Amicus Curiae Brief — New York State Telecommunications Association, Inc., et al., Petitioners v. Letitia James, Attorney General of New York
Supreme Court briefSep 13, 2024
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No. 24-161
In the
Supreme Court of the United States
NEW YORK STATE TELECOMMUNICATIONS
ASSOCIATION, INC., ET AL.,
Petitioners,
V.
LETITIA A. JAMES, IN HER OFFICIAL CAPACITY AS
ATTORNEY GENERAL OF NEW YORK,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
BRIEF FOR NCTA – THE INTERNET &
TELEVISION ASSOCIATION AS AMICUS
CURIAE IN SUPPORT OF PETITIONERS
RICK C. CHESSEN
RUSSELL P. HANSER
STEVEN MORRIS
PAMELA ARLUK
NCTA – THE INTERNET &
TELEVISION ASSOCIATION
25 Massachusetts Ave., NW
Suite 100
Washington, DC 20001
(202) 222-2445
MATTHEW A. BRILL
Counsel of Record
MATTHEW T. MURCHISON
CHARLES S. DAMERON
ALEXANDER G. SIEMERS
LATHAM & WATKINS LLP
555 Eleventh Street, NW
Suite 1000
Washington, DC 20004
(202) 637-2200
matthew.brill@lw.com
Counsel for Amicus Curiae
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ...................................... ii
INTEREST OF AMICUS CURIAE ............................1
INTRODUCTION AND SUMMARY OF
ARGUMENT .......................................................2
ARGUMENT ...............................................................5
I.
II.
THE
COMMUNICATIONS
ACT
PREEMPTS
NEW
YORK’S
AFFORDABLE BROADBAND ACT ..................5
A.
The Communications Act Bars
Common-Carrier Regulation Of
Broadband ...................................................5
B.
The Affordable Broadband Act
Conflicts With The Communications
Act..............................................................12
THE QUESTION PRESENTED IS
PROFOUNDLY IMPORTANT AND
TIMELY.............................................................18
A.
New York’s Rate Regulation Of
Broadband Sets A Dangerous
Precedent...................................................18
B.
Pending Litigation Over The FCC’s
Reclassification
Of
Broadband
Makes The Petition Particularly
Timely........................................................22
CONCLUSION ..........................................................24
ii
TABLE OF AUTHORITIES
Page(s)
CASES
ACA Connects v. Bonta,
24 F.4th 1233 (9th Cir. 2022) ..............................14
Arkansas Electric Cooperative Corp. v.
Arkansas Public Service Commission,
461 U.S. 375 (1983) ..............................................16
California v. ARC America Corp.,
490 U.S. 93 (1989) ................................................13
Comcast Corp. v. FCC,
600 F.3d 642 (D.C. Cir. 2010) ................................9
Computer & Communications Industry
Association v. FCC,
693 F.2d 198 (D.C. Cir. 1982) ..............................11
CSX Transportation, Inc. v. Easterwood,
507 U.S. 658 (1993) ..............................................12
George v. McDonough,
596 U.S. 740 (2022) ..............................................10
Kansas v. Garcia,
589 U.S. 191 (2020) ..............................................15
Louisiana Public Service Commission v.
FCC,
476 U.S. 355 (1986) ................................................5
MCI Telecommunications Corp. v.
American Telephone & Telegraph Co.,
512 U.S. 218 (1994) ..............................................12
iii
TABLE OF AUTHORITIES—Continued
Page(s)
In re MCP No. 185,
2024 WL 3650468 (6th Cir.
Aug. 1, 2024) .................... 4, 7, 8, 10, 14, 18, 22, 23
Mozilla Corp. v. FCC,
940 F.3d 1 (D.C. Cir. 2019) ....................................7
National Cable & Telecommunications
Association v. Brand X Internet
Services,
545 U.S. 967 (2005) .................................. 5, 7, 8, 10
Northwest Central Pipeline Corp. v. State
Corp. Commission of Kansas,
489 U.S. 493 (1989) ..............................................16
Transcontinental Gas Pipe Line Corp. v.
