
20
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incumbent gatekeepers with their established customer bases. But a new network
could become a sports arena without spectators if content did not flow freely
through the main broadband access gatekeepers.
It is the still-burgeoning demand for higher-speed, higher-bandwidth, and
more-ubiquitous broadband Internet access that has facilitated and encouraged the
investment by Coalition member DISH in its own advanced terrestrial network in
the 2 GHz band. As DISH’s Chairman, Charlie Ergen, has said in connection with
the Open Internet Rules: “The new rules give companies, including DISH
Network, the framework to invest capital and manpower in Internet-related
technologies without fear that our investment will be undermined by carriers’
discriminatory practices.” Press Release, DISH Network Corporation (Dec. 21,
2010). Additionally, DISH has declared elsewhere that “America’s need for
mobile broadband services, and the spectrum required to sustain and grow those
services, will increase significantly during the next several years.” DISH
Comments at 2-4, filed in WT Docket No. 12-70; see also Andy Vuong, DISH:
FCC May Rule Quickly on Spectrum, Denver Post, Mar. 21, 2012, at 5B (noting
the increasing importance of DISH’s investment “as consumers’ video-viewing
habits shift from the TV set to smartphones and tablets”).
Removing the potential for unilateral actions by broadband gatekeepers that
could chill investment in edge providers creates the regulatory certainty needed for
21
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continued investment in both infrastructure and edge providers. It reduces risk and
drives investment throughout the Internet ecosystem:
Last-mile network providers, other broadband infrastructure
hardware companies, web overlay content and applications
providers and users all need to know the normative standards,
mechanisms and policies that are appropriate for addressing
network congestion, and which practices are impermissible
because they limit the usefulness and benefits of the Internet
as a whole.
Google Comments at 37 & n.117 (JA__). Indeed, with any “serious risk” of
discriminatory behavior, “the capital markets will not fully fund IP-enabled
services.” Preserving the Open Internet, Notice of Proposed Rulemaking, 24 FCC
Rcd. 13064, 13089 ¶ 63 n.144 (2009) (quoting Legacy AT&T Comments at 54,
filed in WC Docket 04-36) (JA__). Calls to codify the Open Internet Rules grew
largely from a concern that the questionable enforceability of the Internet Policy
Statement created marketplace uncertainty. XO Reply Comments at 5 (JA__).
That concern is well placed. Although the opponents of the Open Internet
Rules claim that the rules are a solution in search of a problem, discriminatory
practices are no longer outliers. Cable modem service providers other than
Comcast and Madison River Communications have “managed” peer-to-peer
traffic. See Order, 25 FCC Rcd. at 17926 ¶ 36 nn.108-10 (citing allegations
against Cox Communications and RCN Corp) (JA__). Similarly, Skype and
Google Voice found their IP-based voice applications blocked on iPhones using
22
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AT&T’s 3G network. Skype Comments at 6 (JA__); Sling Comments at 5 (JA__).
Even Verizon’s brief to this Court heightens the uncertainty by arrogating to
Verizon the “editorial discretion” over the content, applications, and services
available on the Internet. Pet. Br. at 43.
Openness is the “highly successful status quo” on the Internet. Order, 25
FCC Rcd. at 17928 ¶ 39 (JA__). The FCC’s high-level rules merely preserve that
status quo. In so doing, the rules provide much needed certainty at a time when
broadband providers have enhanced incentives and ability to act unilaterally
against edge-based content, application, and service providers. Preserving the
“virtuous cycle” and bringing a measure of certainty to the evolving Internet
ecosystem is well within the FCC’s authority under Section 706.
B.
The FCC Has Regulatory Authority Under Section 628 of the
Telecommunications Act
the FCC’s exercise of its authority under Section 628 of the Communications Act,
the program access provision. Section 628 gives the FCC authority to impose the
requirements of the Order on broadband access providers who are affiliated with
cable operators, including Verizon, whose FiOS service is operated as a cable
system. Section 628(b) prohibits cable operators, such as Verizon, from
“engag[ing] in unfair methods of competition or unfair or deceptive acts or
practices, the purpose or effect of which is to hinder significantly” the distribution
23
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of “satellite cable programming or satellite broadcast programming to subscribers
or consumers.” 47 U.S.C. § 548(b). Section 628(c) prescribes the “minimum
content” of regulations, including prohibitions on discrimination and exclusivity,
but conversely does not set a maximum on the rules that the FCC may make to
prevent unfair practices that meet the elements of Subsection (b). Id. § 548(c).
This Court had occasion to confirm the breadth of the catch-all unfair-
practice prohibition last year. In Cablevision, the Court upheld the FCC’s
authority under that section to prohibit the withholding of programming other than
the “satellite cable programming” mentioned in the provision, so long as that
withholding is “unfair” and has the purpose or effect of significantly hampering an
MVPD from providing satellite cable programming. Cablevision Sys. Corp. v.
FCC, 649 F.3d 695, 719-723 (D.C Cir. 2011).
