United States Telecom Ass'n v. Federal Communications Commission

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 4, 2015 Decided June 14, 2016

No. 15-1063

UNITED STATES TELECOM ASSOCIATION, ET AL.,

PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED

STATES OF AMERICA,

RESPONDENTS

INDEPENDENT TELEPHONE & TELECOMMUNICATIONS

ALLIANCE, ET AL.,

INTERVENORS

Consolidated with 15-1078, 15-1086, 15-1090, 15-1091,

15-1092, 15-1095, 15-1099, 15-1117, 15-1128, 15-1151,

15-1164

On Petitions for Review of an Order of

the Federal Communications Commission

Peter D. Keisler argued the cause for petitioners United

States Telecom Association, et al. With him on the joint

briefs were Michael K. Kellogg, Scott H. Angstreich, Miguel

A. Estrada, Theodore B. Olson, Jonathan C. Bond, Stephen E.

2

Coran, S. Jenell Trigg, Jeffrey A. Lamken, David H. Solomon,

Russell P. Hanser, Rick C. Chessen, Neal M. Goldberg,

Michael S. Schooler, Matthew A. Brill, Matthew T.

Murchison, Jonathan Y. Ellis, Helgi C. Walker, Michael R.

Huston, Kathleen M. Sullivan, James P. Young, C. Frederick

Beckner III, David L. Lawson, Gary L. Phillips, and

Christopher M. Heimann. Dennis Corbett and Kellam M.

Conover entered appearances.

Brett A. Shumate argued the cause for petitioners Alamo

Broadband Inc. and Daniel Berninger. With him on the briefs

were Andrew G. McBride, Eve Klindera Reed, Richard E.

Wiley, and Bennett L. Ross.

Earl W. Comstock argued the cause for petitioners Full

Service Network, et al. With him on the briefs were Robert J.

Gastner and Michael A. Graziano.

Bryan N. Tramont and Craig E. Gilmore were on the

briefs for amicus curiae Mobile Future in support of

petitioners CTIA-The Wireless Association and AT&T Inc.

Bryan N. Tramont was on the brief for amicus curiae

Telecommunications Industry Association in support of

petitioners. Russell P. Hanser entered an appearance.

William S. Consovoy, Thomas R. McCarthy, and J.

Michael Connolly were on the brief for amicus curiae Center

for Boundless Innovation in support of petitioners United

States Telecom Association, National Cable &

Telecommunications Association, CTIA-The Wireless

Association, American Cable Association, Wireless Internet

Service Providers Association, AT&T Inc., CenturyLink,

Alamo Broadband Inc., and Daniel Berninger.

3

Thomas R. McCarthy, William S. Consovoy, and J.

Michael Connolly were on the brief for amici curiae Members

of Congress in support of petitioners United States Telecom

Association, National Cable & Telecommunications

Association, CTIA-The Wireless Association, American

Cable Association, Wireless Internet Service Providers

Association, AT&T Inc., Centurylink, Alamo Broadband Inc.,

and Daniel Berninger.

R. Benjamin Sperry was on the brief for amici curiae

International Center for Law & Economics and

Administrative Law Scholars in support of petitioners United

States Telecom Association, National Cable &

Telecommunications Association, CTIA-The Wireless

Association, American Cable Association, Wireless Internet

Service Providers Association, AT&T Inc., Centurylink,

Alamo Broadband Inc., and Daniel Berninger.

David A. Balto was on the brief for amicus curiae

Richard Bennett in support of petitioners United States

Telecom Association, National Cable & Telecommunications

Association, CTIA-The Wireless Association, AT&T Inc.,

American Cable Association, Centurylink, Wireless Internet

Service Providers Association, Alamo Broadband Inc., and

Daniel Berninger.

David A. Balto was on the brief for amici curiae

Georgetown Center for Business and Public Policy and

Thirteen Prominent Economists and Scholars in support of

petitioners United States Telecom Association, National

Cable & Telecommunications Association, CTIA-The

Wireless Association, AT&T Inc., American Cable

Association, Centurylink, Wireless Internet Service Providers

Association, Alamo Broadband Inc., and Daniel Berninger.

4

John P. Elwood, Kate Comerford Todd, and Steven P.

Lehotsky were on the brief for amici curiae The National

Association of Manufacturers, et al. in support of petitioners.

Christopher S. Yoo was on the brief for amicus curiae

Christopher S. Yoo in support of petitioners.

Cory L. Andrews was on the brief for amici curiae

Former FCC Commissioner Harold Furchtgott-Roth and

Washington Legal Foundation in support of petitioners.

Richard A. Samp entered an appearance.

Hans Bader, Sam Kazman, and Russell D. Lukas were on

the brief for amicus curiae Competitive Enterprise Institute in

support of petitioners.

Kim M. Keenan and David Honig were on the brief for

amicus curiae Multicultural Media, Telecom and Internet

Council in support of petitioners.

Lawrence J. Spiwak was on the brief for amicus curiae

Phoenix Center for Advanced Legal and Economic Public

Policy Studies in support of petitioners.

William J. Kirsch was on the briefs for amicus curiae

William J. Kirsch in support of petitioners.

C. Boyden Gray, Adam J. White, and Adam R.F.

Gustafson were on the briefs for intervenors TechFreedom, et

al. in support of United States Telecom Association, National

Cable & Telecommunications Association, CTIA-The

Wireless Association, American Cable Association, Wireless

Internet Service Providers Association, AT&T Inc.,

CenturyLink, Alamo Broadband Inc., and Daniel Berninger.

Bradley A. Benbrook entered an appearance.

5

Jonathan B. Sallet, General Counsel, Federal

Communications Commission, and Jacob M. Lewis,

Associate General Counsel, argued the causes for

respondents. With them on the brief were William J. Baer,

Assistant Attorney General, U.S. Department of Justice,

David I. Gelfand, Deputy Assistant Attorney General, Kristen

C. Limarzi, Robert J. Wiggers, Nickolai G. Levin, Attorneys,

David M. Gossett, Deputy General Counsel, Federal

Communications Commission, James M. Carr, Matthew J.

Dunne, and Scott M. Noveck, Counsel. Richard K. Welch,

Counsel, Federal Communications Commission, entered an

appearance.

Kevin Russell and Pantelis Michalopoulos argued the

cause for intervenors, Cogent Communications, Inc., et al. in

support of respondents. With them on the joint brief were

Markham C. Erickson, Stephanie A. Roy, Andrew W. Guhr,

Robert M. Cooper, Scott E. Gant, Hershel A. Wancjer,

Christopher J. Wright, Scott Blake Harris, Russell M. Blau,

Joshua M. Bobeck, Sarah J. Morris, Kevin S. Bankston, Seth

D. Greenstein, Robert S. Schwartz, Marvin Ammori, Michael

A. Cheah, Deepak Gupta, Erik Stallman, Matthew F. Wood,

James Bradford Ramsay, Jennifer Murphy, Harold Jay Feld,

David Bergmann, and Colleen L. Boothby. Hamish Hume and

Patrick J. Whittle entered appearances.

Michael K. Kellogg, Scott H. Angstreich, Miguel A.

Estrada, Theodore B. Olson, Jonathan C. Bond, Stephen E.

Coran, S. Jenell Trigg, Jeffrey A. Lamken, Matthew A. Brill,

Matthew T. Murchison, Jonathan Y. Ellis, Helgi C. Walker,

and Michael R. Huston were on the joint brief for intervenors

AT&T Inc., et al. in support of respondents in case no. 15-

1151.

6

Christopher Jon Sprigman was on the brief for amici

curiae Members of Congress in support of respondents.

Gregory A. Beck was on the brief for First Amendment

Scholars as amici curiae in support of respondents.

Michael J. Burstein was on the brief for Professors of

Administrative Law as amici curiae in support of

respondents.

Andrew Jay Schwartzman was on the brief for amicus

curiae Tim Wu in support of respondents.

Andrew Jay Schwartzman was on the brief for amicus

curiae Open Internet Civil Rights Coalition in support of

respondents.

Joseph C. Gratz and Alexandra H. Moss were on the

brief for amici curiae Automattic Inc., et al. in support of

respondents.

Markham C. Erickson and Andrew W. Guhr were on the

brief for amicus curiae Internet Association in support of

respondents.

J. Carl Cecere and David T. Goldberg were on the brief

for amici curiae Reed Hundt, et al. in support of respondents.

Anthony P. Schoenberg and Deepak Gupta were on the

brief for amici curiae Engine Advocacy, et al. in support of

respondents.

Anthony R. Segall was on the brief for amici curiae

Writers Guild of America, et al. in support of respondents.

7

Allen Hammond was on the brief for amici curiae The

Broadband Institute of California and The Media Alliance in

support of respondents.

Corynne McSherry and Arthur B. Spitzer were on the

brief for amici curiae Electronic Frontier Foundation, et al. in

support of respondents.

Eric G. Null was on the brief for amicus curiae

Consumer Union of the U.S., Inc. in support of respondents.

Alexandra Sternburg and Henry Goldberg were on the

brief for amici curiae Computer & Communications Industry

and Mozilla in support of respondents.

Krista L. Cox was on the brief for amici curiae American

Library Association, et al. in support of respondents.

Phillip R. Malone and Jeffrey T. Pearlman were on the

brief for amici curiae Sascha Meinrath, Zephyr Teachout and

45,707 Users of the Internet in support of respondents.

Before: TATEL and SRINIVASAN, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judges TATEL and

SRINIVASAN.

Opinion concurring in part and dissenting in part filed by

Senior Circuit Judge WILLIAMS.

TATEL and SRINIVASAN, Circuit Judges: For the third

time in seven years, we confront an effort by the Federal

Communications Commission to compel internet openness—

commonly known as net neutrality—the principle that

broadband providers must treat all internet traffic the same

8

regardless of source. In our first decision, Comcast Corp. v.

FCC, 600 F.3d 642 (D.C. Cir. 2010), we held that the

Commission had failed to cite any statutory authority that

would justify its order compelling a broadband provider to

adhere to certain open internet practices. In response, relying

on section 706 of the Telecommunications Act of 1996, the

Commission issued an order imposing transparency, anti-

blocking, and anti-discrimination requirements on broadband

providers. In our second opinion, Verizon v. FCC, 740 F.3d

623 (D.C. Cir. 2014), we held that section 706 gives the

Commission authority to enact open internet rules. We

nonetheless vacated the anti-blocking and anti-discrimination

provisions because the Commission had chosen to classify

broadband service as an information service under the

Communications Act of 1934, which expressly prohibits the

Commission from applying common carrier regulations to

such services. The Commission then promulgated the order at

issue in this case—the 2015 Open Internet Order—in which it

reclassified broadband service as a telecommunications

service, subject to common carrier regulation under Title II of

the Communications Act. The Commission also exercised its

statutory authority to forbear from applying many of Title II’s

provisions to broadband service and promulgated five rules to

promote internet openness. Three separate groups of

petitioners, consisting primarily of broadband providers and

their associations, challenge the Order, arguing that the

Commission lacks statutory authority to reclassify broadband

as a telecommunications service, that even if the Commission

has such authority its decision was arbitrary and capricious,

that the Commission impermissibly classified mobile

broadband as a commercial mobile service, that the

Commission impermissibly forbore from certain provisions of

Title II, and that some of the rules violate the First

Amendment. For the reasons set forth in this opinion, we

deny the petitions for review.

9

I.

Called “one of the most significant technological

advancements of the 20th century,” Senate Committee on

Commerce, Science and Transportation, Report on Online

Personal Privacy Act, Sen. Rep. No. 107-240, at 7 (2002), the

internet has four major participants: end users, broadband

providers, backbone networks, and edge providers. Most end

users connect to the internet through a broadband provider,

which delivers high-speed internet access using technologies

such as cable modem service, digital subscriber line (DSL)

service, and fiber optics. See In re Protecting and Promoting

the Open Internet (“2015 Open Internet Order” or “the

Order”), 30 FCC Rcd. 5601, 5682–83 ¶ 188, 5751 ¶ 346.

Broadband providers interconnect with backbone networks—

“long-haul fiber-optic links and high-speed routers capable of

transmitting vast amounts of data.” Verizon, 740 F.3d at 628

(citing In re Verizon Communications Inc. and MCI, Inc.

Applications for Approval of Transfer of Control, 20 FCC

Rcd. 18,433, 18,493 ¶ 110 (2005)). Edge providers, like

Netflix, Google, and Amazon, “provide content, services, and

applications over the Internet.” Id. at 629 (citing In re

Preserving the Open Internet (“2010 Open Internet Order”),

25 FCC Rcd. 17,905, 17,910 ¶ 13 (2010)). To bring this all

together, when an end user wishes to check last night’s

baseball scores on ESPN.com, his computer sends a signal to

his broadband provider, which in turn transmits it across the

backbone to ESPN’s broadband provider, which transmits the

signal to ESPN’s computer. Having received the signal,

ESPN’s computer breaks the scores into packets of

information which travel back across ESPN’s broadband

provider network to the backbone and then across the end

user’s broadband provider network to the end user, who will

then know that the Nats won 5 to 3. In recent years, some

edge providers, such as Netflix and Google, have begun

connecting directly to broadband providers’ networks, thus

10

avoiding the need to interconnect with the backbone, 2015

Open Internet Order, 30 FCC Rcd. at 5610 ¶ 30, and some

broadband providers, such as Comcast and AT&T, have

begun developing their own backbone networks, id. at 5688

¶ 198.

Proponents of internet openness “worry about the

relationship between broadband providers and edge

providers.” Verizon, 740 F.3d at 629. “They fear that

broadband providers might prevent their end-user subscribers

from accessing certain edge providers altogether, or might

degrade the quality of their end-user subscribers’ access to

certain edge providers, either as a means of favoring their

own competing content or services or to enable them to

collect fees from certain edge providers.” Id. Thus, for

example, “a broadband provider like Comcast might limit its

end-user subscribers’ ability to access the New York Times

website if it wanted to spike traffic to its own news website,

or it might degrade the quality of the connection to a search

website like Bing if a competitor like Google paid for

prioritized access.” Id.

Understanding the issues raised by the Commission’s

current attempt to achieve internet openness requires

familiarity with its past efforts to do so, as well as with the

history of broadband regulation more generally.

A.

Much of the structure of the current regulatory scheme

derives from rules the Commission established in its 1980

Computer II Order. The Computer II rules distinguished

between “basic services” and “enhanced services.” Basic

services, such as telephone service, offered “pure

transmission capability over a communications path that is

virtually transparent in terms of its interaction with customer

11

supplied information.” In re Amendment of Section 64.702

of the Commission’s Rules and Regulations (“Computer II”),

77 F.C.C. 2d 384, 420 ¶ 96 (1980). Enhanced services

consisted of “any offering over the telecommunications

network which is more than a basic transmission service,” for

example, one in which “computer processing applications are

used to act on the content, code, protocol, and other aspects of

the subscriber’s information,” such as voicemail. Id. at 420

¶ 97. The rules subjected basic services, but not enhanced

services, to common carrier treatment under Title II of the

Communications Act. Id. at 387 ¶¶ 5–7. Among other things,

Title II requires that carriers “furnish . . . communication

service upon reasonable request,” 47 U.S.C. § 201(a), engage

in no “unjust or unreasonable discrimination in charges,

practices, classifications, regulations, facilities, or services,”

id. § 202(a), and charge “just and reasonable” rates, id.

§ 201(b).

The Computer II rules also recognized a third category of

services, “adjunct-to-basic” services: enhanced services, such

as “speed dialing, call forwarding, [and] computer-provided

directory assistance,” that facilitated use of a basic service.

See In re Implementation of the Non-Accounting Safeguards

(“Non-Accounting Safeguards Order”), 11 FCC Rcd. 21,905,

21,958 ¶ 107 n.245 (1996). Although adjunct-to-basic

services fell within the definition of enhanced services, the

Commission nonetheless treated them as basic because of

their role in facilitating basic services. See Computer II, 77

F.C.C. 2d at 421 ¶ 98 (explaining that the Commission would

not treat as an enhanced service those services used to

“facilitate [consumers’] use of traditional telephone

services”).

Fifteen years later, Congress, borrowing heavily from the

Computer II framework, enacted the Telecommunications Act

12

of 1996, which amended the Communications Act. The

Telecommunications Act subjects a “telecommunications

service,” the successor to basic service, to common carrier

regulation under Title II. 47 U.S.C. § 153(51) (“A

telecommunications carrier shall be treated as a common

carrier under [the Communications Act] only to the extent

that it is engaged in providing telecommunications

services.”). By contrast, an “information service,” the

successor to an enhanced service, is not subject to Title II.

The Telecommunications Act defines a “telecommunications

service” as “the offering of telecommunications for a fee

directly to the public, or to such classes of users as to be

effectively available directly to the public, regardless of the

facilities used.” Id. § 153(53). It defines telecommunications

as “the transmission, between or among points specified by

the user, of information of the user’s choosing without change

in the form or content of the information as sent and

received.” Id. § 153(50). An information service is an

“offering of a capability for generating, acquiring, storing,

transforming, processing, retrieving, utilizing, or making

available information via telecommunications.” Id.