State Oil & Gas Board of Mississippi,
474 U.S. 409 (1986) ..............................................16
United States v. American Telephone &
Telegraph Co.,
552 F. Supp. 131 (D.D.C. 1982), aff’d
sub nom. Maryland v. United States,
460 U.S. 1001 (1983) ........................................9, 10
United States v. Locke,
529 U.S. 89 (2000) ..........................................13, 15
Virginia Uranium, Inc. v. Warren,
587 U.S. 761 (2019) ........................................12, 15
iv
TABLE OF AUTHORITIES—Continued
Page(s)
ADMINISTRATIVE DECISIONS
Amendment of Section 64.702 of the
Commission’s Rules and Regulations
(Second Computer Inquiry),
77 F.C.C.2d 384 (1980) ..................................3, 8, 9
Amendment of Section 64.702 of the
Commission’s Rules and Regulations
(Second Computer Inquiry),
88 F.C.C.2d 512 (1981) ........................................11
Amendment of Sections 64.702 of the
Commission’s Rules and Regulations
(Third Computer Inquiry),
104 F.C.C.2d 958 (1986) ......................................11
Amendment of Sections 64.702 of the
Commission’s Rules and Regulations
(Third Computer Inquiry),
2 FCC Rcd. 3035 (1987) .......................................11
Federal-State Joint Board on Universal
Service,
12 FCC Rcd. 8776 (1997) .....................................10
Federal-State Joint Board on Universal
Service,
13 FCC Rcd. 11,501 (1998) ..................................10
v
TABLE OF AUTHORITIES—Continued
Page(s)
Protecting and Promoting the Open
Internet,
30 FCC Rcd. 5601 (2015) (2015 Order) ... 18, 19, 20
Restoring Internet Freedom,
33 FCC Rcd. 311 (2018) (2018 Order) ...........14, 20
Safeguarding and Securing the Open
Internet, WC Docket Nos. 23-230 & 17108, FCC 24-52 (rel. May 7, 2024),
https://docs.fcc.gov/public/
attachments/FCC-24-52A1.pdf
(2024 Order) ....................................... 17, 18, 19, 21
STATUTES
15 U.S.C. § 717(b)......................................................16
15 U.S.C. § 717(c) ......................................................16
47 U.S.C. § 151 ............................................................5
47 U.S.C. § 152 ..........................................................16
47 U.S.C. § 152(a)........................................................5
47 U.S.C. § 152(b)........................................................5
47 U.S.C. § 153(24)................................................6, 10
47 U.S.C. § 153(50)................................................6, 10
47 U.S.C. § 153(51).......................................... 3, 13, 14
47 U.S.C. § 153(53)................................................6, 10
vi
TABLE OF AUTHORITIES—Continued
Page(s)
47 U.S.C. § 160(a)......................................................17
47 U.S.C. § 160(e) ......................................................17
47 U.S.C. § 201(b)..................................................6, 17
47 U.S.C. § 205 ..........................................................17
47 U.S.C. § 205(a)........................................................6
47 U.S.C. § 214 ............................................................6
47 U.S.C. § 230(a)(4) .............................................7, 13
47 U.S.C. § 230(b)(2) .........................................3, 7, 13
47 U.S.C. § 230(f)(2) ..........................................3, 7, 14
Pub. L. No. 73-416, 48 Stat. 1064 (1934) ...................5
Pub. L. No. 104-104, 110 Stat. 56 (1996
Act) .........................................................................6
N.Y. Gen. Bus. Law § 399-zzzzz(2)-(4) .....................12
OTHER AUTHORITIES
Cox, Cox Connect2Compete,
https://www.cox.com/residential/
internet/connect2compete.html (last
visited Sept. 10, 2024) .........................................21
FCC, Affordable Connectivity Program,
https://www.fcc.gov/acp (last visited
Sept. 10, 2024) .....................................................22
vii
TABLE OF AUTHORITIES—Continued
Page(s)
NCTA, Industry Data: Closing the Digital
Divide,
https://www.ncta.com/industrydata/investment-ininfrastructure?field_industry_data_
categories_target_id[84]=84 (last
visited Sept. 10, 2024) .........................................21
USTelecom, 2023 Broadband Pricing
Index (Oct. 11, 2023),
https://www.ustelecom.org/wpcontent/uploads/2023/10/USTelecom2023-BPI-Report-final.pdf ...................................20
Xfinity, Internet Essentials,
https://www.xfinity.com/learn/
internet-service/internet-essentials
(last visited Sept. 10, 2024) .................................21
INTEREST OF AMICUS CURIAE1
NCTA – The Internet & Television Association
(NCTA) represents the cable industry, whose
advanced broadband networks deliver high-speed
internet access, cable television, and other innovative
services to consumers and businesses throughout the
United States, including millions of subscribers in
New York. NCTA’s members have invested billions of
dollars to enable market-leading broadband
performance and ever-expanding network coverage.