This is exactly what discriminating against certain online content would
accomplish—it would significantly hinder MVPDs such as DISH from providing
satellite cable programming. The reason is twofold. First, online video has
become a necessary complement of any MVPD service. See Application of
Comcast Corporation, General Electric Company and NBC Universal, Inc. for
Consent to Assign Licenses and Transfer Control of Licenses, Memorandum
Opinion and Order, 26 FCC Rcd. 4238, 4252 ¶ 33 (2011) (noting Comcast’s belief
that online video “is currently a complementary product” to its MVPD service and
24
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that it “is likely to remain so in the future”); Annual Assessment of the Status of
Competition in the Market for the Delivery of Video Programming, Fourteenth
Report, 27 FCC Rcd. 8610, 8721 ¶ 240 (2012) (finding that “most consumers
consider [online video distribution] service to be a complement to . . . their MVPD
service”). The ability to provide video to consumers across platforms has become
increasingly important in the video distribution market. A recent Nielsen report
indicates that the average American currently watches five hours of video a week
using the Internet, a trend that has been steadily increasing.20 This should not be
surprising; the Internet is awash in video content. Cisco, for example, has forecast
that video content (excluding peer-to-peer distribution) will “be 55 percent of all
consumer Internet traffic in 2016, up from 51 percent in 2011.”21 The lion’s share
of consumer data usage, therefore, stems from content that competes in one way or
another with cable television services.
Second, because satellite television (in contrast with cable television) is one-
way and does not allow interactivity, satellite television providers like DISH rely
on broadband Internet access to provide on-demand content to their subscribers.
20 Nielsen, State of the Media: The Cross-Platform Report Q1 2012, at 2, available
at http://nielsen.com/us/en/insights/reports-downloads/2012/state-of-the-media--
cross-platform-report-q1-2012.html.
21 Cisco, White Paper: Cisco Visual Networking Index: Forecast and Methodology,
2011-2016, at 2, available at http://www.cisco.com/en/US/solutions/collateral/
ns341/ns525/ns537/ns705/ ns827/white_paper_c11-481360.pdf.
25
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This broadband service is often purchased from a competing cable operator with
which the satellite distributor has to compete. DISH Comments at 1 (JA _). The
potential market manipulation by cable operators who wear both hats through the
blocking or throttling of competing services and content is precisely the kind of
unfair practice that thwarts competition and that Section 628(b) was created to
prevent.
III. THE INJURY OF VERIZON AND METROPCS FROM THE RULES
IS QUESTIONABLE
Verizon and MetroPCS must “demonstrate an ‘injury in fact’ that is fairlytraceable to the challenged action and is likely to be redressed by a favorable
judicial decision.” Coal. for Responsible Regulation v. EPA, 684 F.3d 102 (D.C.
Cir. 2012). While there is no question that the rules solve a real problem and
prevent Internet access providers from engaging in behavior that has been observed
in the past, Verizon’s and MetroPCS’s injuries from the Open Internet Rules
remain highly speculative. Stated simply, Verizon and MetroPCS are requesting a
freedom from the Rules even as the record shows no plan on their part to use the
hoped-for freedom. To read Verizon’s and MetroPCS’s brief, their central
complaint is that the Rules prevent them from charging content providers for
consumers to receive their content (or, presumably, receiving it with certain
priority, quality, etc.). See, e.g., Pet. Br. at 17-18. But the record is devoid of any
26
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plan by Verizon or MetroPCS to start imposing such charges. All that they say is
that the rules foreclose “two-sided pricing models.” Pet. Br. at 9, 17, 26.
A “pay to play” structures would be a radical change to Internet access
service as we know it. Charging content providers (who range from news
organizations to backroom bloggers), for example, would substantially impair the
current incarnation of the Internet as a platform for the free dissemination of ideas.
Neither Verizon nor MetroPCS would likely undertake such drastic measures
lightly.
“‘[S]ome day’ intentions—without any description of concrete plans, or
indeed even any specification of when the some day will be—do not support a
finding of the ‘actual or imminent’ injury that our cases require.” Lujan v.
Defenders of Wildlife, 504 U.S. 555, 564 (1992).22 Here, the “two-sided pricing
models” whose unavailability due to the Rules is at the core of Verizon’s and
MetroPCS’s grievance are no more than a “some day” intention of the kind the
Lujan Court judged inadequate.
This is not to say that broadband access providers lack the incentive and
ability to engage in the behavior that the rules prohibit. The record amply supports
22 A party must also have standing for each claim it makes. See Cobell v. Salazar,
679 F.3d 909, 919 (D.C. Cir. 2012).
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the FCC’s conclusion that they have both.23 Nor does an agency need to wait for
the wrong to have been committed on a massive scale before it acts to curb it,
particularly when the record contains more than enough instances of such behavior
to persuade the FCC that the Rules are not guarding against mere improbabilities.
Nonetheless, Verizon and MetroPCS must still describe their plans that the rules
prevent them from implementing, and explain to the FCC why those plans should
not be prohibited. Without such an openly avowed plan, it is not clear that Verizon
and MetroPCS should be allowed past this Court’s doorstep.