§ 153(24). The appropriate regulatory treatment therefore

turns on what services a provider offers to the public: if it

offers telecommunications, that service is subject to Title II

regulation.

Tracking the Commission’s approach to adjunct-to-basic

services, Congress also effectively created a third category for

information services that facilitate use of a

telecommunications service. The “telecommunications

management exception” exempts from information service

treatment—and thus treats as a telecommunications service—

“any use [of an information service] for the management,

control, or operation of a telecommunications system or the

management of a telecommunications service.” Id.

13

The Commission first applied this statutory framework to

broadband in 1998 when it classified a portion of DSL

service—broadband internet service furnished over telephone

lines—as a telecommunications service. See In re

Deployment of Wireline Services Offering Advanced

Telecommunications Capability (“Advanced Services

Order”), 13 FCC Rcd. 24,012, 24,014 ¶ 3, 24,029–30 ¶¶ 35–

36 (1998). According to the Commission, the transmission

component of DSL—the phone lines that carried the

information—was a telecommunications service. Id. at

24,029–30 ¶¶ 35–36. The Commission classified the internet

access delivered via the phone lines, however, as a separate

offering of an information service. Id. at 24,030 ¶ 36. DSL

providers that supplied the phone lines and the internet access

therefore offered both a telecommunications service and an

information service.

Four years later, the Commission took a different

approach when it classified cable modem service—broadband

service provided over cable lines—as solely an information

service. In re Inquiry Concerning High-Speed Access to the

Internet over Cable and Other Facilities (“Cable Broadband

Order”), 17 FCC Rcd. 4798, 4823 ¶¶ 39–40 (2002). In its

2002 Cable Broadband Order, the Commission acknowledged

that when providing the information service component of

broadband—which, according to the Commission, consisted

of several distinct applications, including email and online

newsgroups, id. at 4822–23 ¶ 38—cable broadband providers

transmit information and thus use telecommunications. In the

Commission’s view, however, the transmission functioned as

a component of a “single, integrated information service,”

rather than as a standalone offering. Id. at 4823 ¶ 38. The

Commission therefore classified them together as an

information service. Id. at 4822–23 ¶¶ 38–40.

14

The Supreme Court upheld the Commission’s

classification of cable modem service in National Cable &

Telecommunications Ass’n v. Brand X Internet Services, 545

U.S. 967, 986 (2005). Applying the principles of statutory

interpretation established in Chevron U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), the

Court explained that the key statutory term “offering” in the

definition of “telecommunications service” is ambiguous.

Brand X, 545 U.S. at 989. What a company offers, the Court

reasoned, can refer to either the “single, finished product” or

the product’s individual components. Id. at 991. According

to the Court, resolving that question in the context of

broadband service requires the Commission to determine

whether the information service and the telecommunications

components “are functionally integrated . . . or functionally

separate.” Id. That question “turns not on the language of

[the Communications Act], but on the factual particulars of

how Internet technology works and how it is provided,

questions Chevron leaves to the Commission to resolve in the

first instance.” Id. Examining the classification at Chevron’s

second step—reasonableness—the Court deferred to the

Commission’s finding that “the high-speed transmission used

to provide [the information service] is a functionally

integrated component of that service,” id. at 998, and upheld

the order, id. at 1003. Three Justices dissented, arguing that

cable broadband providers offered telecommunications in the

form of the “physical connection” between their computers

and end users’ computers. See id. at 1009 (Scalia, J.,

dissenting).

Following Brand X, the Commission classified other

types of broadband service, such as DSL and mobile

broadband service, as integrated offerings of information

services without a standalone offering of telecommunications.

See, e.g., In re Appropriate Regulatory Treatment for

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Broadband Access to the Internet over Wireless Networks

(“2007 Wireless Order”), 22 FCC Rcd. 5901, 5901–02 ¶ 1

(2007) (mobile broadband); In re Appropriate Framework for

Broadband Access to the Internet over Wireline Facilities

(“2005 Wireline Broadband Order”), 20 FCC Rcd. 14,853,

14,863–64 ¶ 14 (2005) (DSL).

B.

Although the Commission’s classification decisions

spared broadband providers from Title II common carrier

obligations, the Commission made clear that it would

nonetheless seek to preserve principles of internet openness.

In the 2005 Wireline Broadband Order, which classified DSL

as an integrated information service, the Commission

announced that should it “see evidence that providers of

telecommunications for Internet access or IP-enabled services

are violating these principles,” it would “not hesitate to take

action to address that conduct.” 2005 Wireline Broadband

Order, 20 FCC Rcd. at 14,904 ¶ 96. Simultaneously, the

Commission issued a policy statement signaling its intention

to “preserve and promote the open and interconnected nature

of the public Internet.” In re Appropriate Framework for

Broadband Access to the Internet over Wireline Facilities, 20

FCC Rcd. 14,986, 14,988 ¶ 4 (2005).

In 2007, the Commission found reason to act when

Comcast customers accused the company of interfering with

their ability to access certain applications. Comcast, 600 F.3d

at 644. Because Comcast voluntarily adopted new practices

to address the customers’ concerns, the Commission “simply

ordered [Comcast] to make a set of disclosures describing the

details of its new approach and the company’s progress

toward implementing it.” Id. at 645. As authority for that

order, the Commission cited its section 4(i) “ancillary

jurisdiction.” 47 U.S.C. § 154(i) (“The Commission may

16

perform any and all acts, make such rules and regulations, and

issue such orders, not inconsistent with this chapter, as may

be necessary in the execution of its functions.”); In re Formal

Complaint of Free Press and Public Knowledge Against

Comcast Corp. for Secretly Degrading Peer-to-Peer

Applications, 23 FCC Rcd. 13,028, 13,034–41 ¶¶ 14–22

(2008). In Comcast, we vacated that order because the

Commission had failed to identify any grant of statutory

authority to which the order was reasonably ancillary. 600

F.3d at 644.

C.

Following Comcast, the Commission issued a notice of

inquiry, seeking comment on whether it should reclassify

broadband as a telecommunications service. See In re

Framework for Broadband Internet Service, 25 FCC Rcd.

7866, 7867 ¶ 2 (2010). Rather than reclassify broadband,

however, the Commission adopted the 2010 Open Internet

Order. See 25 FCC Rcd. 17,905. In that order, the

Commission promulgated three rules: (1) a transparency rule,

which required broadband providers to “disclose the network

management practices, performance characteristics, and terms

and conditions of their broadband services”; (2) an anti-

blocking rule, which prohibited broadband providers from

“block[ing] lawful content, applications, services, or non-

harmful devices”; and (3) an anti-discrimination rule, which

established that broadband providers “may not unreasonably

discriminate in transmitting lawful network traffic.” Id. at

17,906 ¶ 1. The transparency rule applied to both “fixed”

broadband, the service a consumer uses on her laptop when

she is at home, and “mobile” broadband, the service a

consumer uses on her iPhone when she is riding the bus to

work. Id. The anti-blocking rule applied in full only to fixed

broadband, but the order prohibited mobile broadband

providers from “block[ing] lawful websites, or block[ing]

17

applications that compete with their voice or video telephony

services.” Id. The anti-discrimination rule applied only to

fixed broadband. Id. According to the Commission, mobile

broadband warranted different treatment because, among

other things, “the mobile ecosystem is experiencing very

rapid innovation and change,” id. at 17,956 ¶ 94, and “most

consumers have more choices for mobile broadband than for

fixed,” id. at 17,957 ¶ 95. In support of its rules, the

Commission relied primarily on section 706 of the

Telecommunications Act, which requires that the

Commission “encourage the deployment on a reasonable and

timely basis of advanced telecommunications capability to all

Americans,” 47 U.S.C. § 1302(a). 25 FCC Rcd. at 17,968–72

¶¶ 117–23.

In Verizon, we upheld the Commission’s conclusion that

section 706 provides it authority to promulgate open internet

rules. According to the Commission, such rules encourage

broadband deployment because they “preserve and facilitate

the ‘virtuous circle’ of innovation that has driven the

explosive growth of the Internet.” Verizon, 740 F.3d at 628.

Under the Commission’s “virtuous circle” theory, “Internet

openness . . . spurs investment and development by edge

providers, which leads to increased end-user demand for

broadband access, which leads to increased investment in

broadband network infrastructure and technologies, which in

turns leads to further innovation and development by edge

providers.” Id. at 634. Reviewing the record, we concluded

that the Commission’s “finding that Internet openness

fosters . . . edge-provider innovation . . . was . . . reasonable

and grounded in substantial evidence” and that the

Commission had “more than adequately supported and

explained its conclusion that edge-provider innovation leads

to the expansion and improvement of broadband

infrastructure.” Id. at 644.

18

We also determined that the Commission had

“adequately supported and explained its conclusion that,

absent rules such as those set forth in the [2010 Open Internet

Order], broadband providers represent[ed] a threat to Internet

openness and could act in ways that would ultimately inhibit

the speed and extent of future broadband deployment.” Id. at

645. For example, the Commission noted that “broadband

providers like AT & T and Time Warner have acknowledged

that online video aggregators such as Netflix and Hulu

compete directly with their own core video subscription

service,” id. (internal quotation marks omitted), and that, even

absent direct competition, “[b]roadband providers . . . have

powerful incentives to accept fees from edge providers, either

in return for excluding their competitors or for granting them

prioritized access to end users,” id. at 645–46. Importantly,

moreover, the Commission found that “broadband providers

have the technical . . . ability to impose such restrictions,”

noting that there was “little dispute that broadband providers

have the technological ability to distinguish between and

discriminate against certain types of Internet traffic.” Id. at

646. The Commission also “convincingly detailed how

broadband providers’ [gatekeeper] position in the market

gives them the economic power to restrict edge-provider

traffic and charge for the services they furnish edge

providers.” Id. Although the providers’ gatekeeper position

would have brought them little benefit if end users could have

easily switched providers, “we [saw] no basis for questioning

the Commission’s conclusion that end users [were] unlikely to

react in this fashion.” Id. The Commission

“detailed . . . thoroughly . . . the costs of switching,” and

found that “many end users may have no option to switch, or

at least face very limited options.” Id. at 647.

Finally, we explained that although some record evidence

supported Verizon’s insistence that the order would have a

19

detrimental effect on broadband deployment, other record

evidence suggested the opposite. Id. at 649. The case was

thus one where “‘the available data do[] not settle a regulatory

issue and the agency must then exercise its judgment in

moving from the facts and probabilities on the record to a

policy conclusion.’” Id. (alteration in original) (quoting

Motor Vehicle Manufacturers Ass’n v. State Farm Mutual

Automobile Insurance Co., 463 U.S. 29, 52 (1983)). The

Commission, we concluded, had “offered ‘a rational

connection between the facts found and the choice made.’”

Id. (quoting State Farm, 463 U.S. at 52).

We nonetheless vacated the anti-blocking and anti-

discrimination rules because they unlawfully subjected

broadband providers to per se common carrier treatment. Id.

at 655, 658–59. As we explained, the Communications Act

provides that “[a] telecommunications carrier shall be treated

as a common carrier . . . only to the extent that it is engaged in

providing telecommunications services.” Id. at 650 (quoting

47 U.S.C. § 153(51)). The Commission, however, had

classified broadband not as a telecommunications service, but

rather as an information service, exempt from common carrier

regulation. Id. Because the anti-blocking and anti-

discrimination rules required broadband providers to offer

service indiscriminately—the common law test for a per se

common carrier obligation—they ran afoul of the

Communications Act. See id. at 651–52, 655, 658–59. We

upheld the transparency rule, however, because it imposed no

per se common carrier obligations on broadband providers.

Id. at 659.

D.

A few months after our decision in Verizon, the

Commission issued a notice of proposed rulemaking to “find

the best approach to protecting and promoting Internet

20

openness.” In re Protecting and Promoting the Open Internet

(“NPRM”), 29 FCC Rcd. 5561, 5563 ¶ 4 (2014). After

receiving nearly four million comments, the Commission

promulgated the order at issue in this case, the 2015 Open

Internet Order. 30 FCC Rcd. at 5624 ¶ 74.

The Order consists of three components. First, the

Commission reclassified both fixed and mobile “broadband

Internet access service” as telecommunications services. Id.

at 5743–44 ¶ 331. For purposes of the Order, the

Commission defined “broadband Internet access service” as

“a mass-market retail service by wire or radio that provides

the capability to transmit data to and receive data from all or

substantially all Internet endpoints, including any capabilities

that are incidental to and enable the operation of the

communications service, but excluding dial-up Internet access

service.” Id. at 5745–46 ¶ 336 (footnote omitted). Because

the Commission concluded that the telecommunications

service offered to end users necessarily includes the

arrangements that broadband providers make with other

networks to exchange traffic—commonly referred to as

“interconnection arrangements”—the Commission

determined that Title II would apply to those arrangements as

well. Id. at 5686 ¶ 195. The Commission also reclassified

mobile broadband service, which it had previously deemed a

“private mobile service,” exempt from common carrier

regulation, as a “commercial mobile service,” subject to such

regulation. Id. at 5778 ¶ 388.

In the Order’s second component, the Commission

carried out its statutory mandate to forbear “from applying

any regulation or any provision” of the Communications Act

if it determines that the provision is unnecessary to ensure just

and reasonable service or protect consumers and determines

that forbearance is “consistent with the public interest.” 47

21

U.S.C. § 160(a). Specifically, the Commission forbore from

applying certain Title II provisions to broadband service,

including section 251’s mandatory unbundling requirements.

2015 Open Internet Order, 30 FCC Rcd. at 5804–05 ¶ 434,

5849–51 ¶ 513.

In the third portion of the Order, the Commission

promulgated five open internet rules, which it applied to both

fixed and mobile broadband service. The first three of the

Commission’s rules, which it called “bright-line rules,” ban

blocking, throttling, and paid prioritization. Id. at 5647 ¶ 110.

The anti-blocking and anti-throttling rules prohibit broadband

providers from blocking “lawful content, applications,

services, or non-harmful devices” or throttling—degrading or

impairing—access to the same. Id. at 5648 ¶ 112, 5651 ¶ 119.

The anti-paid-prioritization rule bars broadband providers

from “favor[ing] some traffic over other traffic . . . either (a)

in exchange for consideration (monetary or otherwise) from a

third party, or (b) to benefit an affiliated entity.” Id. at 5653

¶ 125. The fourth rule, known as the “General Conduct

Rule,” prohibits broadband providers from “unreasonably

interfer[ing] with or unreasonably disadvantag[ing] (i) end

users’ ability to select, access, and use broadband Internet

access service or the lawful Internet content, applications,

services, or devices of their choice, or (ii) edge providers’

ability to make lawful content, applications, services, or

devices available to end users.” Id. at 5660 ¶ 136. The

Commission set forth a nonexhaustive list of factors to guide

its application of the General Conduct Rule, which we discuss

at greater length below. See id. at 5661–64 ¶¶ 138–45.

Finally, the Commission adopted an enhanced transparency

rule, which builds upon the transparency rule that it

promulgated in its 2010 Open Internet Order and that we

sustained in Verizon. Id. at 5669–82 ¶¶ 154–85.

22

Several groups of petitioners now challenge the Order:

US Telecom Association, an association of service providers,

along with several other providers and associations; Full

Service Network, a service provider, joined by other such

providers; and Alamo Broadband Inc., a service provider,

joined by an edge provider, Daniel Berninger. TechFreedom,

a think tank devoted to technology issues, along with a

service provider and several individual investors and

entrepreneurs, has intervened on the side of petitioners US

Telecom and Alamo. Cogent, a service provider, joined by

several edge providers, users, and organizations, has

intervened on the side of the Commission.

In part II, we address petitioners’ arguments that the

Commission has no statutory authority to reclassify

broadband as a telecommunications service and that, even if it

possesses such authority, it acted arbitrarily and capriciously.

In part III, we address challenges to the Commission’s

regulation of interconnection arrangements under Title II. In

part IV, we consider arguments that the Commission lacks

statutory authority to classify mobile broadband service as a

“commercial mobile service” and that, in any event, its

decision to do so was arbitrary and capricious. In part V, we

assess the contention that the Commission impermissibly

forbore from certain provisions of Title II. In part VI, we

consider challenges to the open internet rules. And finally, in

part VII, we evaluate the claim that some of the open internet

rules run afoul of the First Amendment.