New York’s “Affordable Broadband Act” would
impose unprecedented and unlawful rate regulation
on broadband services. By upholding the Affordable
Broadband Act, the decision below turns the
Communications Act upside down, replacing a
nationwide light-touch regulatory framework for
broadband with a state-by-state patchwork centered
on onerous public utility regulation. And it will chill
investment in a market that has thrived in the
absence of heavy-handed regulation.
NCTA’s
members have a direct interest in ensuring that they
may continue to invest in broadband infrastructure
and provide their consumers with new features and
services under a uniform, light-touch federal
regulatory framework.
1
Amicus curiae timely notified all parties of its intent to
file this brief. No counsel for any party authored this brief in
whole or in part, and no person or entity—aside from amicus
curiae, its members, and its counsel—made a monetary
contribution intended to fund the preparation or submission of
this brief.
2
INTRODUCTION AND SUMMARY OF
ARGUMENT
Until recently, no one—not the federal
government, not any State—had ever tried to dictate
by statute the price of broadband in the United
States. To the contrary, broadband has flourished for
decades under a “light-touch” federal regulatory
framework that forbids government rate-setting and
other heavy-handed mandates.
New York’s unprecedented Affordable Broadband
Act (ABA)—which forces broadband providers to sell
broadband to certain households for $15 or $20 per
month—marks a stark departure from that
framework. The district court correctly enjoined the
ABA on several preemption grounds, but a divided
Second Circuit panel reversed.
The panel
acknowledged that because broadband is an
“information service” subject to Title I of the
Communications Act (rather than the commoncarrier provisions of Title II), Pet. App. 36a, the FCC
has “no authority to impose rate regulations” at the
federal level, id. at 34a. But it reasoned that, in the
absence of a federal power to prescribe broadband
rates, each of the fifty States necessarily enjoys that
power. Id. at 33a-35a.
That conclusion does not follow.
The
Communications Act draws a clear line between
“telecommunications services” that may be treated as
common carrier services (subject to rate regulation)
and “information services” that may not be. It
permits a provider of telecommunications services
(called a “telecommunications carrier”) to be treated
as a common carrier “only to the extent that it is
engaged in providing telecommunications services.”
3
47 U.S.C. § 153(51). It defines a service “that provides
access to the Internet” as an “information service” and
an “interactive computer service.” Id. § 230(f)(2). And
it reflects Congress’s determination to “preserve the
vibrant and competitive free market that presently
exists for the Internet and other interactive computer
services, unfettered by Federal or State regulation.”
Id. § 230(b)(2) (emphasis added). In holding that the
Communications Act forbids federal common-carrier
regulation—but permits state common-carrier
regulation—of broadband service, the Second
Circuit’s decision subverts Congress’s intent to ensure
a light-touch regulatory framework for broadband.
Indeed, the Second Circuit’s decision undercuts a
preemptive, light-touch federal regulatory framework
that stretches back nearly 50 years. Even before the
rise of the modern internet, the FCC distinguished
“basic service”—i.e., a standard phone service—from
“enhanced services” involving computer-processing
functions accessed over telephone lines.
See
Amendment of Section 64.702 of the Commission’s
Rules and Regulations (Second Computer Inquiry)
(Computer II), 77 F.C.C.2d 384, 400-02 ¶¶ 39-43
(1980). The FCC consistently recognized that federal
law forbade state regulation of interstate “enhanced
services.”
And when Congress amended the
Communications Act in 1996, it codified that
distinction between “basic” and “enhanced” services
in
the
statutory
distinction
between
a
“telecommunications service” and an “information
service.”
That enactment carried forward and
reinforced federal preemption of State broadband rate
regulation that every State had respected until now.
The question presented by this case is profoundly
important. Broadband is a vital part of modern life.
4
Service quality has steadily increased as prices have
declined under the Communications Act’s light-touch
regulatory framework. And numerous providers have
introduced low-income broadband programs that
include significantly reduced rates for low-income and
other qualifying households. New York is trying to fix
what isn’t broken, and the Second Circuit’s decision
lights a trail for other States to follow suit, thus
destroying the regulatory conditions that have
fostered broadband’s success.