IV.
THE OPEN INTERNET RULES ARE PERMISSIBLE LIGHT-
HANDED REGULATION WITHOUT NEED TO RECLASSIFY
BROADBAND ACCESS UNDER TITLE II
A.
The Open Internet Rules Are Not Prohibited Title II Regulation
Verizon and MetroPCS contend that the Open Internet Rules are merelyTitle II regulation in disguise. Their chief argument is that, by prohibiting them
from discriminating among Internet traffic, the rules effectively cap the price they
can charge edge providers at zero. As the FCC’s brief demonstrates, Petitioners’
argument is incoherent. It suggests that edge providers, not broadband Internet
subscribers, are its actual customers. Resp. Br. at 62-63.
23 Indeed, the FCC has put forward persuasive economic models establishing that
end providers such as Verizon and MetroPCS have both the opportunity and
incentive to throttle broadband Internet access. Order, 25 FCC Rcd. at 17915-24
¶¶ 20-34 (JA__).
28
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Moreover, if the argument were correct, it could turn nearly any FCC
prohibition on conduct into rate regulation that sets the price of not violating that
prohibition at zero. For example, the FCC’s use of its Title III authority to prohibit
Verizon or MetroPCS from using a cellular tower to broadcast above a certain
frequency suddenly becomes Title II rate regulation that sets the price for not
causing interference at zero. Or the required carriage of closed captioning
information could be described as mandating “zero-rate” pricing for closed
captioning. Using this legerdemain, almost any rule could be contorted and recast
into one resembling Title II regulation.
The resulting absurdities, which Verizon and MetroPCS would have this
Court validate, are the consequence of misreading the Communications Act. In
defining “telecommunications,” the Telecommunications Act of 1996 instructs the
FCC that a “telecommunications carrier shall be treated as a common carrier under
this chapter only to the extent that it is engaged in providing telecommunications
services.” 47 U.S.C. § 153(51). Petitioners would draw from this definition the
lesson that the FCC is prohibited from instituting any regulation on non-Title II
services that can be articulated, though whatever machinations, in common-carrier
terms. Such a leap from the statutory text was not the intent of Congress.
Indeed, Verizon’s and MetroPCS’s position pits them against not only the
Supreme Court’s decision in Brand X, but also the very decision upon which the
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position relies, this Court’s decision in Comcast. In interpreting Brand X, the
Comcast Court readily recognized that, under Brand X, some authority to impose
rules on non-Title II Internet access services did exist. The Comcast Court
distinguished Brand X only on the ground that the Supreme Court’s decision does
not afford the FCC “plenary authority” over Internet access providers. Comcast v.
FCC, 600 F.3d 642, 650 (D.C. Cir. 2010). No “plenary authority” is vastly
different than no authority at all.
B.
Verizon Is Contesting the Light-Handed Treatment When It Had
Previously Accepted Harsher Rules
enhanced services in the past. Common carriers providing enhanced services
(which both Verizon and MetroPCS are) have been subjected to much heavier
rules without any need to “reclassify” Internet access service and bring it into the
tent of Title II. Verizon’s predecessor companies in fact had been subject to
stringent regulation for years in their provision of non-common carrier
(“enhanced”) services, without questioning the FCC’s authority to mete out that
treatment.
Computer II and Computer III are instructive here. Those decisions did not
classify enhanced services under Title II, but they nonetheless imposed heavy
conditions on the provision of such services by affiliates of Title II common
carriers. Computer II even imposed a requirement of “maximum” separation
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between the portions of Verizon’s business that were selling “enhanced” services
from those selling “basic” services—requiring a “separate corporate entity with
separate accounts, officers, personnel, equipment, and facilities.” Appropriate
Framework for Broadband Access to the Internet over Wireline Facilities, Report
and Order and Notice of Proposed Rulemaking (Wireline Broadband Order), 20
FCC Rcd. 14853, 14867 ¶ 22 n.58 (2005) (citing Amendment of Section 64.702 of
the Commission’s Rules and Regulations (Computer II), 77 F.C.C. 2d 384, 391 n.2
(1980)).
While the FCC relaxed these requirements in Computer III, the lighter
conditions were still stringent compared to the rules in question here: Verizon was
required to offer to other enhanced services providers the same basic services it
used in providing its own enhanced services (known as “comparably efficient
interconnection”), until it was able to develop an FCC-approved open network
architecture plan that offered unbundled elements of its basic service to other
enhanced service providers. Id. at 14870-71 ¶ 28.24 Notably, the Bell Operating
Companies (including Verizon’s predecessors) did not question the FCC’s
authority to impose that regime. Indeed, they welcomed it, precisely because it
was lighter than the separation requirement that had preceded it. See Amendment
24 The Computer II requirements were removed in 2005 in the FCC’s Wireline
Broadband Order, 20 FCC Rcd. 14853, 14876 ¶ 41 (2005).