Before addressing these issues, we think it important to

emphasize two fundamental principles governing our

responsibility as a reviewing court. First, our “role in

reviewing agency regulations . . . is a limited one.” Ass’n of

American Railroads v. Interstate Commerce Commission, 978

F.2d 737, 740 (D.C. Cir. 1992). Our job is to ensure that an

23

agency has acted “within the limits of [Congress’s]

delegation” of authority, Chevron, 467 U.S. at 865, and that

its action is not “arbitrary, capricious, an abuse of discretion,

or otherwise not in accordance with law,” 5 U.S.C. §

706(2)(A). Critically, we do not “inquire as to whether the

agency’s decision is wise as a policy matter; indeed, we are

forbidden from substituting our judgment for that of the

agency.” Ass’n of American Railroads, 978 F.2d at 740

(alteration and internal quotation marks omitted). Nor do we

inquire whether “some or many economists would disapprove

of the [agency’s] approach” because “we do not sit as a panel

of referees on a professional economics journal, but as a panel

of generalist judges obliged to defer to a reasonable judgment

by an agency acting pursuant to congressionally delegated

authority.” City of Los Angeles v. U.S. Department of

Transportation, 165 F.3d 972, 978 (D.C. Cir. 1999). Second,

we “sit to resolve only legal questions presented and argued

by the parties.” In re Cheney, 334 F.3d 1096, 1108 (D.C. Cir.

2003), vacated and remanded on other grounds sub nom.

Cheney v. U.S. District Court for the District of Columbia,

542 U.S. 367 (2004); see also, e.g., United Parcel Service,

Inc. v. Mitchell, 451 U.S. 56, 61 n.2 (1981) (“We decline to

consider this argument since it was not raised by either of the

parties here or below.”). “It is not our duty” to consider

“novel arguments a [party] could have made but did not.”

United States v. Laureys, 653 F.3d 27, 32 (D.C. Cir. 2011).

“The premise of our adversarial system is that appellate courts

do not sit as self-directed boards of legal inquiry and research,

but essentially as arbiters of legal questions presented and

argued by the parties before them.” Carducci v. Regan, 714

F.2d 171, 177 (D.C. Cir. 1983). Departing from this rule

would “deprive us in substantial measure of that assistance of

counsel which the system assumes—a deficiency that we can

perhaps supply by other means, but not without altering the

character of our institution.” Id. With these two critical

24

principles in mind, we turn to the first issue in this case—the

Commission’s reclassification of broadband as a

“telecommunications service.”

II.

In the Open Internet Order, the Commission determined

that broadband service satisfies the statutory definition of a

telecommunications service: “the offering of

telecommunications for a fee directly to the public.” 47

U.S.C. § 153(53). In accordance with Brand X, the

Commission arrived at this conclusion by examining

consumer perception of what broadband providers offer.

2015 Open Internet Order, 30 FCC Rcd. at 5750 ¶ 342. In

Brand X, the Supreme Court held that it was “consistent with

the statute’s terms” for the Commission to take into account

“the end user’s perspective” in classifying a service as

“information” or “telecommunications.” 545 U.S. at 993.

Specifically, the Court held that the Commission had

reasonably concluded that a provider supplies a

telecommunications service when it makes a “‘stand-alone’

offering of telecommunications, i.e., an offered service that,

from the user’s perspective, transmits messages unadulterated

by computer processing.” Id. at 989. In the Order, the

Commission concluded that consumers perceive broadband

service both as a standalone offering and as providing

telecommunications. See 2015 Open Internet Order, 30 FCC

Rcd. at 5765 ¶ 365. These conclusions about consumer

perception find extensive support in the record and together

justify the Commission’s decision to reclassify broadband as a

telecommunications service.

With respect to its first conclusion—that consumers

perceive broadband as a standalone offering—the

Commission explained that broadband providers offer two

separate types of services: “a broadband Internet access

25

service,” id. at 5750 ¶ 341, which provides “the ability to

transmit data to and from Internet endpoints,” id. at 5755

¶ 350; and “‘add-on’ applications, content, and services that

are generally information services,” id. at 5750 ¶ 341, such as

email and cloud-based storage programs, id. at 5773 ¶ 376. It

found that from the consumer’s perspective, “broadband

Internet access service is today sufficiently independent of

these information services that it is a separate offering.” Id. at

5757–58 ¶ 356.

In support of its conclusion, the Commission pointed to

record evidence demonstrating that consumers use broadband

principally to access third-party content, not email and other

add-on applications. “As more American households have

gained access to broadband Internet access service,” the

Commission explained, “the market for Internet-based

services provided by parties other than broadband Internet

access providers has flourished.” Id. at 5753 ¶ 347. Indeed,

from 2003 to 2015, the number of websites increased from

“approximately 36 million” to “an estimated 900 million.” Id.

By one estimate, two edge providers, Netflix and YouTube,

“account for 50 percent of peak Internet download traffic in

North America.” Id. at 5754 ¶ 349.

That consumers focus on transmission to the exclusion of

add-on applications is hardly controversial. Even the most

limited examination of contemporary broadband usage reveals

that consumers rely on the service primarily to access third-

party content. The “typical consumer” purchases broadband

to use “third-party apps such as Facebook, Netflix, YouTube,

Twitter, or MLB.tv, or . . . to access any of thousands of

websites.” Computer & Communications Industry

Association Amicus Br. 7. As one amicus succinctly

explains, consumers today “pay telecommunications

providers for access to the Internet, and access is exactly what

26

they get. For content, they turn to [the] creative efforts . . . of

others.” Automattic Amicus Br. 1.

Indeed, given the tremendous impact third-party internet

content has had on our society, it would be hard to deny its

dominance in the broadband experience. Over the past two

decades, this content has transformed nearly every aspect of

our lives, from profound actions like choosing a leader,

building a career, and falling in love to more quotidian ones

like hailing a cab and watching a movie. The same assuredly

cannot be said for broadband providers’ own add-on

applications.

The Commission found, moreover, that broadband

consumers not only focus on the offering of transmission but

often avoid using the broadband providers’ add-on services

altogether, choosing instead “to use their high-speed Internet

connections to take advantage of competing services offered

by third parties.” 2015 Open Internet Order, 30 FCC Rcd. at

5753 ¶ 347. For instance, two third-party email services,

Gmail and Yahoo! Mail, were “among the ten Internet sites

most frequently visited during the week of January 17, 2015,

with approximately 400 million and 350 million visits

respectively.” Id. at 5753 ¶ 348. Some “even advise

consumers specifically not to use a broadband provider-based

email address[] because a consumer cannot take that email

address with them if he or she switches providers.” Id.

Amici Members of Congress in Support of Respondents

provide many more examples of third-party content that

consumers use in lieu of broadband provider content,

examples that will be abundantly familiar to most internet

users. “[M]any consumers,” they note, “have spurned the

applications . . . offered by their broadband Internet access

service provider, in favor of services and applications offered

27

by third parties, such as . . . news and related content on

nytimes.com or washingtonpost.com or Google News; home

pages on Microsoft’s MSN or Yahoo!’s ‘my.yahoo’; video

content on Netflix or YouTube or Hulu; streaming music on

Spotify or Pandora or Apple Music; and on-line shopping on

Amazon.com or Target.com, as well as many others in each

category.” Members of Congress for Resp’ts Amicus Br. 22.

In support of its second conclusion—that from the user’s

point of view, the standalone offering of broadband service

provides telecommunications—the Commission explained

that “[u]sers rely on broadband Internet access service to

transmit ‘information of the user’s choosing,’ ‘between or

among points specified by the user,’” without changing the

form or content of that information. 2015 Open Internet

Order, 30 FCC Rcd. at 5761 ¶ 361 (quoting 47 U.S.C.

§ 153(50)); see also id. at 5762–63 ¶ 362. The Commission

grounded that determination in record evidence that

“broadband Internet access service is marketed today

primarily as a conduit for the transmission of data across the

Internet.” Id. at 5757 ¶ 354. Specifically, broadband

providers focus their advertising on the speed of transmission.

For example, the Commission quoted a Comcast ad offering

“the consistently fast speeds you need, even during peak

hours”; an RCN ad promising the ability “to upload and

download in a flash”; and a Verizon ad claiming that

“[w]hatever your life demands, there’s a Verizon FiOS plan

with the perfect upload/download speed for you.” Id. at 5755

¶ 351 (alteration in original) (internal quotation marks

omitted). The Commission further observed that “fixed

broadband providers use transmission speeds to classify tiers

of service offerings and to distinguish their offerings from

those of competitors.” Id.

28

Those advertisements, moreover, “link higher

transmission speeds and service reliability with enhanced

access to the Internet at large—to any ‘points’ a user may

wish to reach.” Id. at 5756 ¶ 352. For example, RCN brags

that its service is “ideal for watching Netflix,” and Verizon

touts its service as “work[ing] well for uploading and sharing

videos on YouTube.” Id. Based on the providers’ emphasis

on how useful their services are for accessing third-party

content, the Commission found that end users view broadband

service as a mechanism to transmit data of their own choosing

to their desired destination—i.e., as a telecommunications

service.

In concluding that broadband qualifies as a

telecommunications service, the Commission explained that

although broadband often relies on certain information

services to transmit content to end users, these services “do

not turn broadband Internet access service into a functionally

integrated information service” because “they fall within the

telecommunications system management exception.” Id. at

5765 ¶ 365. The Commission focused on two such services.

The first, DNS, routes end users who input the name of a

website to its numerical IP address, allowing users to reach

the website without having to remember its multidigit

address. Id. at 5766 ¶ 366. The second, caching, refers to the

process of storing copies of web content at network locations

closer to users so that they can access it more quickly. Id. at

5770 ¶ 372. The Commission found that DNS and caching fit

within the statute’s telecommunications management

exception because both services are “simply used to facilitate

the transmission of information so that users can access other

services.” Id.

Petitioners assert numerous challenges to the

Commission’s decision to reclassify broadband. Finding that

29

none has merit, we uphold the classification. Significantly,

although our colleague believes that the Commission acted

arbitrarily and capriciously when it reclassified broadband, he

agrees that the Commission has statutory authority to classify

broadband as a telecommunications service. Concurring &

Dissenting Op. at 10.

A.

Before addressing petitioners’ substantive challenges to

the Commission’s reclassification of broadband service, we

must consider two procedural arguments, both offered by US

Telecom.

First, US Telecom asserts that the Commission violated

section 553 of the Administrative Procedure Act, which

requires that an NPRM “include . . . either the terms or

substance of the proposed rule or a description of the subjects

and issues involved.” 5 U.S.C. § 553(b)(3). According to US

Telecom, the Commission violated this requirement because

the NPRM proposed relying on section 706, not Title II; never

explained that the Commission would justify reclassification

based on consumer perception; and failed to signal that it

would rely on the telecommunications management

exception.

Under the APA, an NPRM must “provide sufficient

factual detail and rationale for the rule to permit interested

parties to comment meaningfully.” Honeywell International,

Inc. v. EPA, 372 F.3d 441, 445 (D.C. Cir. 2004) (internal

quotation marks omitted). The final rule, however, “need not

be the one proposed in the NPRM.” Agape Church, Inc. v.

FCC, 738 F.3d 397, 411 (D.C. Cir. 2013). Instead, it “need

only be a ‘logical outgrowth’ of its notice.” Covad

Communications Co. v. FCC, 450 F.3d 528, 548 (D.C. Cir.

2006). An NPRM satisfies the logical outgrowth test if it

30

“expressly ask[s] for comments on a particular issue or

otherwise ma[kes] clear that the agency [is] contemplating a

particular change.” CSX Transportation, Inc. v. Surface

Transportation Board, 584 F.3d 1076, 1081 (D.C. Cir. 2009).

The Commission’s NPRM satisfied this standard.

Although the NPRM did say that the Commission was

considering relying on section 706, it also “expressly asked

for comments” on whether the Commission should reclassify

broadband: “[w]e seek comment on whether the Commission

should rely on its authority under Title II of the

Communications Act, including . . . whether we should revisit

the Commission’s classification of broadband Internet access

service as an information service . . . .” NPRM, 29 FCC Rcd.

at 5612 ¶ 148 (footnote omitted).

US Telecom’s second complaint—that the NPRM failed

to provide a meaningful opportunity to comment on the

Commission’s reliance on consumer perception—is equally

without merit. In Brand X, the Supreme Court explained that

classification under the Communications Act turns on “what

the consumer perceives to be the . . . finished product.” 545

U.S. at 990. Given this, and given that the NPRM expressly

stated that the Commission was considering reclassifying

broadband as a telecommunications service, interested parties

could “comment meaningfully” on the possibility that the

Commission would follow Brand X and look to consumer

perception.

Brand X also provides the answer to US Telecom’s

complaint about the telecommunications management

exception. In Brand X, the Court made clear that to reclassify

broadband as a telecommunications service, the Commission

would need to conclude that the telecommunications

component of broadband was “functionally separate” from the

31

information services component. Id. at 991. Moreover, the

dissent expressly noted that the Commission could reach this

conclusion in part by determining that certain information

services fit within the telecommunications management

exception. “[The] exception,” the dissent explained, “would

seem to apply to [DNS and caching]. DNS, in particular, is

scarcely more than routing information . . . .” Id. at 1012–13

(Scalia, J., dissenting). As they could with consumer

perception, therefore, interested parties could “comment

meaningfully” on the Commission’s use of the

telecommunications management exception.

US Telecom next argues that the Commission violated

the Regulatory Flexibility Act by failing to conduct an

adequate Final Regulatory Flexibility Analysis regarding the

effects of reclassification on small businesses. See 5 U.S.C.

§ 604(a). We lack jurisdiction to entertain this argument.

Under the Communications Act, for a party to challenge an

order based “on questions of fact or law upon which the

Commission . . . has been afforded no opportunity to pass,” a

party must “petition for reconsideration.” 47 U.S.C. § 405(a).

Because the Commission included its Final Regulatory

Flexibility Analysis in the Order, US Telecom had to file a

petition for reconsideration if it wished to object to the

analysis. US Telecom failed to do so.

B.

This brings us to petitioners’ substantive challenges to

reclassification. Specifically, they argue that the Commission

lacks statutory authority to reclassify broadband as a

telecommunications service. They also argue that, even if it

has such authority, the Commission failed to adequately

explain why it reclassified broadband from an information

service to a telecommunications service. Finally, they

contend that the Commission had to determine that broadband

32

providers were common carriers under this court’s NARUC

test in order to reclassify.

1.

In addressing petitioners’ first argument, we follow the

Supreme Court’s decision in Brand X and apply Chevron’s

two-step analysis. Brand X, 545 U.S. at 981 (“[W]e apply the

Chevron framework to the Commission’s interpretation of the

Communications Act.”). At Chevron step one, we ask

“whether Congress has directly spoken to the precise question

at issue.” Chevron, 467 U.S. at 842. Where “the intent of

Congress is clear, that is the end of the matter; for [we], as

well as the agency, must give effect to the unambiguously

expressed intent of Congress.” Id. at 842–43. But if “the

statute is silent or ambiguous with respect to the specific

issue,” we proceed to Chevron step two, where “the question

for the court is whether the agency’s answer is based on a

permissible construction of the statute.” Id. at 843.

As part of its challenge to the Commission’s

reclassification, US Telecom argues that broadband is

unambiguously an information service, which would bar the

Commission from classifying it as a telecommunications

service. The Commission maintains, however, that Brand X

established that the Communications Act is ambiguous with

respect to the proper classification of broadband. As the

Commission points out, the Court explained that whether a

carrier provides a “telecommunications service” depends on

whether it makes an “offering” of telecommunications.

Brand X, 545 U.S. at 989; see also 47 U.S.C. § 153(53) (“The

term ‘telecommunications service’ means the offering of

telecommunications for a fee directly to the public . . . .”

(emphasis added)). The term “offering,” the Court held, is

ambiguous. Brand X, 545 U.S. at 989.

33

Seeking to escape Brand X, US Telecom argues that the

Court held only that the Commission could classify as a

telecommunications service the “last mile” of transmission,

which US Telecom defines as the span between the end user’s

computer and the broadband provider’s computer. Here,

however, the Commission classified “the entire broadband

service from the end user all the way to edge providers” as a

telecommunications service. US Telecom Pet’rs’ Br. 44.

According to US Telecom, “[t]he ambiguity addressed in

Brand X thus has no bearing here because the Order goes

beyond the scope of whatever ambiguity [the statute]

contains.” Id. (second alteration in original) (internal

quotation marks omitted).

We have no need to resolve this dispute because, even if

the Brand X decision was only about the last mile, the Court

focused on the nature of the functions broadband providers

offered to end users, not the length of the transmission

pathway, in holding that the “offering” was ambiguous. As

discussed earlier, the Commission adopted that approach in

the Order in concluding that the term was ambiguous as to the

classification question presented here: whether the “offering”

of broadband internet access service can be considered a

telecommunications service. In doing so, the Commission

acted in accordance with the Court’s instruction in Brand X

that the proper classification of broadband turns “on the

factual particulars of how Internet technology works and how

it is provided, questions Chevron leaves to the Commission to

resolve in the first instance.” 545 U.S. at 991.

US Telecom makes several arguments in support of its

contrary position that broadband is unambiguously an

information service. None persuades us. First, US Telecom

contends that the statute’s text makes clear that broadband

service “qualifies under each of the eight, independent parts

34

of the [information service] definition,” US Telecom Pet’rs’

Br. 30—namely, that it “offer[s] . . . a capability for

generating, acquiring, storing, transforming, processing,

retrieving, utilizing, or making available information via

telecommunications,” 47 U.S.C. § 153(24). Accordingly, US

Telecom argues, broadband service “cannot fall within the

mutually exclusive category of telecommunications service.”