The petition is also timely. The Sixth Circuit
recently stayed the FCC’s attempt to treat broadband
providers as common carriers under Title II of the
Communications Act. See In re MCP No. 185, 2024
WL 3650468, at *3-4 (6th Cir. Aug. 1, 2024) (per
curiam). If that determination holds, then the Second
Circuit’s decision will encourage States to dictate
broadband prices and thereby contravene federal law.
To be sure, New York’s attempt to regulate rates is
preempted regardless of whether broadband is
classified as an information service under Title I or a
telecommunications service under Title II: Just as
the existing information-service classification for
broadband precludes State rate regulation, the FCC’s
express rejection of rate regulation in its recent
broadband reclassification order would preempt
States from contravening that determination if that
order were to take effect. But given the close
relationship between the classification issue and the
preemptive effect of the federal regulatory scheme—
and the fact that the basis for preemption differs
depending on broadband’s classification—the most
orderly approach would be for this Court either (1) to
hold this petition until after the Sixth Circuit or this
Court (if someone seeks and this Court grants
5
certiorari) first confirms the Title I classification of
broadband, or (2) to grant the petition and delay
briefing and argument so the Court can address this
issue alongside or after resolution of challenges to the
FCC’s recent order.
ARGUMENT
I. THE COMMUNICATIONS ACT PREEMPTS
NEW YORK’S AFFORDABLE BROADBAND
ACT
The Communications Act preempts New York’s
Affordable Broadband Act, which conflicts with core
provisions of that statute and undermines a
longstanding federal regulatory approach reaching
back nearly 50 years.
A.
The Communications Act Bars CommonCarrier Regulation Of Broadband
1. The Communications Act of 1934 established a
federal regulatory framework for all aspects of
interstate wire and radio communications. Pub. L.
No. 73-416, 48 Stat. 1064 (1934). Title I of that Act
established the FCC, 47 U.S.C. § 151, and gave the
FCC plenary authority over “all interstate and foreign
communication by wire or radio … which originates
and/or is received within the United States,” id.
§ 152(a); see Louisiana Pub. Serv. Comm’n v. FCC,
476 U.S. 355, 360 (1986) (noting FCC’s “plenary
authority” over “interstate service[s]”). In contrast,
“intrastate” communication services remained
outside the FCC’s domain. 47 U.S.C. § 152(b).
Title II of the Communications Act subjected
telephone companies to “mandatory common-carrier
regulation.” Nat’l Cable & Telecomms. Ass’n v. Brand
X Internet Servs., 545 U.S. 967, 973-74 (2005). Under
6
that common-carrier framework, the FCC may, for
instance, tell telecommunications carriers where to
deploy infrastructure. See, e.g., 47 U.S.C. § 214.
Likewise, carriers must charge rates that are “just
and reasonable.” Id. § 201(b). If the FCC finds a rate
to be unjust or unreasonable, it may dictate the rates
to be charged. Id. § 205(a) (FCC is “authorized and
empowered to determine and prescribe what will be
the just and reasonable charge”).
In 1996, as the internet was beginning to
transform interstate communications, Congress
amended the Communications Act, seeking to “reduce
regulation in order to secure lower prices and higher
quality services” and to “encourage the rapid
deployment of new telecommunications technologies.”
Telecommunications Act of 1996, Pub. L. No. 104-104,
110 Stat. 56, 56 (1996 Act).
The 1996 Act distinguished between two different
categories of interstate communications services:
information
services
and
telecommunications
services. 47 U.S.C. § 153(24), (53). An “information
service” is “the offering of a capability for generating,
acquiring,
storing,
transforming,
processing,
retrieving, utilizing, or making available information
via telecommunications.”
Id. § 153(24).
A
“telecommunications service,” by contrast, is “the
offering of telecommunications for a fee directly to the
public,” id. § 153(53), where “telecommunications” is
the “transmission, between or among points specified
by the user, of information of the user’s choosing,
without change in the form or content,” id. § 153(50).
Under the 1996 Act, telecommunications-service
providers are regulated under Title II as common
carriers, while information-service providers are
instead subject to Title I’s light-touch regime. See
7
Brand X, 545 U.S. at 975-76. And any “service” that
“provides access to the Internet” is both an
“information service” and an “interactive computer
service” under the Act. 47 U.S.C. § 230(f)(2). The
1996 Act also made clear that Congress sought “to
preserve the vibrant and competitive free market …
for the Internet and other interactive computer
services, unfettered by Federal or State regulation.”