31
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of Section 64.702 of the Commission’s Rules and Regulations (Computer III), 104
F.C.C. 2d 958, 993 ¶ 58 (1986) (“[The Bell Operating Companies] contend that it
would be proper for the Commission to . . . replace [the Computer II] requirements
with appropriate nonstructural safeguards.”).
Verizon thus finds itself arguing that the FCC lacks the power to do much
less than it had the power to do, and did, under essentially the same statutory
requirement. See Nat. Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545
U.S. 967, 992 (2005) (noting that the “terms ‘telecommunications service’ and
‘information service’ substantially incorporate” the FCC’s prior terms “basic” and
“enhanced” services).
And this describes just what the FCC has done (and could still do if it acts in
a reasoned manner) without reclassifying the service. Taking a more stringent
approach by reclassifying broadband Internet access as a telecommunications
service would also have been well within the FCC’s authority, and a decision to do
so would have enjoyed considerable deference, as the Supreme Court’s decision in
Brand X demonstrates. See, e.g., id. at 1003 (Breyer, J., concurring) (noting that
the FCC’s interpretation had been upheld, “though perhaps just barely”) (emphasis
added). Indeed, the FCC has never conceded that Verizon’s broadband service
could not be classified as a Title II service, only that it was “eligible for a lighter
regulatory touch.” See Wireline Broadband Order, 20 FCC Rcd. at 14856 ¶ 3.
32
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And as noted above, the difference between these classifications is merely whether
the service is “subject to mandatory common-carrier regulation under Title II” or
other, potentially lesser “regulatory obligations under [the FCC’s] Title I ancillary
jurisdiction.” Brand X, 545 U.S. at 976 (emphasis added).
V.
THE OPEN INTERNET RULES FACILITATE FREE SPEECH AND
DO NOT IMPEDE IT
A.
Comparison to Forced Speech Cases Presumes that Petitioners
Make Decisions Today as to What Content Their Networks Can
Access
MetroPCS rely on Turner I and other compelled speech cases. Pet. Br. at 42-47
(citing Turner Broad. Sys., Inc. v. FCC (Turner I), 512 U.S. 622 (1994)). As the
Order recognizes, the “critical factor” in Turner I that “made cable operators
‘speakers’ was their production of programming and their exercise of ‘editorial
discretion over which programs and stations to include’ (and thus which to
exclude).” Order, 25 FCC Rcd. at 17924 ¶ 140 (quoting Turner I, 512 U.S. at 636)
(citing Los Angeles v. Preferred Commc’ns, Inc., 476 U.S. 488, 494 (1986))
(JA__). By invoking Turner I, Verizon and MetroPCS arrogate to themselves the
role of the Internet’s “speaker” or “editor,” making decisions about what content
does and does not travel over its network. Thus, their argument that the Order
“strip[s] them of control over the transmission,” Pet. Br. at 3, rests on a
33
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 49 of 65
presumption that they are at present making those decisions and controlling their
users’ traffic.
This presumption of control is inconsistent with Verizon’s contention
elsewhere that operating a broadband network amounts “to an ISP acting as a mere
conduit for the transmission of information sent by others.” Recording Indus.
Ass’n v. Verizon Internet Servs., Inc., 351 F.3d 1229, 1237 (D.C. Cir. 2003)
(“RIAA”). Verizon’s description of its role in RIAA makes clear that broadband
access is a conduit, not a microphone. See Pet. Br. at 12. Accordingly, as with the
regulation at issue in Rumsfeld v. Forum for Academic and Institutional Rights,
Inc., the Order “regulates conduct, not speech,” 547 U.S. 47, 60 (2006), making
Turner I and other compelled speech cases inapposite.
B.
Petitioners’ First Amendment Arguments Are Inconsistent with
the CDA and the DMCA
access providers are not the speakers of their customers’ or content providers’
words. The CDA clearly states that a broadband access provider is not liable for
providing access that “does not include the creation of the content of the
communication,” and that “[n]o user of an interactive computer service shall be
treated as the publisher or speaker of any information provided by another
information content provider.” 47 U.S.C. §§ 223(e)(1), 230(c)(1). Congress
explicitly created the CDA to exclude service providers from being considered
34
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 50 of 65
publishers who take responsibility for the content they convey. S. Rep. No. 104-
230, at 194 (1996). Far from restricting speech, this distinction between speaker
and service provider protects free speech. See, e.g., Zeran v. Am. Online, Inc., 129
F.3d 327, 330 (4th Cir. 1997); Batzel v. Smith, 333 F.3d 1018, 1027 (9th Cir.
2003).