US Telecom Pet’rs’ Br. 30 (internal quotation marks and

footnote omitted). But this argument ignores that under the

statute’s definition of “information service,” such services are

provided “via telecommunications.” 47 U.S.C. § 153(24).

This, then, brings us back to the basic question: do broadband

providers make a standalone offering of telecommunications?

US Telecom’s argument fails to provide an unambiguous

answer to that question.

US Telecom next claims that 47 U.S.C. § 230, enacted as

part of the Communications Decency Act of 1996, a portion

of the Telecommunications Act, “confirms that Congress

understood Internet access to be an information service.” US

Telecom Pet’rs’ Br. 33. Section 230(b) states that “[i]t is the

policy of the United States . . . to promote the continued

development of the Internet and other interactive computer

services and other interactive media.” 47 U.S.C. § 230(b)(1).

In turn, section 230(f) defines an “interactive computer

service” “[a]s used in this section” as “any information

service, system, or access software provider that provides or

enables computer access by multiple users to a computer

server, including specifically a service or system that provides

access to the Internet.” Id. § 230(f)(2). According to US

Telecom, this definition of “interactive computer service”

makes clear that an information service “includes an Internet

access service.” US Telecom Pet’rs’ Br. 33. As the

Commission pointed out in the Order, however, it is “unlikely

that Congress would attempt to settle the regulatory status of

35

broadband Internet access services in such an oblique and

indirect manner, especially given the opportunity to do so

when it adopted the Telecommunications Act of 1996.” 30

FCC Rcd. at 5777 ¶ 386; see Whitman v. American Trucking

Ass’ns, 531 U.S. 457, 468 (2001) (“Congress . . . does not

alter the fundamental details of a regulatory scheme in vague

terms or ancillary provisions—it does not, one might say, hide

elephants in mouseholes.”).

Finally, US Telecom argues that “[t]he statutory context

and history confirm the plain meaning of the statutory text.”

US Telecom Pet’rs’ Br. 33. According to US Telecom, while

the Computer II regime was in effect, the Commission

classified “gateway services allowing access to information

stored by third parties” as enhanced services, and Congress

incorporated that classification into the Communications Act

when it enacted the Telecommunications Act’s

information/telecommunications service dichotomy. Id. at

33–35. “Those ‘gateways,’” US Telecom insists, “involved

the same ‘functions and services associated with Internet

access.’” Id. at 34 (quoting In re Federal-State Joint Board on

Universal Service, 13 FCC Rcd. 11,501 ¶ 75 (1998)). This

argument suffers from a significant flaw: nothing in the

Telecommunications Act suggests that Congress intended to

freeze in place the Commission’s existing classifications of

various services. Indeed, such a reading of the

Telecommunications Act would conflict with the Supreme

Court’s holding in Brand X that classification of broadband

“turns . . . on the factual particulars of how Internet

technology works and how it is provided, questions Chevron

leaves to the Commission to resolve in the first instance.”

545 U.S. at 991.

Amici Members of Congress in Support of Petitioners

advance an additional argument that post-

36

Telecommunications Act legislative history “demonstrates

that Congress never delegated to the Commission” authority

to regulate broadband service as a telecommunications

service. Members of Congress for Pet’rs Amicus Br. 4. In

support, they point out that Congress has repeatedly tried and

failed to enact open internet legislation, confirming, in their

view, that the Commission lacks authority to issue open

internet rules. But as the Supreme Court has made clear,

courts do not regard Congress’s “attention” to a matter

subsequently resolved by an agency pursuant to statutory

authority as “legislative history demonstrating a congressional

construction of the meaning of the statute.” American

Trucking Ass’ns v. Atchison, Topeka, & Santa Fe Railway

Co., 387 U.S. 397, 416–17 (1967). Following this approach,

we have rejected attempts to use legislative history to cabin an

agency’s statutory authority in the manner amici propose. For

example, in Advanced Micro Devices v. Civil Aeronautics

Board, petitioners challenged the Civil Aeronautics Board’s

rules adopting a more deferential approach to the regulation

of international cargo rates. 742 F.2d 1520, 1527–28 (D.C.

Cir. 1984). Petitioners asserted that the Board had no

authority to promulgate the rules because “Congress

deliberately eschewed the course now advanced by the

[Board],” id. at 1541, when it tried and failed to enact

legislation that would have put “limits on the Board’s

ratemaking functions regarding international cargo,” id. at

1523. Rejecting petitioners’ argument, we explained that

“Congress’s failure to enact legislation . . . d[oes] not

preclude analogous rulemaking.” Id. at 1542 (citing

American Trucking Ass’ns, 387 U.S. at 416–18). In that case,

as here, the relevant question was whether the agency had

statutory authority to promulgate its regulations, and, as we

explained, “congressional inaction or congressional action

short of the enactment of positive law . . . is often entitled to

no weight” in answering that question. Id. at 1541. Amici

37

also argue that Congress’s grants to the Commission of

“narrow authority over circumscribed aspects of the Internet”

indicate that the Commission lacks “the authority it claims

here.” Members of Congress for Pet’rs Amicus Br. 9. None

of the statutes amici cite, however, have anything to do with

the sort of common carrier regulations at issue here.

Full Service Network also urges us to resolve this case at

Chevron step one, though it takes the opposite position of US

Telecom. According to Full Service Network, broadband is

unambiguously a telecommunications service because it

functions primarily as a transmission service. That argument

clearly fails in light of Brand X, which held that classification

of broadband as an information service was permissible.

Brand X also requires that we reject intervenor

TechFreedom’s argument that the reclassification issue is

controlled by the Supreme Court’s decision in FDA v. Brown

& Williamson Tobacco Corp., 529 U.S. 120 (2000). In that

case, the Court held that “Congress ha[d] clearly precluded

the FDA from asserting jurisdiction to regulate tobacco

products.” Id. at 126. The Court emphasized that the FDA

had disclaimed any authority to regulate tobacco products for

more than eighty years and that Congress had repeatedly

legislated against this background. Id. at 143–59.

Furthermore, the Court observed, if the FDA did have

authority to regulate the tobacco industry, given its statutory

obligations and its factual findings regarding the harmful

effects of tobacco, the FDA would have had to ban tobacco

products, a result clearly contrary to congressional intent. See

id. at 135–43. If Congress sought to “delegate a decision of

such economic and political significance” to the agency, the

Court noted, it would have done so clearly. Id. at 160.

Relying on Brown & Williamson, TechFreedom urges us to

38

exercise “judicial skepticism of the [Commission’s] power

grab.” TechFreedom Intervenor Br. 18.

TechFreedom ignores Brand X. As explained above, the

Supreme Court expressly recognized that Congress, by

leaving a statutory ambiguity, had delegated to the

Commission the power to regulate broadband service. By

contrast, in Brown & Williamson the Court held that Congress

had “precluded” the FDA from regulating cigarettes.

This brings us, then, to petitioners’ and intervenors’

Chevron step two challenges.

First, US Telecom argues that the Commission’s

classification is unreasonable because many broadband

providers offer information services, such as email, alongside

internet access. According to US Telecom, because

broadband providers still offer such services, consumers must

perceive that those providers offer an information service.

For its part, the Commission agreed that broadband providers

offer email and other services, but simply concluded that

“broadband Internet access service is today sufficiently

independent of these information services that it is a separate

offering.” 2015 Open Internet Order, 30 FCC Rcd. at 5758

¶ 356. US Telecom nowhere challenges that conclusion, and

for good reason: the record contains extensive evidence that

consumers perceive a standalone offering of transmission,

separate from the offering of information services like email

and cloud storage. See supra at 25–27.

US Telecom next contends that the Commission’s

reclassification of broadband was unreasonable because DNS

and caching do not fall within the Communications Act’s

telecommunications management exception. As noted above,

that exception excludes from the definition of an information

service “any [service] for the management, control, or

39

operation of a telecommunications system or the management

of a telecommunications service.” 47 U.S.C. § 153(24). The

Commission found that “[w]hen offered as part of a

broadband Internet access service, caching [and] DNS [are]

simply used to facilitate the transmission of information so

that users can access other services.” 2015 Open Internet

Order, 30 FCC Rcd. at 5770 ¶ 372. Challenging this

interpretation, US Telecom argues that DNS and caching fall

outside the exception because neither “manage[s] a

telecommunications system or service,” US Telecom Pet’rs’

Br. 39, but are instead examples of the “many core

information-service functions associated with Internet

access,” id. at 37. US Telecom claims that the Commission’s

use of the telecommunications management exception was

also unreasonable because the Commission “contends that the

same functions—DNS and caching—are used for

telecommunications management when offered as part of

Internet access, but are an information service when third-

party content providers similarly offer them.” Id. at 40. We

are unpersuaded.

First, the Commission explained that the

Communications Act’s telecommunications management

exception encompasses those services that would have

qualified as “adjunct-to-basic” under the Computer II regime.

2015 Open Internet Order, 30 FCC Rcd. at 5766–67 ¶ 367

(citing Non-Accounting Safeguards Order, 11 FCC Rcd. at

21,958 ¶ 107). To qualify as an adjunct-to-basic service, a

service had to be “‘basic in purpose and use’ in the sense that

[it] facilitate[d] use of the network, and . . . [it] could ‘not

alter the fundamental character of the [telecommunications

service].’” Id. at 5767 ¶ 367 (last alteration in original)

(quoting In re North American Telecommunications Ass’n,

101 F.C.C. 2d 349, 359 ¶ 24, 360 ¶ 27 (1985)) (some internal

quotation marks omitted). The Commission concluded that

40

DNS and caching satisfy this test because both services

facilitate use of the network without altering the fundamental

character of the telecommunications service. DNS does so by

“allow[ing] more efficient use of the telecommunications

network by facilitating accurate and efficient routing from the

end user to the receiving party.” Id. at 5768 ¶ 368. Caching

qualifies because it “enabl[es] the user to obtain more rapid

retrieval of information through the network.” Id. at 5770

¶ 372 (internal quotation marks omitted). US Telecom does

not challenge the applicability of the adjunct-to-basic

standard, nor does it give us any reason to believe that the

Commission’s application of that standard was unreasonable.

See GTE Service Corp. v. FCC, 224 F.3d 768, 772 (D.C. Cir.

2000) (“[W]e will defer to the [Commission’s] interpretation

of [the Communications Act] if it is reasonable in light of the

text, the structure, and the purpose of [the Communications

Act].”).

As to US Telecom’s second point, the Commission

justified treating third-party DNS and caching services

differently on the ground that when such services are

“provided on a stand-alone basis by entities other than the

provider of Internet access service[,] . . . there would be no

telecommunications service to which [the services are]

adjunct.” 2015 Open Internet Order, 30 FCC Rcd. at 5769

¶ 370 n.1046. Again, US Telecom has given us no basis for

questioning the reasonableness of this conclusion. Once a

carrier uses a service that would ordinarily be an information

service—such as DNS or caching—to manage a

telecommunications service, that service no longer qualifies

as an information service under the Communications Act.

The same service, though, when unconnected to a

telecommunications service, remains an information service.

41

Intervenor TechFreedom makes one additional Chevron

step two argument. It contends that this case resembles

Utility Air Regulatory Group v. EPA, in which the Supreme

Court reviewed EPA regulations applying certain statutory

programs governing air pollution to greenhouse gases. 134 S.

Ct. 2427, 2437 (2014). EPA had “tailored” the programs to

greenhouse gases by using different numerical thresholds for

triggering application of the programs than those listed in the

statute because using “the statutory thresholds would [have]

radically expand[ed] those programs.” Id. at 2437–38.

Rejecting this approach, the Supreme Court held that because

the statute’s numerical thresholds were “unambiguous,” EPA

had no “authority to ‘tailor’ [them] to accommodate its

greenhouse-gas-inclusive interpretation of the permitting

triggers.” Id. at 2446. “[T]he need to rewrite clear provisions

of the statute,” the Court declared, “should have alerted EPA

that it had taken a wrong interpretive turn.” Id. According to

TechFreedom, the Commission’s need to extensively forbear

from Title II similarly reveals the “incoherence” of its

decision. TechFreedom Intervenor Br. 21.

This case is nothing like Utility Air. Far from rewriting

clear statutory language, the Commission followed an express

statutory mandate requiring it to “forbear from applying any

regulation or any provision” of the Communications Act if

certain criteria are met. 47 U.S.C. § 160(a). Nothing in the

Clean Air Act gave EPA any comparable authority.

Accordingly, the Commission’s extensive forbearance does

not suggest that the Order is unreasonable.

2.

We next consider US Telecom’s argument that the

Commission failed to adequately explain why, having long

classified broadband as an information service, it chose to

reclassify it as a telecommunications service. Under the

42

APA, we must “determine whether the Commission’s actions

were ‘arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.’” Verizon, 740 F.3d at

635 (quoting 5 U.S.C. § 706(2)(A)). As noted at the outset of

our opinion, “[o]ur role in this regard is a limited one, and we

will not substitute our judgment for that of the agency.”

EarthLink, Inc. v. FCC, 462 F.3d 1, 9 (D.C. Cir. 2006).

Provided that the Commission has “articulate[d] . . . a

‘rational connection between the facts found and the choice

made,’” we will uphold its decision. Verizon, 740 F.3d at

643–44 (alteration in original) (quoting State Farm, 463 U.S.

at 52) (some internal quotation marks omitted); see also

FERC v. Electric Power Supply Ass’n, 136 S. Ct. 760, 784

(2016) (“Our important but limited role is to ensure that [the

agency] engaged in reasoned decisionmaking—that it

weighed competing views, selected [an approach] with

adequate support in the record, and intelligibly explained the

reasons for making that choice.”).

As relevant here, “[t]he APA’s requirement of reasoned

decision-making ordinarily demands that an agency

acknowledge and explain the reasons for a changed

interpretation.” Verizon, 740 F.3d at 636. “An agency may

not, for example, depart from a prior policy sub silentio or

simply disregard rules that are still on the books.” FCC v.

Fox Television Stations, Inc., 556 U.S. 502, 515 (2009). That

said, although the agency “must show that there are good

reasons for the new policy[,] . . . it need not demonstrate to a

court’s satisfaction that the reasons for the new policy are

better than the reasons for the old one.” Id.

US Telecom contends that the Commission lacked good

reasons for reclassifying broadband because “as Verizon made

clear, and as the [Commission] originally recognized, it could

have adopted appropriate Open Internet rules based upon

43

§ 706 without reclassifying broadband.” US Telecom Pet’rs’

Br. 54 (internal citations omitted). But the Commission did

not believe it could do so. Specifically, the Commission

found it necessary to establish three bright-line rules, the anti-

blocking, anti-throttling, and anti-paid-prioritization rules,

2015 Open Internet Order, 30 FCC Rcd. at 5607 ¶ 14, all of

which impose per se common carrier obligations by requiring

broadband providers to offer indiscriminate service to edge

providers, see Verizon, 740 F.3d at 651–52. “[I]n light of

Verizon,” the Commission explained, “absent a classification

of broadband providers as providing a ‘telecommunications

service,’ the Commission could only rely on section 706 to

put in place open Internet protections that steered clear of

regulating broadband providers as common carriers per se.”

2015 Open Internet Order, 30 FCC Rcd. at 5614 ¶ 42. This,

in our view, represents a perfectly “good reason” for the

Commission’s change in position.

Raising an additional argument, US Telecom asserts that

reclassification “will undermine” investment in broadband.

US Telecom Pet’rs’ Br. 54. The partial dissent agrees,

pointing specifically to 47 U.S.C. § 207, which subjects Title

II common carriers to private complaints. Concurring &

Dissenting Op. at 24. The Commission, however, reached a

different conclusion with respect to reclassification’s impact

on broadband investment. It found that “Internet traffic is

expected to grow substantially in the coming years,” driving

investment, 2015 Open Internet Order, 30 FCC Rcd. at 5792

¶ 412; that Title II regulation had not stifled investment when

applied in other circumstances, id. at 5793–94 ¶ 414; and that

“major infrastructure providers have indicated that they will

in fact continue to invest under the [Title II] framework,” id.

at 5795 ¶ 416. In any event, the Commission found that the

virtuous cycle—spurred by the open internet rules—provides

an ample counterweight, in that any harmful effects on

44

broadband investment “are far outweighed by positive effects

on innovation and investment in other areas of the ecosystem

that [its] core broadband polices will promote.” Id. at 5791 ¶

410. In reviewing these conclusions, we ask not whether they

“are correct or are the ones that we would reach on our own,

but only whether they are reasonable.” EarthLink, 462 F.3d

at 12 (internal quotation marks omitted). Moreover, “[a]n

agency’s predictive judgments about areas that are within the

agency’s field of discretion and expertise are entitled to

particularly deferential review, as long as they are

reasonable.” Id. (internal quotation marks omitted). The

Commission has satisfied this highly deferential standard. As

to section 207, the Commission explained that “[a]lthough [it]

appreciate[d] carriers’ concerns that [its] reclassification

decision could create investment-chilling regulatory burdens

and uncertainty, [it] believe[d] that any effects are likely to be

short term and will dissipate over time as the marketplace

internalizes [the] Title II approach.” 2015 Open Internet

Order, 30 FCC Rcd. at 5791 ¶ 410. This too is precisely the

kind of “predictive judgment[] . . . within the agency’s field of

discretion and expertise” that we do not second guess.