Id. § 230(b)(2); see also id. § 230(a)(4) (finding that the
internet has “flourished … with a minimum of
government regulation”).
For decades—consistent with the plain language
of the 1996 Act—the FCC generally treated
broadband internet access service as an “information
service” subject to the light-touch regulatory
framework provided for under Title I. See Brand X,
545 U.S. at 977-79; Mozilla Corp. v. FCC, 940 F.3d 1,
20 (D.C. Cir. 2019).2 Indeed, the FCC’s light-touch
treatment of broadband has its roots in a much older
regulatory history stretching back nearly 50 years.
2. As described below, the 1996 Act’s distinction
between a “telecommunications service” and an
“information service” finds its roots in an older set of
FCC regulatory decisions that distinguished between
“basic” and “enhanced” services. See Brand X, 545
U.S. at 975-77 (describing this history). Under that
regime, interstate enhanced services were not subject
2
Although the FCC recently tried to reclassify broadband
as a “telecommunications service” subject to Title II, the Sixth
Circuit has stayed that reclassification order. In re MCP No.
185, 2024 WL 3650468, at *1 (6th Cir. Aug. 1, 2024); see also id.
at *2 (discussing FCC’s 2015 order classifying broadband as a
Title II telecommunications service and FCC’s 2018 order
classifying broadband as a Title I information service).
8
to common-carrier regulation at the federal or state
level, and the FCC expressly recognized that States
were preempted from regulating interstate enhanced
services as common-carrier services. When Congress
adopted that regulatory framework in the 1996 Act, it
ratified that framework’s preemptive effect.
a. In the late 1970s, the FCC developed rules to
regulate data-processing services accessed through
telephone wires. Recognizing that “[c]ommon carrier
rules designed for telephone-wire monopolies … could
inhibit the development of ‘data information
services,’” the FCC devised a solution. In re MCP No.
185, 2024 WL 3650468, at *1. Under an FCC
regulatory order known as Computer II, the FCC
“distinguished between ‘basic’ service (like telephone
service) and ‘enhanced’ service (computer-processing
service offered over telephone lines).” Brand X, 545
U.S. at 976; see Amendment of Section 64.702 of the
Commission’s Rules and Regulations (Second
Computer Inquiry) (Computer II), 77 F.C.C.2d 384,
400-02 ¶¶ 39-43 (1980). A “basic service” was defined
as “a pure transmission capability over a
communications path that is virtually transparent in
terms of its interaction with customer supplied
information.” Computer II, 77 F.C.C.2d at 420 ¶ 96.
By contrast, an “enhanced service” was one in which
“computer processing applications [we]re used to act
on the content, code, protocol, and other aspects of the
subscriber’s information,” as well as “protocol
conversion,” id. at 420-22 ¶¶ 97, 99, which is the
“ability to communicate between networks that
employ different data-transmission formats,” Brand
X, 545 U.S. at 977.
Enhanced services thus
“involve[d] subscriber interaction with stored
information,” Computer II, 77 F.C.C.2d at 498, and
9
were the “precursors to modern information services
like cable Internet,” Comcast Corp. v. FCC, 600 F.3d
642, 655 (D.C. Cir. 2010).
Importantly, basic service was subject to federal
common-carrier regulation; enhanced service was not.
Id. at 976-77; see Computer II, 77 F.C.C.2d at 428-32
¶¶ 114-23. The FCC determined that enhanced
services should not be subject to the “rate and service
provisions of Title II,” id. at 430 ¶ 119, because that
would “restrict[] this fast moving, competitive
market,” “disserve the interest of consumers,” and
contravene “the goals of the Communications Act,” id.
at 434 ¶ 129.
Two years later, an order resolving an antitrust
case against AT&T similarly distinguished between
regulated
“telecommunications
services”
and
unregulated “information services.” United States v.
Am. Tel. & Tel. Co. (“AT&T”), 552 F. Supp. 131, 22829 (D.D.C. 1982), aff’d sub nom. Maryland v. United
States, 460 U.S. 1001 (1983). That order incorporated
the Computer II framework: What Computer II had
described as “‘enhanced services’” were “essentially
the equivalent of the ‘information services’ described
in the proposed decree.” Id. at 178 n.198. In AT&T,
telecommunications service was defined as “the
offering
of
telecommunications,”
where
“[t]elecommunications” was the “transmission,
between or among points specified by the user, of
information of the user’s choosing, without change in
the form or content.” Id. at 229. Information service
was defined as “the offering of a capability for
generating,
acquiring,
storing,
transforming,
processing, retrieving, utilizing or making available
information
which
may
be
conveyed
via
telecommunications.” Id.