The safe harbor provisions of the DMCA similarly insulate providers of
“digital online communications,” such as Verizon, from any liability as a result of
their users’ infringement. 17 U.S.C. § 512. The limitation on liability is expressly
conditioned upon the provider, inter alia, (1) not selecting the material it is
transmitting, routing, connecting, or storing, and (2) not selecting the recipients of
the material. Verizon qualifies for, and has notably claimed, this limitation on
liability itself. RIAA, 351 F.3d at 1233. By availing itself of the DMCA safe
harbor, Verizon distances itself from the speech of its users; it does not generate,
edit, cull or select the recipients for that speech. Internet service providers can
engage in conduct beyond “conduit only” functions and still enjoy protection under
the DMCA. Viacom Int’l v. YouTube, Inc., 676 F.3d 19, 39 (2d Cir. 2012).25
However, the record contains no evidence of Verizon engaging in conduct that
25 Of course, if Verizon or any other service provider were engaging in the
selection of content and editorial decisions about how that content should be
displayed to users when offering broadband service, then that is a very different
question in terms of applicability of the First Amendment. We take no position on
that question here.
35
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would render it the “speaker” or “editor” with respect to its users’ or content
providers’ expressive activity.
C.
The Order
Advances First Amendment InterestsThe First Amendment is not the Open Internet Rules’ victim; it is their
beneficiary. Where the Supreme Court has considered the Internet, it has had no
trouble identifying the primary First Amendment rights and interests involved as
belonging to the network users. Reno v. ACLU, 521 U.S. 844, 862 (1997); see also
Ashcroft v. ACLU (Ashcroft I), 535 U.S. 564 (2002); Ashcroft v. ACLU (Ashcroft
II), 542 U.S. 656 (2004); United States v. Am. Library Ass’n., 539 U.S. 194 (2003).
In these cases, the Court identified the Internet as a “new marketplace of ideas” for
online content providers and Internet users. Reno, 521 U.S. at 885. As a result, the
Court has rejected statutory provisions that “effectively suppress[] a large amount
of speech that adults have a constitutional right to receive,” id. at 874 (emphasis
added), as well as content that “noncommercial speakers” and commercial
producers want to transmit, id. at 881.
As Turner I affirmed, “assuring that the public has access to a multiplicity of
information sources is a governmental purpose of the highest order, for it promotes
values central to the First Amendment.”26 Threats to that access can come from
26 Order, 25 FCC Rcd. at 17984 ¶ 146 (quoting Turner I, 512 U.S. at 662) (JA__).
“Indeed, it has long been a basic tenet of national communications policy that the
widest possible dissemination of information from diverse and antagonistic sources
36
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 52 of 65
non-governmental as well as governmental entities. In either case, First
Amendment interests are implicated. See Assoc. Press v. United States, 326 U.S.
1, 20 (1945) (“Surely a command that the government itself shall not impede the
free flow of ideas does not afford non-governmental combinations a refuge if they
impose restraints upon that constitutionally guaranteed freedom.”). By assuring
that the Internet’s free flow of ideas remains unimpeded, the Order advances the
First Amendment interests of the Internet’s users.
CONCLUSION
For the reasons stated herein, the petition for review should be denied.
Respectfully Submitted,
/s/ Henry Goldberg_________
Henry Goldberg
GOLDBERG, GODLES, WIENER &
WRIGHT
1229 Nineteenth Street, NW
Washington, DC 20036
(202) 429-4900
hgoldberg@g2w2.com
Counsel for Open Internet Coalition
is essential to the welfare of the public.” Turner I, 512 U.S. at 663; see also FCC
v. Nat’l Citizens Comm. for Broad., 436 U.S. 775, 795 (1978).
37
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 53 of 65
Pantelis Michalopoulos
Kurt Matthew Rogers
Stephanie A. Roy
Brendan Daniel Kasper
Andrew W. Guhr
VONAGE HOLDINGS
STEPTOE & JOHNSON LLP
CORPORATION
1330 Connecticut Avenue, NW
23 Main Street
Washington, DC 20036
Holmdel, NJ 07333
(202) 429-3000
(732) 528-2600
Counsel for Open Internet Coalition
David C. Bergmann
Sherwin Siy
NATIONAL ASSOCIATION OF
PUBLIC KNOWLEDGE
STATE UTILITY CONSUMER
1818 N Street, NW, Suite 410
ADVOCATES
Washington, DC 20036
3293 Noreen Drive
(202) 861-0020
Columbus, OH 43221-4568
(614) 771-5979
November 15, 2012
38
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 54 of 65
CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF
APPELLATE PROCEDURE 32(a)(5)-(7)
This brief complies with the type-volume limitation of Circuit Rule32(a)(2)(B)(i) because it contains 8,307 words, excluding the parts of the brief
exempted by Circuit Rule 32(a)(1), as determined by the word-counting feature of
Microsoft Word.
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because it has
been prepared in a proportionally spaced typeface using Microsoft Word in 14-
point Times New Roman.
/s/ Henry Goldberg_________
Henry Goldberg
39
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 55 of 65
CERTIFICATE OF SERVICE
I hereby certify that, pursuant to D.C. Circuit Rule 25(c), service of theforegoing will be made electronically via CM/ECF system upon the following
counsels of record this 15th day of November 2012. Participants in the case who
are registered CM/ECF users will be served by the CM/ECF system. Others,
marked with an asterisk, will receive service by mail unless another attorney for
the same party is receiving service through CM/ECF.