In a related argument, the partial dissent contends that the

Commission lacked “good reasons” for reclassifying because

its rules, particularly the General Conduct Rule, will decrease

future investment in broadband by increasing regulatory

uncertainty. Although US Telecom asserts in the introduction

to its brief that the rules “will undermine future investment by

large and small broadband providers,” US Telecom Pet’rs’ Br.

4, it provides no further elaboration on this point and never

challenges reclassification on the ground that the rules will

harm broadband investment. As we have said before, “[i]t is

not enough merely to mention a possible argument in the most

skeletal way, leaving the court to do counsel’s work.” New

York Rehabilitation Care Management, LLC v. NLRB, 506

45

F.3d 1070, 1076 (D.C. Cir. 2007) (internal quotation marks

omitted). Given that no party adequately raised this

argument, we decline to consider it. See In re Cheney, 334

F.3d at 1108 (Reviewing courts “sit to resolve only legal

questions presented and argued by the parties.”).

Finally, the partial dissent disagrees with our conclusion

that the Commission had “good reasons” to reclassify

because, according to the partial dissent, it failed to make “a

finding of market power or at least a consideration of

competitive conditions.” Concurring & Dissenting Op. at 10.

But nothing in the statute requires the Commission to make

such a finding. Under the Act, a service qualifies as a

“telecommunications service” as long as it constitutes an

“offering of telecommunications for a fee directly to the

public.” 47 U.S.C. § 153(53). As explained above, supra at

24, when interpreting this provision in Brand X, the Supreme

Court held that classification of broadband turns on consumer

perception, see 545 U.S. at 990 (explaining that classification

depends on what “the consumer perceives to be the integrated

finished product”). Nothing in Brand X suggests that an

examination of market power or competition in the market is

a prerequisite to classifying broadband. True, as the partial

dissent notes, the Supreme Court cited the Commission’s

findings regarding the level of competition in the market for

cable broadband as further support for the agency’s decision

to classify cable broadband as an information service. See id.

at 1001 (describing the Commission’s conclusion that market

conditions supported taking a deregulatory approach to cable

broadband service). But citing the Commission’s economic

findings as additional support for its approach is a far cry

from requiring the Commission to find market power. The

partial dissent also cites several Commission decisions in

support of the proposition that the Commission has “for

nearly four decades made the presence or prospect of

46

competition the touchstone for refusal to apply Title II.”

Concurring & Dissenting Op. at 12. All of those cases,

however, predate the 1996 Telecommunications Act, which

established the statutory test that Brand X considered and that

we apply here.

US Telecom raises a distinct arbitrary and capricious

argument. It contends that the Commission needed to satisfy

a heightened standard for justifying its reclassification. As

US Telecom points out, the Supreme Court has held that “the

APA requires an agency to provide more substantial

justification when ‘its new policy rests upon factual findings

that contradict those which underlay its prior policy; or when

its prior policy has engendered serious reliance interests that

must be taken into account.’” Perez v. Mortgage Bankers

Ass’n, 135 S. Ct. 1199, 1209 (2015) (quoting Fox Television,

556 U.S. at 515). “[I]t is not that further justification is

demanded by the mere fact of policy change[,] but that a

reasoned explanation is needed for disregarding facts and

circumstances that underlay or were engendered by the prior

policy.” Fox Television, 556 U.S. at 515–16. Put another

way, “[i]t would be arbitrary and capricious to ignore such

matters.” Id. at 515.

US Telecom believes that the Commission failed to

satisfy the heightened standard because it departed from

factual findings it made regarding consumer perception in its

2002 Cable Broadband Order without pointing to any changes

in how consumers actually view broadband. According to US

Telecom, even in 2002, when the Commission classified

broadband as an information service, consumers used

broadband primarily as a means to access third-party content

and broadband providers marketed their services based on

speed. As we have explained, however, although in 2002 the

Commission found that consumers perceived an integrated

47

offering of an information service, in the present order the

Commission cited ample record evidence supporting its

current view that consumers perceive a standalone offering of

transmission. See supra at 25–27. It thus satisfied the APA’s

requirement that an agency provide a “reasoned

explanation . . . for disregarding facts and circumstances that

underlay . . . the prior policy.” Fox Television, 556 U.S. at

515–16. Nothing more is required.

Presenting an argument quite similar to US Telecom’s,

the partial dissent asserts that the Commission needed to do

more than justify its current factual findings because, in this

case, “the agency explicitly invoke[d] changed

circumstances” as a basis for reclassifying broadband.

Concurring & Dissenting Op. at 10. At least when an agency

relies on a change in circumstances, the partial dissent

reasons, “Fox requires us to examine whether there is really

anything new.” Id. at 4. But we need not decide whether

there “is really anything new” because, as the partial dissent

acknowledges, id., the Commission concluded that changed

factual circumstances were not critical to its classification

decision: “[E]ven assuming, arguendo, that the facts

regarding how [broadband service] is offered had not

changed, in now applying the Act’s definitions to these facts,

we find that the provision of [broadband service] is best

understood as a telecommunications service, as discussed

[herein] . . . and disavow our prior interpretations to the extent

they held otherwise.” 2015 Open Internet Order, 30 FCC

Rcd. at 5761 ¶ 360 n.993.

US Telecom next argues that the Commission “could not

rationally abandon its prior policy without account[ing] for

reliance interests that its prior policy engendered.” US

Telecom Pet’rs’ Br. 51 (alteration in original) (internal

quotation marks omitted). The Commission, however, did not

48

fail to “account” for reliance interests. Fox Television, 556

U.S. at 515. Quite to the contrary, it expressly considered the

claims of reliance and found that “the regulatory status of

broadband Internet access service appears to have, at most, an

indirect effect (along with many other factors) on

investment.” 2015 Open Internet Order, 30 FCC Rcd. at 5760

¶ 360. The Commission explained that “the key drivers of

investment are demand and competition,” not the form of

regulation. Id. at 5792 ¶ 412. Additionally, the Commission

noted that its past regulatory treatment of broadband likely

had a particularly small effect on investment because the

regulatory status of broadband service was settled for only a

short period of time. Id. at 5760–61 ¶ 360. As the

Commission pointed out, just five years after Brand X upheld

the Commission’s classification of broadband as an

information service, the Commission asked in a notice of

inquiry whether it should reclassify broadband as a

telecommunications service. Id. at 5760 ¶ 360.

The partial dissent finds the Commission’s explanation

insufficient and concludes that it failed “to make a serious

assessment of [broadband providers’] reliance.” Concurring

& Dissenting Op. at 8. With regard to the Commission’s

conclusion that the regulatory status of broadband had only an

indirect effect on investment, the partial dissent believes that

this explanation is an “irrelevance” because “[t]he proposition

that ‘many other factors’ affect investment is a truism” and

thus the explanation “tells us little about how much” the prior

classification “accounts for the current robust broadband

infrastructure.” Id. at 5. But the Commission did more than

simply state that the regulatory classification of broadband

was one of many relevant factors. It went on to explain why

other factors, namely, increased demand for broadband and

increased competition to provide it, were more significant

drivers of broadband investment. 2015 Open Internet Order,

49

30 FCC Rcd. at 5760 ¶ 360 & n.986; id. at 5792 ¶ 412. We

also disagree with the partial dissent’s assertion that the

Commission “misread[] the history of the classification of

broadband” when it found that the unsettled regulatory

treatment of broadband likely diminished the extent of

investors’ reliance on the prior classification. Concurring &

Dissenting Op. at 7. As explained above, supra at 13–16, the

Commission classified broadband for the first time in 1998,

when it determined that the phone lines used in DSL service

qualified as a telecommunications service. See Advanced

Services Order, 13 FCC Rcd. at 24,014 ¶ 3, 24,029–30 ¶¶ 35–

36. Then, in 2002 the Commission classified cable broadband

service as an information service, see Cable Broadband Order,

17 FCC Rcd. at 4823 ¶¶ 39–40, a classification that was

challenged and not definitively settled until 2005 when the

Supreme Court decided Brand X. Only five years later, the

Commission sought public comment on whether it should

reverse course and classify broadband as a

telecommunications service. See In re Framework for

Broadband Internet Service, 25 FCC Rcd. at 7867 ¶ 2. Given

this shifting regulatory treatment, it was not unreasonable for

the Commission to conclude that broadband’s particular

classification was less important to investors than increased

demand. Contrary to our colleague, “[w]e see no reason to

second guess these factual determinations, since the court

properly defers to policy determinations invoking the

[agency’s] expertise in evaluating complex market

conditions.” Gas Transmission Northwest Corp. v. FERC,

504 F.3d 1318, 1322 (D.C. Cir. 2007) (internal quotation

marks and alteration omitted).

3.

Finally, we consider US Telecom’s argument that the

Commission could not reclassify broadband without first

determining that broadband providers were common carriers

50

under this court’s NARUC test. See National Ass’n of

Regulatory Utility Commissioners v. FCC, 533 F.2d 601

(D.C. Cir. 1976); National Ass’n of Regulatory Utility

Commissioners v. FCC, 525 F.2d 630 (D.C. Cir. 1976).

Under that test, “a carrier has to be regulated as a common

carrier if it will make capacity available to the public

indifferently or if the public interest requires common carrier

operation.” Virgin Islands Telephone Corp. v. FCC, 198 F.3d

921, 924 (D.C. Cir. 1999) (internal quotation marks omitted).

As the Commission points out, however, this argument

ignores that the Communications Act “provides that ‘[a]

telecommunications carrier shall be treated as a common

carrier . . . to the extent that it is engaged in providing

telecommunications services,’” Resp’ts’ Br. 79 (alteration and

omission in original) (quoting 47 U.S.C. § 153(51)), and that

“[t]he Act thus authorizes—indeed, requires—broadband

providers to be treated as common carriers once they are

found to offer telecommunications service,” id. The

Communications Act in turn defines a telecommunications

service as “the offering of telecommunications for a fee

directly to the public,” 47 U.S.C. § 153(53), and the

Commission found that broadband providers satisfy this

statutory test: “[h]aving affirmatively determined that

broadband Internet access service involves

‘telecommunications,’ we also find . . . that broadband

Internet access service providers offer broadband Internet

access service ‘directly to the public.’” 2015 Open Internet

Order, 30 FCC Rcd. at 5763 ¶ 363. Other than challenging

the Commission’s interpretation of the term “offering”—an

argument which we have already rejected, see supra section

II.B.1—US Telecom never questions the Commission’s

application of the statute’s test for common carriage.

Moreover, US Telecom cites no case, nor are we aware of

one, holding that when the Commission invokes the statutory

test for common carriage, it must also apply the NARUC test.

51

III.

Having thus rejected petitioners’ arguments against

reclassification, we turn to US Telecom’s challenges to the

Commission’s regulation of interconnection arrangements—

arrangements that broadband providers make with other

networks to exchange traffic in order to ensure that their end

users can access edge provider content anywhere on the

internet. Broadband providers have such arrangements with

backbone networks, as well as with certain edge providers,

such as Netflix, that connect directly to broadband provider

networks. In the Order, the Commission found that regulation

of interconnection arrangements was necessary to ensure

broadband providers do not “use terms of interconnection to

disadvantage edge providers” or “prevent[] consumers from

reaching the services and applications of their choosing.”

2015 Open Internet Order, 30 FCC Rcd. at 5694 ¶ 205.

Several commenters, the Commission pointed out, had

emphasized “the potential for anticompetitive behavior on the

part of broadband Internet access service providers that serve

as gatekeepers to the edge providers . . . seeking to deliver

Internet traffic to the broadband providers’ end users.” Id. at

5691 ¶ 200.

As authority for regulating interconnection arrangements,

the Commission relied on Title II. “Broadband Internet

access service,” it explained, “involves the exchange of traffic

between a . . . broadband provider and connecting networks,”

since “[t]he representation to retail customers that they will be

able to reach ‘all or substantially all Internet endpoints’

necessarily includes the promise to make the interconnection

arrangements necessary to allow that access.” Id. at 5693–94

¶ 204. Because the “same data is flowing between the end

user and edge consumer,” the end user necessarily

experiences any discriminatory treatment of the edge

provider, the Commission reasoned, making interconnection

52

“simply derivative of” the service offered to end users. Id. at

5748–49 ¶ 339.

As a result, the Commission concluded that it could

regulate interconnection arrangements under Title II as a

component of broadband service. Id. at 5686 ¶ 195. It

refrained, however, from applying the General Conduct Rule

or any of the bright-line rules to interconnection arrangements

because, given that it “lack[ed] [a] background in practices

addressing Internet traffic exchange,” it would be “premature

to adopt prescriptive rules to address any problems that have

arisen or may arise.” Id. at 5692–93 ¶ 202. Rather, it

explained that interconnection disputes would be evaluated on

a case-by-case basis under sections 201, 202, and 208 of the

Communications Act. See id. at 5686–87 ¶ 195. US Telecom

presents two challenges to the Commission’s decision to

regulate interconnection arrangements under Title II, one

procedural and one substantive. We reject both.

Echoing its arguments with respect to reclassification, US

Telecom first claims that the NPRM provided inadequate

notice that the Commission would regulate interconnection

arrangements under Title II. As we noted above, an NPRM

satisfies APA notice obligations when it “expressly ask[s] for

comments on a particular issue or otherwise ma[kes] clear

that the agency [is] contemplating a particular change.” CSX

Transportation, Inc., 584 F.3d at 1081. The NPRM did just

that. It expressly asked whether the Commission should

apply its new rules—rules which it had signaled might depend

upon Title II reclassification, NPRM, 29 FCC Rcd. at 5612

¶ 148—to interconnection arrangements. The NPRM

explained that the 2010 Open Internet Order had applied only

“to a broadband provider’s use of its own network . . . but

[had] not appl[ied] . . . to the exchange of traffic between

networks.” NPRM, 29 FCC Rcd. at 5582 ¶ 59. Although the

53

Commission “tentatively conclude[d] that [it] should maintain

this approach, . . . [the NPRM sought] comment on whether

[the Commission] should change [its] conclusion.” Id.

US Telecom insists that the NPRM was nonetheless

inadequate because it nowhere suggested that the Commission

might justify regulating interconnection arrangements under

Title II on the basis that they are a component of the offering

of telecommunications to end users. Under the APA, an

NPRM provides adequate notice as long as it reveals the

“substance of the proposed rule or a description of the

subjects and issues involved.” 5 U.S.C. § 553(b)(3). An

NPRM does so if it “provide[s] sufficient factual detail and

rationale for the rule to permit interested parties to comment

meaningfully.” Honeywell International, Inc., 372 F.3d at

445 (internal quotation marks omitted). Again, the NPRM

did just that. It asked whether the Commission should expand

its reach beyond “a broadband provider’s use of its own

network” in order to “ensure that a broadband provider would

not be able to evade our open Internet rules by engaging in

traffic exchange practices.” NPRM, 29 FCC Rcd. at 5582

¶ 59. By focusing on the threat that broadband providers

might block edge provider access to end users at an earlier

point in the transmission pathway, the NPRM allowed

interested parties to comment meaningfully on the possibility

that the Commission would consider interconnection

arrangements to be part of the offering of telecommunications

to end users. Indeed, interested parties interpreted the NPRM

as presenting just that possibility. To take one example,

COMPTEL explained in its comments that “as feared by the

Commission in its [NPRM], a [broadband] provider can

simply evade the Commission’s 2010 rules by moving its

demand for an access fee upstream to the entry point to the

[broadband provider’s network].” Letter from Markham C.

Erickson, Counsel to COMPTEL, to Marlene H. Dortch,

54

FCC, GN Dkt. Nos. 14-28 & 10-127, at 10 (Feb. 19, 2015).

Because “[t]he interconnection point is simply a literal

extension of the [broadband provider’s network],”

COMPTEL explained, “applying the same open Internet rules

to the point of interconnection is a logical extension of the

2010 Open Internet Order and clearly in line with the

Commission’s . . . proposal [in the NPRM].” Id.

US Telecom next argues that our decision in Verizon

prevents the Commission from regulating interconnection

arrangements under Title II without first classifying the

arrangements as an offering of telecommunications to edge

providers and backbone networks. As US Telecom points

out, Verizon recognized that broadband, and thus

interconnection arrangements, provides a service not only to

end users but also to edge providers and backbone networks,

namely, the ability to reach the broadband provider’s users.