Helgi C. Walker
Carl W. Northrop
William S. Consovoy
Michael Lazarus
Eve Klindera Reed
Andrew Morentz
Brett A. Shumate
Telecommunications Law
Wiley Rein LLP
Professionals PLLC
1776 K Street, NW
875 15th Street, NW, Suite 750
Washington, DC 20006
Washington, DC 20005
Counsel for Verizon
Counsel for MetroPCS
Michael E. Glover
Mark A. Stachiw
Edward Shakin
General Counsel, Secretary & Vice
William H. Johnson
Chairman
Verizon
MetroPCS Communications, Inc.
1320 North Courthouse Road,
2250 Lakeside Blvd.
9th Floor
Richardson, TX 75082
Arlington, VA 22201
Stephen B. Kinnaird
John T. Scott, III
Paul, Hastings, Janofsky &
Verizon Wireless
Walker LLP
1300 I Street, NW
875 15th Street, NW
Suite 400 West
Washington, DC 20005
Washington, DC 20005
Counsel for MetroPCS
Counsel for Verizon
40
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 56 of 65
Walter E. Dellinger
*Sean Lev
Brianne Gorod
Peter Karanjia
Anton Metlitsky
Jacob M. Lewis
O’Melveny & Myers LLP
Richard K. Welch
1625 Eye Street, NW
Joel Marcus
Washington, DC 20006
Federal Communications Commission
Counsel for Verizon
445 12th Street, SW
Washington, DC 20554
Samir C. Jain
Wilmer Cutler Pickering, et al.
Nancy C. Garrison
1875 Pennsylvania Avenue, NW
Catherine G. O’Sullivan
Washington, DC 20006
Robert J. Wiggers
Counsel for Verizon
U.S. Department of Justice
Antitrust Div., Appellate, Rm. 3224
Genevieve Morelli
950 Pennsylvania Avenue, NW
Independent Telephone &
Washington, DC 20530-0001
Telecommunications Alliance
Counsel for the United States
1101 Vermont Avenue, N.W.,
Suite 501
R. Craig Lawrence
Washington, DC 20005
U.S. Attorney’s Office
555 4th Street, NW
Michael F. Altschul
Washington, DC 20530
CTIA – The Wireless Association®
Counsel for the United States
1400 16th Street, NW, Suite 600
Washington, DC 20036
John P. Elwood
Eric A. White
Matthew F. Wood
Vinson & Elkins LLP
Free Press
2200 Pennsylvania Avenue, NW,
1025 Connecticut Avenue, NW,
Suite 500 West
Suite 1110
Washington, DC 20037
Washington, DC 20036
Counsel for the Cato Institute,
Competitive Enterprise Institute, Free
James Ramsay
State Foundation, and TechFreedom
National Association of Regulatory
Utility Commissioners
Andrew Jay Schwartzman
1101 Vermont Avenue, NW,
2000 Pennsylvania Avenue, NW
Suite 200
Suite 4300
Washington, DC 20005
Washington, DC 20006
Counsel for Amicus Tim Wu
40
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 57 of 65
Jonathan E. Nuechterlein
Reed Hundt
Elvis Stumbergs
Tyrone Brown
Heather M. Zachary
Michael Copps
Wilmer Cutler Pickering Hale &
Nicholas Johnson
Dorr, LLP
Susan Crawford
1875 Pennsylvania Avenue, NW
National Association of
Washington, DC 20006-1420
Telecommunications Officers and
Counsel for CTIA – The Wireless
Advisors
Association®
Sean H. Donahue
Donahue & Goldberg, LLP
E. Duncan Getchell, Jr.
2000 L St., NW, Suite 808
Wesley Glenn Russell, Jr.
Washington, D.C. 20036
Office of the Attorney General
900 East Main Street
Russell P. Hanser
Richmond, VA 23219
Bryan N. Tramont
Counsel for the Commonwealth of
Wilkinson Barker Knauer, LLP
Virginia
2300 N Street, N.W.
Suite 700
*Sam Kazman
Washington, DC 20037
Competitive Enterprise Institute
(202) 783-4141
1899 L Street, NW
Counsel for the National Association
12th Floor
of Manufacturers
Washington, DC 20036
John Blevins
Quentin Riegel
Loyola University New Orleans
National Association of Manufacturers
College of Law
733 10th Street, N.W.