Verizon, 740 F.3d at 653. According to US Telecom, Verizon

therefore requires the Commission to classify this service to

edge providers and backbone networks as a

telecommunications service before it regulates

interconnection arrangements under Title II.

US Telecom misreads Verizon. Although Verizon does

recognize that broadband providers’ delivery of broadband to

end users also provides a service to edge providers, id., it does

not hold that the Commission must classify broadband as a

telecommunications service in both directions before it can

regulate the interconnection arrangements under Title II. The

problem in Verizon was not that the Commission had

misclassified the service between carriers and edge providers

but that the Commission had failed to classify broadband

service as a Title II service at all. The Commission overcame

this problem in the Order by reclassifying broadband

55

service—and the interconnection arrangements necessary to

provide it—as a telecommunications service.

IV.

We now turn to the Commission’s treatment of mobile

broadband service, i.e., high-speed internet access for mobile

devices such as smartphones and tablets. As explained above,

the Commission permissibly found that mobile broadband—

like all broadband—is a telecommunications service subject

to common carrier regulation under Title II of the

Communications Act. We address here a second set of

provisions that pertain to the treatment of mobile broadband

as common carriage.

Those provisions, found in Title III of the

Communications Act, segregate “mobile services” into two,

mutually exclusive categories: “commercial mobile services”

and “private mobile services.” 47 U.S.C. § 332(c). Providers

of commercial mobile services—mobile services that are,

among other things, available “to the public” or “a substantial

portion of the public”—are subject to common carrier

regulation. Id. § 332(c)(1), (d)(1). Providers of private

mobile services, by contrast, “shall not . . . be treated as []

common carrier[s].” Id. § 332(c)(2).

In 2007, the Commission initially classified mobile

broadband as a private mobile service. At the time, the

Commission considered mobile broadband a “nascent”

service. 2007 Wireless Order, 22 FCC Rcd. at 5922 ¶ 59. In

the 2015 Order we now review, the Commission found that,

“[i]n sharp contrast to 2007,” the “mobile broadband

marketplace has evolved such that hundreds of millions of

consumers now use mobile broadband to access the Internet.”

2015 Open Internet Order, 30 FCC Rcd. at 5785 ¶ 398. The

Commission thus concluded that “today’s mobile broadband

56

Internet access service, with hundreds of millions of

subscribers,” is not a “private” mobile service “that offer[s]

users access to a discrete and limited set of endpoints.” Id. at

5788–89 ¶ 404. Rather, “[g]iven the universal access

provided today and in the foreseeable future by and to mobile

broadband and its present and anticipated future penetration

rates in the United States,” the Commission decided to

“classify[] mobile broadband Internet access as a commercial

mobile service” subject to common carrier regulation. Id. at

5786 ¶ 399; see generally id. at 5778–88 ¶¶ 388–403.

Petitioners CTIA and AT&T (“mobile petitioners”)

challenge the Order’s reclassification of mobile broadband as

a commercial mobile service. In their view, mobile

broadband is, and must be treated as, a private mobile service,

and therefore cannot be subject to common carrier regulation.

We reject mobile petitioners’ arguments and find that the

Commission’s reclassification of mobile broadband as a

commercial mobile service is reasonable and supported by the

record.

A.

In assessing whether the Commission permissibly

reclassified mobile broadband as a commercial rather than a

private mobile service, we begin with an overview of the

governing statutory and regulatory framework and of the

Commission’s application of that framework to mobile

broadband. The statute defines “commercial mobile service”

as “any mobile service . . . that is provided for profit and

makes interconnected service available (A) to the public or

(B) to such classes of eligible users as to be effectively

available to a substantial portion of the public, as specified by

regulation by the Commission.” 47 U.S.C. § 332(d)(1). The

statute then defines “private mobile service” strictly in the

negative, i.e., as “any mobile service . . . that is not a

57

commercial mobile service or the functional equivalent of a

commercial mobile service, as specified by regulation by the

Commission.” Id. § 332(d)(3).

Because private mobile service is a residual category

defined in relation to commercial mobile service, the

definition of commercial mobile service is the operative one

for our purposes. There is no dispute that mobile broadband

meets three of the four parts of the statutory definition of

commercial mobile service. Mobile broadband is a “mobile

service”; it “is provided for profit”; and it is available “to the

public” or “a substantial portion of the public.” Id.

§ 332(d)(1). In those respects, mobile broadband bears the

hallmarks of a commercial—and hence not a private—mobile

service. The sole remaining question is whether mobile

broadband also “makes interconnected service available.” Id.

The statute defines “interconnected service” as “service

that is interconnected with the public switched network (as

such terms are defined by regulation by the Commission).”

Id. § 332(d)(2). Until the Order, the Commission in turn

defined the “public switched network” as a set of telephone

(cellular and landline) networks, with users’ ten-digit

telephone numbers making up the interconnected endpoints of

the network. Specifically, “public switched network” meant

“[a]ny common carrier switched network . . . that use[s] the

North American Numbering Plan in connection with the

provision of switched services.” 47 C.F.R. § 20.3 (prior

version effective through June 11, 2015). The “North

American Numbering Plan” (NANP) is the ten-digit

telephone numbering plan used in the United States. See In re

Implementation of Sections 3(n) & 332 of the

Communications Act (“1994 Order”), 9 FCC Rcd. 1411, 1437

¶ 60 n.116 (1994).

58

In 1994, when the Commission initially established that

definition of “public switched network,” cellular telephone

(i.e., mobile voice) service was the major mobile service;

mobile broadband did not yet exist. Noting that the “purpose

of the public switched network is to allow the public to send

or receive messages to or from anywhere in the nation,” the

Commission observed that the NANP fulfilled that purpose by

providing users with “ubiquitous access” to all other users.

Id. at 1436–37 ¶¶ 59–60; see 2015 Open Internet Order, 30

FCC Rcd. at 5779 ¶ 391. Because mobile voice users could

interconnect with the public switched network as then defined

(the network of ten-digit telephone numbers), mobile voice

was classified as a “commercial”—as opposed to “private”—

“mobile service.” 1994 Order, 9 FCC Rcd. at 1454–55 ¶ 102.

It therefore was subject to common carrier treatment.

In 2007, the Commission first classified the then-

emerging platform of mobile broadband. The Commission

determined that mobile broadband users could not

interconnect with the public switched network—defined at the

time as the telephone network—because mobile broadband

uses IP addresses, not telephone numbers. See 2015 Open

Internet Order, 30 FCC Rcd. at 5784 ¶ 397; 2007 Wireless

Order, 22 FCC Rcd. at 5917–18 ¶ 45. Mobile broadband thus

was not considered an “interconnected service” (or, therefore,

a commercial mobile service), i.e., a “service that is

interconnected with the public switched network” as that term

was then “defined by . . . the Commission.” 47 U.S.C.

§ 332(d)(2). Presumably in light of mobile broadband’s

“nascent” status at the time, 2007 Wireless Order, 22 FCC

Rcd. at 5922 ¶ 59, the Commission gave no evident

consideration to expanding its definition of the “public

switched network” so as to encompass IP addresses in

addition to telephone numbers.

59

In the 2015 Order, the Commission determined that it

should expand its definition of the public switched network in

that fashion to “reflect[] the current network landscape.” 30

FCC Rcd. at 5779 ¶ 391; see id. at 5786 ¶ 399. The

Commission took note of “evidence of the extensive changes

that have occurred in the mobile marketplace.” Id. at 5785–

86 ¶ 398. For instance, as of the end of 2014, nearly three-

quarters “of the entire U.S. age 13+ population was

communicating with smart phones,” and “by 2019,”

according to one forecast, “North America will have nearly

90% of its installed base[] converted to smart devices and

connections.” Id. at 5785 ¶ 398. In addition, the Commission

noted that the “hundreds of millions of consumers” who

already “use[d] mobile broadband” as of 2015 could “send or

receive communications to or from anywhere in the nation,

whether connected with other mobile broadband subscribers,

fixed broadband subscribers, or the hundreds of millions of

websites available to them over the Internet.” Id. Those

significant developments, the Commission found,

“demonstrate[] the ubiquity and wide scale use of mobile

broadband Internet access service today.” Id. at 5786 ¶ 398.

The upshot is that, just as mobile voice (i.e., cellular

telephone) service in 1994 provided “ubiquitous access” for

members of the public to communicate with one another

“from anywhere in the nation,” mobile broadband by 2015

had come to provide the same sort of ubiquitous access. Id. at

5779–80 ¶ 391, 5785–86 ¶¶ 398–99. And the ubiquitous

access characterizing both mobile voice and mobile

broadband stands in marked contrast to “the private mobile

service[s] of 1994, such as a private taxi dispatch service,

services that offered users access to a discrete and limited set

of endpoints.” Id. at 5789 ¶ 404; see 1994 Order, 9 FCC Rcd.

at 1414 ¶ 4. In recognition of the similarity of mobile

broadband to mobile voice as a universal medium of

60

communication for the general public—and the dissimilarity

of mobile broadband to closed private networks such as those

used by taxi companies or local police and fire departments—

the Commission in 2015 sought to reclassify “today’s broadly

available mobile broadband” service as a commercial mobile

service like mobile voice, rather than as a private mobile

service like those employed by closed police or fire

department networks. 2015 Open Internet Order, 30 FCC

Rcd. at 5786 ¶ 399; see 1994 Order, 9 FCC Rcd. at 1414 ¶ 4.

Aligning mobile broadband with mobile voice based on their

affording similarly ubiquitous access, moreover, was in

keeping with Congress’s objective in establishing a defined

category of “commercial mobile services” subject to common

carrier treatment: to “creat[e] regulatory symmetry among

similar mobile services.” 1994 Order, 9 FCC Rcd. at 1413

¶ 2; see 2015 Open Internet Order, 30 FCC Rcd. at 5786

¶ 399; H.R. Rep. No. 103-111 at 259 (May 25, 1993) (noting

that amendments to section 332 were intended to ensure “that

services that provide equivalent mobile services are regulated

in the same manner”).

In the interest of achieving that regulatory symmetry and

bringing mobile broadband into alignment with mobile voice

as a commercial mobile service, the Commission updated its

definition of the “public switched network” to include both

users reachable by ten-digit phone numbers and users

reachable by IP addresses. See 2015 Open Internet Order, 30

FCC Rcd. at 5779 ¶ 391. The newly expanded definition of

“public switched network” thus covers “the network that

includes any common carrier switched network . . . that use[s]

the North American Numbering Plan, or public IP addresses,

in connection with the provision of switched services.” Id.

(emphasis added) (alteration in original); 47 C.F.R. § 20.3;

see Bell Atlantic Telephone Cos. v. FCC, 206 F.3d 1, 4 (D.C.

Cir. 2000) (“[T]he internet is a ‘distributed packet-switched

61

network.’”). And because the public switched network now

includes IP addresses, the Commission found that mobile

broadband qualifies as an “interconnected service,” i.e.,

“service that is interconnected with the public switched

network” as redefined. 47 U.S.C. § 332(d)(2); see 2015 Open

Internet Order, 30 FCC Rcd. at 5779–80 ¶ 391, 5786 ¶ 399.

According to the Commission, then, mobile broadband

meets all parts of the statutory definition of a “commercial

mobile service” subject to common carrier regulation: it is a

“mobile service . . . that is provided for profit and makes

interconnected service available . . . to the public or . . . a

substantial portion of the public.” 47 U.S.C. § 332(d)(1). We

find the Commission’s reclassification of mobile broadband

as a commercial mobile service under that definition to be

reasonable and supported by record evidence demonstrating

the “rapidly growing and virtually universal use of mobile

broadband service” today. 2015 Open Internet Order, 30 FCC

Rcd. at 5786 ¶ 399. In support of its reclassification decision,

the Commission relied on, and recounted in detail, evidence

of the explosive growth of mobile broadband service and its

near universal use by the public. See id. at 5635–38 ¶¶ 88–92,

5779 ¶ 391, 5785–86 ¶¶ 398–99. In the face of that evidence,

we see no basis for concluding that the Commission was

required in 2015 to continue classifying mobile broadband as

a “private” mobile service.

B.

Mobile petitioners offer two principal arguments in

support of their position that mobile broadband nonetheless

must be treated as a private mobile service rather than a

commercial mobile service. First, they argue that “public

switched network” is a term of art confined to the public

switched telephone network. Second, they contend that, even

if the Commission can expand the definition of public

62

switched network to encompass users with IP addresses in

addition to users with telephone numbers, mobile broadband

still fails to qualify as an “interconnected service.”

We reject both arguments. In mobile petitioners’ view,

mobile broadband (or any non-telephone mobile service)—no

matter how universal, widespread, and essential a medium of

communication for the public it may become—must always

be considered a “private mobile service” and can never be

considered a “commercial mobile service.” Nothing in the

statute compels attributing to Congress such a wooden,

counterintuitive understanding of those categories. Rather,

Congress expressly delegated to the Commission the authority

to define—and hence necessarily to update and revise—those

categories’ key definitional components, “public switched

network” and “interconnected service.” 47 U.S.C. § 332(d);

see 2015 Open Internet Order, 30 FCC Rcd. at 5783–84

¶ 396.

“In this sort of case, there is no need to rely on the

presumptive delegation to agencies of authority to define

ambiguous or imprecise terms we apply under the Chevron

doctrine, for the delegation of interpretative authority is

express.” Women Involved in Farm Economics v. U.S.

Department of Agriculture, 876 F.2d 994, 1000–01 (D.C. Cir.

1989) (citation omitted); see Rush University Medical Center

v. Burwell, 763 F.3d 754, 760 (7th Cir. 2014); 2015 Open

Internet Order, 30 FCC Rcd. at 5783 ¶ 396 & n.1145. We

find the Commission’s exercise of that express definitional

authority to be a reasoned and reasonable interpretation of the

statute. We therefore sustain the Commission’s

reclassification of mobile broadband as a commercial mobile

service against mobile petitioners’ challenges. In light of that

disposition, we need not address the Commission’s alternative

finding that mobile broadband, even if not a commercial

63

mobile service, is still subject to common carrier treatment as

the “functional equivalent” of a commercial mobile service.

See 47 U.S.C. § 332(d)(3); 2015 Open Internet Order, 30 FCC

Rcd. at 5788–90 ¶¶ 404–08.

1.

We first consider mobile petitioners’ challenge to the

Commission’s updated definition of “public switched

network.” That term, as set out above, forms an integral

component of the statutory definition of “commercial mobile

service.” Any such service must qualify as an

“interconnected service,” defined in the statute as “service

that is interconnected with the public switched network.” 47

U.S.C. § 332(d)(1)–(2). And Congress expressly gave the

Commission the authority to define the public switched

network, id. § 332(d)(2), which the Commission exercised by

revising its definition in the Order. As we have explained, the

Commission, relying on the growing universality of mobile

broadband as a medium of communication for the public,

expanded the definition of the public switched network so that

it now uses IP addresses in addition to telephone numbers in

connection with the provision of switched services.

Mobile petitioners argue that Congress intended “public

switched network” to mean—forever—“public switched

telephone network,” and that the Commission thus lacks

authority to expand the definition of the network to include

endpoints other than telephone numbers. We are

unpersuaded. Mobile petitioners’ interpretation necessarily

contemplates adding a critical word (“telephone”) that

Congress left out of the statute, an unpromising avenue for an

argument about the meaning of the words Congress used.

See, e.g., Adirondack Medical Center v. Sebelius, 740 F.3d

692, 699–700 (D.C. Cir. 2014); Public Citizen, Inc. v. Rubber

Manufacturers Ass’n, 533 F.3d 810, 816 (D.C. Cir. 2008). If

64

Congress meant for the phrase “public switched network” to

carry the more restrictive meaning attributed to it by mobile

petitioners, Congress could (and presumably would) have

used the more limited—and more precise—term “public

switched telephone network.” Indeed, Congress used that

precise formulation in another, later-enacted statute. See 18

U.S.C. § 1039(h)(4). Here, though, Congress elected to use

the more general term “public switched network,” which by

its plain language can reach beyond telephone networks

alone. See 2015 Open Internet Order, 30 FCC Rcd. at 5783

¶ 396.

Not only did Congress decline to invoke the term “public

switched telephone network,” but it also gave the

Commission express authority to define the broader term it

used instead. See 47 U.S.C. § 332(d)(2). Mobile petitioners

conceive of “public switched network” as a term of art

referring only to a network using telephone numbers. But if

that were so, it is far from clear why Congress would have

invited the Commission to define the term, rather than simply

setting out its ostensibly fixed meaning in the statute. We

instead agree with the Commission that, in granting the

Commission general definitional authority, Congress

“expected the notion [of the public switched network] to

evolve and therefore charged the Commission with the

continuing obligation to define it.” 2015 Open Internet Order,

30 FCC Rcd. at 5783 ¶ 396.

It is of no moment that Congress, in another statute, used

the term “public switched network” in a context indicating an

intention to refer to the telephone network. See 47 U.S.C.