7214 St. Charles Ave, Box 901
Suite 700
New Orleans, LA 70118
Washington, DC 20001
Counsel for Amici Internet Engineers
(202) 637-3058
and Technologists
*Randolph J. May
Free State Foundation
P.O. Box 60680
Potomac, MD 20859
Dated: November 15, 2012
/s/ Henry Goldberg_________
Henry Goldberg
41
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STATUTORY ADDENDUM
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 59 of 65
TABLE OF CONTENTS
Page
17 U.S.C. § 512 .......................................................................................................... 147 U.S.C. § 160(c) ..................................................................................................... 4
47 U.S.C. § 223(e)(1)................................................................................................. 5
47 U.S.C. § 230(c)(1)................................................................................................. 5
47 U.S.C. § 256(c) ..................................................................................................... 6
47 U.S.C. § 549(f) ...................................................................................................... 6
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 60 of 65
17 U.S.C. § 512
(a) Transitory Digital Network Communications.—A service provider shall
not be liable for monetary relief, or, except as provided in subsection (j), for
injunctive or other equitable relief, for infringement of copyright by reason
of the provider's transmitting, routing, or providing connections for, material
through a system or network controlled or operated by or for the service
provider, or by reason of the intermediate and transient storage of that
material in the course of such transmitting, routing, or providing
connections, if—
(1) the transmission of the material was initiated by or at the direction
of a person other than the service provider;
(2) the transmission, routing, provision of connections, or storage is
carried out through an automatic technical process without selection
of the material by the service provider;
(3) the service provider does not select the recipients of the material
except as an automatic response to the request of another person;
(4) no copy of the material made by the service provider in the course
of such intermediate or transient storage is maintained on the system
or network in a manner ordinarily accessible to anyone other than
anticipated recipients, and no such copy is maintained on the system
or network in a manner ordinarily accessible to such anticipated
recipients for a longer period than is reasonably necessary for the
transmission, routing, or provision of connections; and
(5) the material is transmitted through the system or network without
modification of its content.
(b) System Caching.—
(1) Limitation on liability.—A service provider shall not be liable for
monetary relief, or, except as provided in subsection (j), for injunctive
or other equitable relief, for infringement of copyright by reason of
the intermediate and temporary storage of material on a system or
network controlled or operated by or for the service provider in a case
in which—
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(A) the material is made available online by a person other than
the service provider;
(B) the material is transmitted from the person described in
subparagraph (A) through the system or network to a person
other than the person described in subparagraph (A) at the
direction of that other person; and
(C) the storage is carried out through an automatic technical
process for the purpose of making the material available to
users of the system or network who, after the material is
transmitted as described in subparagraph (B), request access to
the material from the person described in subparagraph (A),
if the conditions set forth in paragraph (2) are met.
(2) Conditions.—The conditions referred to in paragraph (1) are
that—
(A) the material described in paragraph (1) is transmitted to the
subsequent users described in paragraph (1)(C) without
modification to its content from the manner in which the
material was transmitted from the person described in
paragraph (1)(A);
(B) the service provider described in paragraph (1) complies
with rules concerning the refreshing, reloading, or other
updating of the material when specified by the person making
the material available online in accordance with a generally
accepted industry standard data communications protocol for
the system or network through which that person makes the
material available, except that this subparagraph applies only if
those rules are not used by the person described in paragraph
(1)(A) to prevent or unreasonably impair the intermediate
storage to which this subsection applies;
(C) the service provider does not interfere with the ability of
technology associated with the material to return to the person
described in paragraph (1)(A) the information that would have
been available to that person if the material had been obtained
by the subsequent users described in paragraph (1)(C) directly
2
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from that person, except that this subparagraph applies only if
that technology—
(i) does not significantly interfere with the performance
of the provider's system or network or with the
intermediate storage of the material;
(ii) is consistent with generally accepted industry
standard communications protocols; and
(iii) does not extract information from the provider's
system or network other than the information that would
have been available to the person described in paragraph
(1)(A) if the subsequent users had gained access to the
material directly from that person;
(D) if the person described in paragraph (1)(A) has in effect a
condition that a person must meet prior to having access to the
material, such as a condition based on payment of a fee or
provision of a password or other information, the service
provider permits access to the stored material in significant part
only to users of its system or network that have met those
conditions and only in accordance with those conditions; and
(E) if the person described in paragraph (1)(A) makes that
material available online without the authorization of the
copyright owner of the material, the service provider responds
expeditiously to remove, or disable access to, the material that
is claimed to be infringing upon notification of claimed
infringement as described in subsection (c)(3), except that this
subparagraph applies only if—
(i) the material has previously been removed from the
originating site or access to it has been disabled, or a
court has ordered that the material be removed from the
originating site or that access to the material on the
originating site be disabled; and
(ii) the party giving the notification includes in the
notification a statement confirming that the material has
been removed from the originating site or access to it has
been disabled or that a court has ordered that the material
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be removed from the originating site or that access to the
material on the originating site be disabled.
(c) Information Residing on Systems or Networks At Direction of Users.—
(1) In general.—A service provider shall not be liable for monetary
relief, or, except as provided in subsection (j), for injunctive or other
equitable relief, for infringement of copyright by reason of the storage
at the direction of a user of material that resides on a system or
network controlled or operated by or for the service provider, if the
service provider—
(A)
(i) does not have actual knowledge that the material or an
activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of
facts or circumstances from which infringing activity is
apparent; or
(iii) upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the
infringing activity, in a case in which the service provider has the
right and ability to control such activity; and
(C) upon notification of claimed infringement as described in
paragraph (3), responds expeditiously to remove, or disable access to,
the material that is claimed to be infringing or to be the subject of
infringing activity.
***
47 U.S.C. § 160(c)
***
(c) Petition for forbearance
Any telecommunications carrier, or class of telecommunications carriers,
may submit a petition to the Commission requesting that the Commission
exercise the authority granted under this section with respect to that carrier
or those carriers, or any service offered by that carrier or carriers. Any such
4
USCA Case #11-1355 Document #1405312 Filed: 11/15/2012 Page 64 of 65
petition shall be deemed granted if the Commission does not deny the
petition for failure to meet the requirements for forbearance under
subsection (a) of this section within one year after the Commission receives
it, unless the one-year period is extended by the Commission. The
Commission may extend the initial one-year period by an additional 90 days
if the Commission finds that an extension is necessary to meet the
requirements of subsection (a) of this section. The Commission may grant or
deny a petition in whole or in part and shall explain its decision in writing.
***
47 U.S.C. § 223(e)(1)
***
(e) Defenses
In addition to any other defenses available by law:
(1) No person shall be held to have violated subsection (a) or (d) of this
section solely for providing access or connection to or from a facility,
system, or network not under that person's control, including transmission,
downloading, intermediate storage, access software, or other related
capabilities that are incidental to providing such access or connection that
does not include the creation of the content of the communication.
***
47 U.S.C. § 230(c)(1)
***
(c) Protection for “Good Samaritan” blocking and screening of offensive material
(1) Treatment of publisher or speaker
No provider or user of an interactive computer service shall be treated as the
publisher or speaker of any information provided by another information
content provider.
***
5
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47 U.S.C. § 256(c)
***
(c) Commission’s authority
Nothing in this section shall be construed as expanding or limiting any
authority that the Commission may have under law in effect before February
8, 1996.
***
47 U.S.C. § 549(f)
***
(f) Commission’s authority
Nothing in this section shall be construed as expanding or limiting any
authority that the Commission may have under law in effect before February
8, 1996.
***
6
Document Outline
- CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES
- CORPORATE DISCLOSURE STATEMENTS
- OPEN INTERNET COALITION
- PUBLIC KNOWLEDGE
- VONAGE HOLDINGS CORPORATION
- NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
- TABLE OF AUTHORITIES
- GLOSSARY
- STATUTES AND REGULATIONS
- STATEMENTS OF THE CASE AND JURISDICTION, QUESTIONS PRESENTED, AND THE APPLICABLE STANDARD OF REVIEW
- SUMMARY OF ARGUMENT
- ARGUMENT
- I. THE INTERVENORS REPRESENT A BROAD CROSS SECTION OF INTERNET SERVICE AND CONTENT PROVIDERS, NETWORK OPERATORS, AND USERS OF INTERNET SERVICES
- II. THE FCC HAS AUTHORITY TO ESTABLISH THE OPEN INTERNET RULES
- A. The FCC Has Authority Under Section 706 of the Telecommunications Act of 1996
- 1. Section 706 Is an Independent Source of Direct Authority
- 2. The Open Internet Rules Remove Barriers to Infrastructure Investment by Facilitating a Virtuous Cycle of Infrastructure and Content Investment
- a) Broadband Access Providers Have Gained Their Dominant Position Owing in Large Part to Internet Openness
- b) Many Coalition Members and Participants Have Greatly Contributed to the Increased Demand for Broadband Access
- c) Fear of Gatekeeper Behavior Would Thwart Investment in Content
- B. The FCC Has Regulatory Authority Under Section 628 of the Telecommunications Act
- A. The FCC Has Authority Under Section 706 of the Telecommunications Act of 1996
- III. THE INJURY OF VERIZON AND METROPCS FROM THE RULES IS QUESTIONABLE
- IV. THE OPEN INTERNET RULES ARE PERMISSIBLE LIGHT-HANDED REGULATION WITHOUT NEED TO RECLASSIFY BROADBAND ACCESS UNDER TITLE II
- A. The Open Internet Rules Are Not Prohibited Title II Regulation
- B. Verizon Is Contesting the Light-Handed Treatment When It Had Previously Accepted Harsher Rules
- V. THE OPEN INTERNET RULES FACILITATE FREE SPEECH AND DO NOT IMPEDE IT
- A. Comparison to Forced Speech Cases Presumes that Petitioners Make Decisions Today as to What Content Their Networks Can Access
- B. Petitioners First Amendment Arguments Are Inconsistent with the CDA and the DMCA
- C. The Order Advances First Amendment Interests
- CONCLUSION
- CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a)(5)-(7)
- CERTIFICATE OF SERVICE
- Open Internet Brief--Statutory Addendum.pdf
- 17 U.S.C. 512
- 47 U.S.C. 160(c)
- 47 U.S.C. 223(e)(1)
- 47 U.S.C. 230(c)(1)
- 47 U.S.C. 256(c)
- 47 U.S.C. 549(f)
Edoc Internal Id:
317414
Released On:
Wed, 2012-11-14 19:00
Published On:
November 15 2012
Adopted Date:
Wed, 2012-11-14 19:00
Edoc ID:
DOC-317414