§ 1422(b)(1)(B)(ii) (referring to “the public Internet or the

public switched network”). That statute, unlike section

332(d)(2), contains no grant of authority to the Commission to

define the term. And it was enacted during the time when the

65

Commission’s prior, longstanding regulatory definition of

“public switched network” was in effect. Because the

Commission at the time had defined the “public switched

network” by reference to the telephone network, it is

unsurprising that Congress would have assumed the term to

have that meaning. But that assumption by no means

indicates that Congress meant to divest the Commission of the

definitional authority it had expressly granted the

Commission in section 332(d)(2). We do not understand

Congress’s express grant of definitional authority to have

come burdened with an unstated intention to compel the

Commission to forever retain a definition confined to one

specific type of “public switched network,” i.e., the telephone

network.

We therefore reject mobile petitioners’ counter-textual

argument that the statutory phrase “public switched network”

must be understood as if Congress had used the phrase

“public switched telephone network.” Instead, the more

general phrase “public switched network,” by its terms,

reaches any network that is both “public” and “switched.”

Mobile petitioners do not dispute that a network using both IP

addresses and telephone numbers is “public” and “switched.”

As the Commission explained, its expansion of the network to

include the use of IP addresses involves a “switched” network

in that it “reflects the emergence and growth of packet

switched Internet Protocol-based networks,” and it also

involves a “public” network in that “today’s broadband

Internet access networks use their own unique addressing

identifier, IP addresses, to give users a universally recognized

format for sending and receiving messages across the country

and worldwide.” 2015 Open Internet Order, 30 FCC Rcd. at

5779–80 ¶ 391 (emphasis added). The Commission thus

permissibly considered a network using telephone numbers

and IP addresses to be a “public switched network.”

66

2.

Mobile petitioners next challenge the Commission’s

understanding of “interconnected service.” That term, too, is

an integral part of the definition of commercial mobile

service. A commercial mobile service must “make[]

interconnected service available . . . to the public or to . . . a

substantial portion of the public.” 47 U.S.C. § 332(d)(1).

And “interconnected service” is “service that is

interconnected with the public switched network.” Id.

§ 332(d)(2). As with the phrase “public switched network,”

Congress gave the Commission express authority to define the

term “interconnected service.” Id.

The Commission has defined “interconnected service” as

a service “that gives subscribers the capability to

communicate to or receive communication from all other

users on the public switched network.” 47 C.F.R. § 20.3

(prior version effective through June 11, 2015); see 2015

Open Internet Order, 30 FCC Rcd. at 5779 ¶ 390. (We note

that, in the 2015 Order, the Commission excised the word

“all” from that definition. But as we explain below, the

Commission considered that adjustment a purely conforming

one with no substantive effect; we use the prior language to

confirm that mobile broadband would qualify as

interconnected service regardless of the Commission’s

adjustment.)

The question under the Commission’s definition of

“interconnected service,” then, is whether mobile broadband

“gives subscribers the capability to communicate to or receive

communication from all other users on the public switched

network” as redefined to encompass devices using both IP

addresses and telephone numbers. 47 C.F.R. § 20.3 (prior

version effective through June 11, 2015). The Commission

reasonably found that mobile broadband gives users that

67

“capability.” See 2015 Open Internet Order, 30 FCC Rcd. at

5779–80 ¶¶ 390–91, 5785–86 ¶ 398, 5787 ¶ 401.

As an initial matter, there is no dispute about the

“capability” of mobile broadband subscribers to

“communicate to” other mobile broadband users. As the

Commission explained in the Order—and as is undisputed—

“mobile broadband . . . gives its users the capability to send

and receive communications from all other users of the

Internet.” Id. at 5785 ¶ 398. The remaining issue for the

Commission therefore concerned communications from

mobile broadband users to telephone users: whether mobile

broadband “gives subscribers the capability to communicate

to” users via telephone numbers. 47 C.F.R. § 20.3. The

Commission concluded that it does.

Specifically, the Commission determined that mobile

broadband gives a subscriber the capability to communicate

with a telephone user through the use of Voice over Internet

Protocol (VoIP) applications. See 2015 Open Internet Order,

30 FCC Rcd. at 5786–87 ¶¶ 400–01. (Skype, FaceTime, and

Google Voice and Hangouts are popular examples of VoIP

applications.) VoIP technology enables a mobile broadband

user to send a voice call from her IP address to the recipient’s

telephone number. As a result, a mobile broadband user with

a VoIP application on her tablet can call her friend’s home

phone number even if the caller’s tablet lacks cellular voice

access (and thus has no assigned telephone number). When

she dials her friend’s telephone number, the VoIP service

sends the call from her tablet’s IP address over the mobile

broadband network to connect to the telephone network and,

ultimately, to her friend’s home phone. As such, mobile

broadband, through VoIP, “gives subscribers the capability to

communicate to” telephone users. 47 C.F.R. § 20.3.

68

In 2007, when the Commission first considered the

proper classification of then-nascent mobile broadband, the

Commission had a different understanding about the

relationship between mobile broadband and VoIP. At that

time, the Commission considered VoIP applications to be a

separate, non-integrated service, such that VoIP’s ability to

connect internet and telephone users was not thought to

render mobile broadband an interconnected service. See 2007

Wireless Order, 22 FCC Rcd. at 5917–18 ¶ 45. But when the

Commission revisited the issue nearly a decade later in the

Order we now review, the Commission found that its

“previous determination about the relationship between

mobile broadband Internet access and VoIP applications in

the context of section 332 no longer accurately reflects the

current technological landscape.” 2015 Open Internet Order,

30 FCC Rcd. at 5787 ¶ 401. In particular, it concluded that

VoIP applications now function as an integrated aspect of

mobile broadband, rather than as a functionally distinct,

separate service. The Commission therefore found that

mobile broadband “today, through the use of VoIP, . . . gives

subscribers the capability to communicate with all NANP

endpoints.” Id.

In reaching that conclusion, the Commission emphasized

that “changes in the marketplace . . . highlight the

convergence between mobile voice and data networks that has

occurred since the Commission first addressed the

classification of mobile broadband Internet access in 2007.”

Id. The record before the Commission substantially supports

that understanding, as well as the associated finding that the

relationship between VoIP applications and mobile broadband

today significantly differs from that of 2007. For instance, in

2007, Apple’s iPhone—the only device at the time even

“resembling a modern smart phone”—had just been released

and was available through only one mobile carrier. Letter

69

from Harold Feld, et al., Public Knowledge to Marlene H.

Dortch, FCC, at 10, GN Dkt. Nos. 14-28 & 10-127 (Dec. 19,

2014) (“Public Knowledge 12/19 Letter”). Commenters drew

the Commission’s attention to its recognition in 2007 that

“mobile broadband available with a standard mobile phone of

the time ‘enable[d] users to access a limited selection of

websites’ and primarily offered extremely limited

functionality such as email.” Id. (citing 2007 Wireless Order,

22 FCC Rcd. at 5906 ¶ 11 & n.43). Because of those

limitations, “[i]ndependent ‘app stores’ that allow for

seamless downloading and integration of standalone

applications [e.g., VoIP applications] into the customer’s

handset did not exist” in 2007. Id.

The Commission also noted that, today, mobile

broadband is dramatically faster: the average network

connection speed “exploded” in just three years, going from

an average connection speed of 709 kilobytes per second

(kbps) in 2010 to an average speed of 2,058 kbps for all

devices and 9,942 kbps for smartphones by 2013. 2015 Open

Internet Order, 30 FCC Rcd. at 5636 ¶ 89 & n.170. Partly as

a result, access to the internet and applications on one’s

mobile phone is no longer confined to a small number of

functions. Rather, “there has been substantial growth” even

since 2010—far more so since 2007—“in the digital app

economy . . . and VoIP” in particular. Id. at 5626 ¶ 76.

In addition, the Commission cited a letter which

explained that, because VoIP applications (such as FaceTime

on Apple devices and Google Hangouts on Android devices)

now come “bundled with the primary operating systems

available in every smartphone,” they are no longer “rare and

clearly functionally distinct” as they were in 2007. Letter

from Michael Calabrese, Open Technology Institute, et al., to

Marlene H. Dortch, FCC, at 6, GN Dkt. Nos. 14-28 & 10-127

70

(Dec. 11, 2014) (“OTI 12/11 Letter”); see 2015 Open Internet

Order, 30 FCC Rcd. at 5787 ¶ 401 n.1168. Any distinction

between calls made with a device’s “native” dialing capacity

and those made through VoIP thus has become “increasingly

inapt.” OTI 12/11 Letter at 5; see Public Knowledge 12/19

Letter at 10.

The Commission accordingly found that “[t]oday, mobile

VoIP . . . is among the increasing number of ways in which

users communicate indiscriminately between NANP and IP

endpoints on the public switched network.” 2015 Open

Internet Order, 30 FCC Rcd. at 5787 ¶ 401; see Resp’ts’ Br.

99 (relying on that finding). In light of those developments,

the Commission reasonably determined that mobile

broadband today is interconnected with the newly defined

public switched network. It “gives subscribers the capability

to communicate to . . . other users on the public switched

network,” whether the recipient has an IP address, telephone

number, or both. 47 C.F.R. § 20.3; see 2015 Open Internet

Order, 30 FCC Rcd. at 5779–80 ¶ 391, 5785–87 ¶¶ 398–401.

In contending otherwise, mobile petitioners argue that

mobile broadband itself is not “interconnected with the public

switched network,” 47 U.S.C. § 332(d)(2), because mobile

broadband does not allow subscribers to interconnect with

telephone users unless subscribers take the step of using a

VoIP application. Nothing in the statute, however, compels

the Commission to draw a talismanic (and elusive) distinction

between (i) mobile broadband alone enabling a connection,

and (ii) mobile broadband enabling a connection through use

of an adjunct application such as VoIP. To the contrary, the

statute grants the Commission express authority to define

“interconnected service.” 47 U.S.C. § 332(d)(2). And the

Commission permissibly exercised that authority to determine

that—in light of the increased availability, use, and

71

technological and functional integration of VoIP

applications—mobile broadband should now be considered

interconnected with the telephone network. Indeed, even for

communications from one mobile broadband user to another,

mobile broadband generally works in conjunction with a

native or third-party application of some sort (e.g., an email

application such as Gmail or a messaging application such as

WhatsApp) to facilitate transmission of users’ messages. The

conjunction of mobile broadband and VoIP to enable IP-to-

telephone communications is no different.

That is especially apparent in light of the Commission’s

regulatory definition of “interconnected service.” The

regulation calls for assessing whether mobile broadband

“gives subscribers the capability to communicate to”

telephone users. 47 C.F.R. § 20.3 (emphasis added). Mobile

petitioners do not challenge the Commission’s understanding

that a “capability to communicate” suffices to establish an

interconnected service, and we see no ground for rejecting the

Commission’s conclusion that mobile broadband gives

subscribers the “capability to communicate to” telephone

users through VoIP. And although the regulation also

references “receiv[ing] communications from” others in the

network, id., mobile petitioners also do not challenge the

Commission’s understanding that the capability either to

“communicate to or receive communication from” is enough,

id. (emphasis added). Consequently, the capability of mobile

broadband users “to communicate to” telephone users via

VoIP suffices to render the network—and, most importantly,

its users—“interconnected.”

Mobile petitioners note what they perceive to be a

separate problem associated with communications running in

the reverse direction (i.e., the capability of mobile broadband

users to “receive communications from” telephone users).

72

That ostensible problem pertains, not to mobile broadband

service, but instead to mobile voice service. In particular,

mobile petitioners argue that, if the public switched network

can be defined to use both IP addresses and telephone

numbers, mobile voice service would no longer qualify as an

“interconnected service” because telephone users cannot

establish a connection to IP users. The result, mobile

petitioners submit, is that the one network everyone agrees

was intended to qualify as a commercial mobile service—

mobile voice—would necessarily become a private mobile

service. We are unconvinced.

As a starting point, the Commission’s Order takes up the

proper classification of mobile broadband, not mobile voice.

The Commission thus did not conduct a formal assessment of

whether mobile voice would qualify as an interconnected

service under the revised definition of public switched

network. But were the Commission to address that issue in a

future proceeding, it presumably would note that, regardless

of whether mobile voice users can “communicate to” mobile

broadband users from their telephones, they can “receive

communication from” mobile broadband users through VoIP

for the reasons already explained. 47 C.F.R. § 20.3. That

capability would suffice to render mobile voice an

“interconnected service” under the Commission’s regulatory

definition of that term. Id.

Moreover, insofar as the Commission may be asked in

the future to formally address whether mobile voice qualifies

as an interconnected service, the Commission could assess at

that time whether there exists the “capability” of

communications in the reverse direction, i.e., the capability of

mobile voice users to “communicate to” IP users from their

telephones. Id. We note that the Commission had

information before it in this proceeding indicating that a

73

mobile broadband (or other computer) user can employ a

service enabling her to receive telephone calls to her IP

address. See Public Knowledge 12/19 Letter at 11 n.50

(describing a television commercial demonstrating Apple’s

Continuity service, which enables an iPhone 6 user with

mobile voice service to call an iPad user with mobile

broadband service); Use Continuity to connect your iPhone,

iPad, iPod touch, and Mac, https://support.apple.com/en-us

/HT204681 (last visited June 14, 2016) (“With Continuity,

you can make and receive cellular phone calls from your iPad,

iPod touch, or Mac when your iPhone is on the same Wi-Fi

network.”); see also Receive Google Voice calls with

Hangouts, https://support.google.com/hangouts/answer

/6079064 (last visited June 14, 2016) (describing how the

“Google Voice” and “Hangouts” services allow mobile

broadband users to receive calls from telephone users); What

is a Skype Number?, https://support.skype.com/en/faq/FA331

/what-is-a-skype-number (last visited June 14, 2016)

(describing how a “Skype Number” enables mobile

broadband users to receive calls from telephone users).

For those reasons, we reject mobile petitioners’ argument

that the Commission’s classification of mobile broadband as

an “interconnected service” is impermissible because of its

supposed implications for the classification of mobile voice.

Rather, the Commission permissibly found that mobile

broadband now qualifies as interconnected because it gives

subscribers the ability to communicate to all users of the

newly defined public switched network. In the words of the

Commission: “mobile broadband Internet access service

today, through the use of VoIP, messaging, and similar

applications, effectively gives subscribers the capability to

communicate with all NANP endpoints as well as with all

users of the Internet.” 2015 Open Internet Order, 30 FCC

Rcd. at 5787 ¶ 401.

74

Finally, the finding that mobile broadband today “gives

subscribers the capability to communicate with all NANP

endpoints,” id. (emphasis added), confirms the immateriality

of the Commission’s removal of the word “all” from its

regulatory definition of “interconnected service.” As

mentioned earlier, that regulation, until the Order, defined

interconnected service as a service “that gives subscribers the

capability to communicate to or receive communication from

all other users on the public switched network.” 47 C.F.R.

§ 20.3 (prior version effective through June 11, 2015)

(emphasis added). In the updated definition, the Commission

left that language unchanged except that it removed the word

“all.” See 47 C.F.R. § 20.3 (current version effective June 12,

2015). Mobile petitioners attach great significance to the

removal of “all,” assuming that the change enabled the

Commission to find mobile broadband to be an

“interconnected service” even though, according to mobile

petitioners, broadband users have no capability to

communicate with telephone users. By excising the word

“all,” mobile petitioners assert, the Commission could find

that mobile broadband is an interconnected service based on

the ability of users to communicate only with some in the

network (fellow broadband users) notwithstanding the lack of

any capability to communicate with others in the network

(telephone users). Absent the latter ability, mobile petitioners

argue, mobile broadband cannot actually be considered

“interconnected” with the telephone network.

Mobile petitioners’ argument rests on a mistaken

understanding of the Commission’s actions. The Commission

did not rest its finding that mobile broadband is an

“interconnected service” solely on an assumption that it

would be enough for broadband subscribers to be able to

communicate with some in the network (only fellow IP users),

even if there were no capability at all to communicate with

75

others (telephone users). To the contrary, the Commission, as

explained, found that mobile broadband—through VoIP—

“gives subscribers the ability to communicate with all NANP

endpoints as well as with all users of the Internet.” 2015

Open Internet Order, 30 FCC Rcd. at 5787 ¶ 401 (emphasis

added). Once we accept that finding, as we have, we need not

consider petitioners’ argument challenging what the

Commission characterizes as merely a “conforming” change

with no independent substantive effect. See id. at 5787–88

¶ 402 & n.1175. (Specifically, the Commission notes that the

removal of “all” was meant to reiterate a carve-out that has

always existed in the regulation: another part of the definition

of “interconnected service” establishes that a service qualifies

as “interconnected” even if it “restricts access in certain

limited ways,” such as a service that blocks access to 900

numbers. Id. (quoting 47 C.F.R. § 20.3); id. at 5787 ¶ 402

n.1172.)

In the end, then, the removal of “all” is of no

consequence to the Commission’s rationale for finding that

mobile broadband constitutes an “interconnected service.”

Mobile broadband, the Commission reasonably concluded,

gives users the capability to communicate to all other users in

the newly defined public switched network, whether users

with an IP address, users with a telephone number, or users

with both. See id. at 5787 ¶ 401. Because mobile broadband

thus can be considered an interconnected service, the

Commission acted permissibly in reclassifying mobile

broadband as a commercial mobile service subject to common

carrier regulation, rather than a private mobile service

immune from such regulation.

3.

Mobile petitioners also argue that the Commission has

failed to “point to any change in the technology or

76

functionality of mobile broadband” sufficient to justify

reclassifying mobile broadband as a commercial mobile

service. US Telecom Pet’rs’ Br. 68. This argument fares no

better in the mobile context than it did in the Title II

reclassification context. Even if the Commission had not

demonstrated changed factual circumstances—which, as

described above, we think it has—mobile petitioners’

argument would fail because the Commission need only

provide a “reasoned explanation” for departing from its prior

findings. See Fox Television, 556 U.S. at 515–16 (“[I]t is not

that further justification is demanded by the mere fact of

policy change[,] but that a reasoned explanation is needed for

disregarding facts and circumstances that underlay . . . the

prior policy.”). It has done so here.

4.

Finally, we agree with the Commission that the need to

avoid a statutory contradiction in the treatment of mobile

broadband provides further support for its reclassification as a

commercial mobile service. Each of the two statutory

schemes covering mobile broadband requires classifying a

service in a particular way before it can be subject to common

carrier treatment. Under Title II, broadband must be

classified as a “telecommunications service.” Under Title III,

mobile broadband must be classified as a “commercial mobile

service.” Because the two classifications do not automatically

move in tandem, the Commission must make two distinct

classification decisions. To avoid the contradictory result of

classifying mobile broadband providers as common carriers

under Title II while rendering them immune from common

carrier treatment under Title III, the Commission, upon

reclassifying broadband generally—including mobile—as a

telecommunications service, reclassified mobile broadband as

a commercial mobile service. See 2015 Open Internet Order

at 5788 ¶ 403.

77

Avoiding that statutory contradiction not only assures

consistent regulatory treatment of mobile broadband across

Titles II and III, but it also assures consistent regulatory

treatment of mobile broadband and fixed broadband, in

furtherance of the Commission’s objective that “[b]roadband

users should be able to expect that they will be entitled to the

same Internet openness protections no matter what technology

they use to access the Internet.” 2015 Open Internet Order,

30 FCC Rcd. at 5638 ¶ 92. When consumers use a mobile

device (such as a tablet or smartphone) to access the internet,

they may establish a connection either through mobile

broadband or through a Wi-Fi connection at home, in the

office, or at an airport or coffee shop. Such Wi-Fi

connections originate from a landline broadband connection,

which is now a telecommunications service regulated as a

common carrier under Title II. If a consumer loses her Wi-Fi

connection for some reason while accessing the internet—

including, for instance, if she walks out the front door of her

house, and thus out of Wi-Fi range—her device could switch

automatically from a Wi-Fi connection to a mobile broadband

connection. If mobile broadband were classified as a private

mobile service, her ongoing session would no longer be

subject to common carrier treatment. In that sense, her

mobile device could be subject to entirely different regulatory

rules depending on how it happens to be connected to the

internet at any particular moment—which could change from

one minute to the next, potentially even without her

awareness.

The Commission’s decision to reclassify mobile

broadband as a commercial mobile service prevents that

counterintuitive outcome by assuring consistent regulatory

treatment of fixed and mobile broadband. By contrast, if

mobile broadband—despite the public’s “rapidly growing and

virtually universal use” of the service today, id. at 5786

78

¶ 399—must still be classified as a “private” mobile service,

broadband users may no longer experience “the same Internet

openness protections no matter what technology they use to

access the Internet.” Id. at 5638 ¶ 92.

C.

Mobile petitioners also challenge the sufficiency of the

Commission’s notice, particularly with respect to its

redefinition of the public switched network as well as its

removal of the word “all” from the definition of

interconnected service. As noted above, the APA requires

that an NPRM “include . . . either the terms or substance of

the proposed rule or a description of the subjects and issues

involved.” 5 U.S.C. § 553(b). But the APA also requires us

to take “due account” of “the rule of prejudicial error.” Id.

§ 706.

A deficiency of notice is harmless if the challengers had

actual notice of the final rule, Small Refiner Lead Phase-

Down Task Force v. EPA, 705 F.2d 506, 549 (D.C. Cir.

1983), or if they cannot show prejudice in the form of

arguments they would have presented to the agency if given a

chance, Owner-Operator Independent Drivers Ass’n v.

Federal Motor Carrier Safety Administration, 494 F.3d 188,

202 (D.C. Cir. 2007). Both circumstances are present here,

and each independently supports our conclusion that any lack

of notice was ultimately harmless. As such, we need not

decide whether the Commission gave adequate notice of its

redefinition of the public switched network in the NPRM.

As mobile petitioners acknowledge, Vonage raised the

idea of redefining the public switched network in its

comments, pointing out the Commission’s “authority to

interpret the key terms in th[e] definition [of commercial

mobile service], including ‘interconnected’ and ‘public

79

switched network.’” Vonage Holdings Corp. Comments at

43, GN Dkt. Nos. 14-28 & 10-127 (July 18, 2014). Mobile

petitioner CTIA responded to that point in its reply comments,

disputing Vonage’s underlying assumption that mobile

broadband users can connect with all telephone users, see

CTIA Reply Comments at 45, GN Dkt. Nos. 14-28 & 10-127

(Sept. 15, 2014), thereby recognizing that the definition of

public switched network was in play.

In addition, over the course of several months before

finalization and release of the Order, mobile petitioners (and

others) submitted multiple letters to the Commission

concerning the potential for redefining the public switched

network. See, e.g., Letter from Henry G. Hultquist, AT&T, to

Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127

(Feb. 13, 2015) (“AT&T 2/13 Letter”); Letter from Scott

Bergmann, CTIA, to Marlene H. Dortch, FCC, at 13-18, GN

Dkt. Nos. 14-28 & 10-127 (Feb. 10, 2015); Letter from Scott

Bergmann, CTIA, to Marlene H. Dortch, FCC, GN Dkt. Nos.

14-28 & 10-127 (Jan. 14, 2015) (“CTIA 1/14 Letter”); Letter

from Gary L. Phillips, AT&T, to Marlene H. Dortch, FCC,

GN Dkt. Nos. 14-28 & 10-127 (Feb. 2, 2015); Letter from

Scott Bergmann, CTIA, to Marlene H. Dortch, FCC, GN Dkt.

Nos. 14-28 & 10-127 (Dec. 22, 2014) (“CTIA 12/22 Letter”);

Letter from Scott Bergmann, CTIA, to Marlene H. Dortch,

FCC, GN Dkt. Nos. 14-28 & 10-127 (Oct. 17, 2014) (“CTIA

10/17 Letter”).

We have previously charged petitioners challenging an

agency rule with actual notice based on letters like those

submitted by mobile petitioners. See Sierra Club v. Costle,

657 F.2d 298, 355 (D.C. Cir. 1981). But we have even more

evidence of actual notice here. Mobile petitioners note in

their letters that, in meetings with the Commission, they

discussed the substance of their arguments here, including

80

issues surrounding the redefinition of public switched

network. See AT&T 2/13 Letter at 1 (noting a meeting with

representatives from Commissioners O’Rielly’s and Pai’s

offices on February 11, 2015); CTIA 1/14 Letter at 1 (noting a

meeting with representatives from Commissioner Pai’s office

on January 12, 2015); CTIA 12/22 Letter at 1 (noting a

meeting with representatives from the Commission’s General

Counsel’s office and representatives from the Wireless

Telecommunications Bureau on December 18, 2014); CTIA

10/17 Letter at 1 (noting a meeting with the Commission’s

General Counsel and a representative from the Wireline

Competition Bureau on October 15, 2014). Thus, even if the

redefinition of public switched network was a “novel

proposal” by Vonage during the comment period, it is clear

from mobile petitioners’ own letters that they had actual

notice that the Commission was considering adoption of that

proposal. See National Mining Ass’n v. Mine Safety & Health

Administration, 116 F.3d 520, 531–32 (D.C. Cir. 1997).

In addition, in those letters, letters from others supporting

mobile petitioners’ views, and responsive letters from groups

like New America’s Open Technology Institute and Public

Knowledge, mobile petitioners engaged in a detailed,

substantive back-and-forth about the precise issues they

challenge here. Reclassification of mobile broadband and

redefinition of the public switched network were the focal

points of that discussion, in which petitioners exchanged

arguments about technology and policy with the groups

supporting a broader definition of the public switched

network. See Letters from CTIA and AT&T, supra; Letter

from Michael Calabrese, Open Technology Institute, to

Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127 (Jan.

27, 2015); Letter from Harold Feld, Public Knowledge, to

Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127 (Jan.

15, 2015); Letter from William H. Johnson, Verizon, to

81

Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127

(Dec. 24, 2014); Public Knowledge 12/19 Letter; Letter from

Michael E. Glover, Verizon, to Marlene H. Dortch, FCC, GN

Dkt. Nos. 14-28 & 10-127 (Oct. 29, 2014); OTI 12/11 Letter;

Letter from William H. Johnson, Verizon, to Marlene H.

Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127 (Oct. 17, 2014).

In those exchanges, mobile petitioners raised and fiercely

debated all of the same arguments they now raise before us,

thus demonstrating not only the presence of actual notice, but

also the absence of new arguments they might present to the

Commission on remand. Indeed, when asked at oral

argument, mobile petitioners could not list any new argument

on the issue of the redefinition of public switched network.

See Oral Arg. Tr. 74–79, 84–87.

Mobile petitioners also allege that the Commission gave

inadequate notice of the removal of “all” from the definition

of interconnected service. Any such failure, however, was

also harmless. As noted above, not only does the

Commission claim that the removal of “all” was

inconsequential to the regulation, but that adjustment also has

no bearing on our decision to uphold the Commission’s

reclassification decision. We would uphold the

Commission’s decision regardless of whether the Commission

validly removed “all” from the definition of “interconnected

service.” Mobile petitioners thus cannot show prejudice from

any lack of notice. See Steel Manufacturers Ass’n v. EPA, 27

F.3d 642, 649 (D.C. Cir. 1994) (explaining that inability to

comment on one rationale for rule was harmless when agency

had “adequate and independent grounds” for rule).

Mobile petitioners, for those reasons, fail to show the

prejudice required by the APA to succeed on their arguments

of insufficient notice. We therefore reject their challenges.

82

V.

Having upheld the Commission’s reclassification of

broadband services, both fixed and mobile, we consider next

Full Service Network’s challenges to the Commission’s

decision to forbear from applying portions of the

Communications Act to those services. Section 10 of the

Communications Act provides that the Commission “shall

forbear from applying any regulation or any provision” of the

Communications Act to a telecommunications service or

carrier if three criteria are satisfied: (1) “enforcement of such

regulation or provision is not necessary to ensure that” the

carrier’s practices “are just and reasonable and are not

unjustly or unreasonably discriminatory,” 47 U.S.C.

§ 160(a)(1); (2) “enforcement of such regulation or provision

is not necessary for the protection of consumers,” id.

§ 160(a)(2); and (3) “forbearance from applying such

provision or regulation is consistent with the public interest,”

id. § 160(a)(3). Under the third criterion, “the Commission

shall consider whether forbearance . . . will promote

competitive market conditions, including the extent to which

such forbearance will enhance competition among providers

of telecommunications services.” Id. § 160(b). Thus, section

10 imposes a mandatory obligation upon the Commission to

forbear when it finds these conditions are met.

Section 10(c) gives any carrier the right to “submit a

petition to the Commission requesting” forbearance. Id.

§ 160(c). In regulations issued pursuant to section 10(c), the

Commission requires “petitions for forbearance” to include a

“[d]escription of relief sought,” make a prima facie case that

the statutory criteria for forbearance are satisfied, identify any

related matters, and provide any necessary evidence. 47

C.F.R. § 1.54.

83

In the Order, the Commission decided to forbear from

numerous provisions of the Communications Act. 2015 Open

Internet Order, 30 FCC Rcd. at 5616 ¶ 51. Full Service

Network raises both procedural and substantive challenges to

the Commission’s forbearance decision. None succeeds.

A.

Full Service Network first argues that the Commission

should have followed its regulatory requirements governing

forbearance petitions even though it forbore of its own accord.

In the Order, the Commission rejected this contention, stating

that “[b]ecause the Commission is forbearing on its own

motion, it is not governed by its procedural rules insofar as

they apply, by their terms, to section 10(c) petitions for

forbearance.” Id. at 5806 ¶ 438.

“[W]e review an agency’s interpretation of its own

regulations with ‘substantial deference.’” In re Sealed Case,

237 F.3d 657, 667 (D.C. Cir. 2001) (quoting Thomas

Jefferson University v. Shalala, 512 U.S. 504, 512 (1994)).

The agency’s interpretation “will prevail unless it is ‘plainly

erroneous or inconsistent’ with the plain terms of the disputed

regulation.” Everett v. United States, 158 F.3d 1364, 1367

(D.C. Cir. 1998) (quoting Auer v. Robbins, 519 U.S. 452, 461

(1997)).

The Commission’s interpretation of its regulations easily

satisfies this standard. By their own terms, the regulations

apply to “petitions for forbearance,” and nowhere say

anything about what happens when, as here, the Commission

decides to forbear without receiving a petition. See 47 C.F.R.

§ 1.54. To the extent this silence renders the regulations

ambiguous in the circumstance before us, the Commission’s

interpretation is hardly “plainly erroneous.” Everett, 158 F.3d

at 1367 (internal quotation marks omitted).

84

Full Service Network also contends that the NPRM

violated the APA’s notice requirement because it nowhere

identified the rules from which the Commission later decided

to forbear. The NPRM, however, listed the provisions from

which the Commission likely would not forbear, which by

necessary implication indicated that the Commission would

consider forbearing from all others. The NPRM did so by

citing a 2010 notice of inquiry, in which the Commission had

contemplated that, if it were to classify the Internet

connectivity component of broadband Internet access

service, it would forbear from applying all but a

handful of core statutory provisions—sections 201,

202, 208, and 254—to the service. In addition, the

Commission identified sections 222 and 255 as

provisions that could be excluded from forbearance,

noting that they have attracted longstanding and

broad support in the broadband context.

NPRM, 29 FCC Rcd. at 5616 ¶ 154 (footnotes and internal

quotation marks omitted). The NPRM sought “further and

updated comment” on that course of action. Id. Thus, Full

Service Network “should have anticipated that” the

Commission would consider forbearing from all remaining

Title II provisions. Covad Communications Co., 450 F.3d at

548. Indeed, Full Service Network anticipated that the

Commission would do just that. In its comments, Full Service

Network argued that the Commission should not forbear from

the provisions at issue here, thus demonstrating that it had no

trouble “comment[ing] meaningfully,” Honeywell

International, Inc., 372 F.3d at 445. See Letter from Earl W.

Comstock, Counsel for Full Service Network and

TruConnect, to Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28

& 10-127 (Feb. 20, 2015); Letter from Earl W. Comstock,

Counsel for Full Service Network and TruConnect, to

85

Marlene H. Dortch, FCC, GN Dkt. Nos. 14-28 & 10-127, at 1

(Feb. 3, 2015).

B.

Full Service Network contends that the Commission

acted arbitrarily and capriciously in forbearing from the

mandatory network connection and facilities unbundling

requirements contained in sections 251 and 252. As relevant

here, section 251 requires telecommunications carriers “to

interconnect directly or indirectly” with other carriers and

prohibits them from “impos[ing] unreasonable or

discriminatory conditions or limitations on[] the resale

of . . . telecommunications services.” 47 U.S.C. § 251(a)(1),

(b)(1). “Incumbent local exchange carrier[s],” meaning

carriers who “provided telephone exchange service” in a

particular area as of the effective date of the

Telecommunications Act, must provide nondiscriminatory

access to their existing networks and unbundled access to

network elements in order to allow service-level competition

through resale. Id. § 251(c), (h)(1). Section 252 sets

standards for contracts that implement section 251

obligations.

Full Service Network first argues that section 10(a)(3)’s

public interest determination “must be made for each

regulation, provision and market . . . using the definition and

context of that provision in the [Communications] Act.” Full

Service Network Pet’rs’ Br. 14–15 (emphasis omitted).

Because section 251 “applies to ‘local exchange carriers,’”

Full Service Network contends, “the geographic market, as

the name implies and the definition in the [Communications]

Act confirms, is local and not national.” Id. at 15 (emphasis

omitted) (quoting 47 U.S.C. § 251).

86

Our decision in EarthLink, Inc. v. FCC, 462 F.3d 1,

forecloses this argument. There, EarthLink made a similar

argument—that the inclusion of the phrase “geographic

markets” in section 10 meant that the Commission could not

“forbear on a nationwide basis” from separate unbundling

requirements in section 271 “without considering more

localized regions individuall

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