10
The 1996 Act brought this old soil with it. See
George v. McDonough, 596 U.S. 740, 746 (2022). The
terms “telecommunications service” and “information
service” “build upon frameworks established prior to
the passage of the 1996 Act”—namely, Computer II
and AT&T. Federal-State Joint Bd. on Universal
Serv., 13 FCC Rcd. 11,501 ¶ 13 (1998). As this Court
has put it, “telecommunications service” is “the
analog to basic service,” subject to “mandatory Title II
common-carrier regulation,” while “information
service” is the “analog to enhanced service.” Brand X,
545 U.S. at 977. Because “Congress passed the[se]
definitions … against the background of” Computer
II’s distinction between basic and enhanced services,
“the parallel terms ‘telecommunications service’ and
‘information service’ substantially incorporated their
meaning.” Id. at 992; see also Federal-State Joint Bd.
on Universal Serv., 12 FCC Rcd. 8776, 9179-80 ¶ 788
(1997); In re MCP No. 185, 2024 WL 3650468, at *5
(Sutton, C.J., concurring). Plus, the 1996 Act takes
the two terms straight from AT&T and defines them
using virtually identical language. Compare 552 F.
Supp. at 229, with 47 U.S.C. § 153(24), (50), (53).
b. That well-established precedent confirms not
only the proper classification of broadband as an
information service (the question pending in the Sixth
Circuit), but also the preemptive effect of that
classification. In response to petitions for clarification
and further reconsideration in Computer II, the FCC
explained that it had “preempted the states” in
“determin[ing] that the provision of enhanced services
is not a common carrier public utility offering and
that efficient utilization and full exploitation of the
interstate telecommunications network would best be
achieved if these services are free from public utility-
11
type regulation.” Amendment of Section 64.702 of the
Commission’s Rules and Regulations (Second
Computer Inquiry), 88 F.C.C.2d 512, 541 ¶ 83 n.34
(1981). As a result, States could “not impose common
carrier tariff regulation on a carrier’s provision of
enhanced services.” Id.
Leading up to the 1996 Act, the FCC consistently
found preemptive effect in the Computer II regime,
holding that it “foreclose[ed] the possibility of state
regulation” of enhanced services. Amendment of
Sections 64.702 of the Commission’s Rules and
Regulations (Third Computer Inquiry), 104 F.C.C.2d
958, 1125 ¶ 343 (1986); see also, e.g., id. (“In the
Computer II proceeding we preempted the states,”
determining that “since the provision of enhanced
services is not common carriage, the efficient
utilization and full exploitation of the interstate
telecommunications network would best be achieved
if such services are free from regulation.”);
Amendment of Sections 64.702 of the Commission’s
Rules and Regulations (Third Computer Inquiry), 2
FCC Rcd. 3035, 3036 ¶ 6 (1987) (“We affirm our
preemption in Computer II of state common carrier
regulation of enhanced services.”).
While some States attempted to avoid preemption
by claiming that they could regulate purely intrastate
enhanced services as common carriers, they did not
argue—as New York does here—that they could also
regulate interstate enhanced services. Indeed, courts
ruled against States whenever their regulations
impacted interstate services. See, e.g., Comput. &
Commc’ns Indus. Ass’n v. FCC, 693 F.2d 198, 214-16
(D.C. Cir. 1982) (explaining that “[t]he conflicting
state policy, meant to affect only intrastate use, would
unavoidably affect the federal policy adversely” by
12
reaching interstate communications as well, and thus
that “the state regulatory power must yield to the
federal”).
In enacting the 1996 Act, Congress adopted the
FCC’s regulatory framework, which sought to
promote competition through deregulation.
It
thereby also embraced the FCC’s preemption of state
law. States therefore may not subject broadband
providers to common-carrier regulation.
B.
The Affordable Broadband Act Conflicts
With The Communications Act
New York’s Affordable Broadband Act treats
broadband providers as common carriers by directly
regulating their rates.
The ABA requires all
broadband providers to sell high-speed broadband to
qualifying low-income households at a cost of no more
than $15 or $20 per month, depending on download
speeds, and strictly caps rate increases. See N.Y. Gen.
Bus. Law § 399-zzzzz(2)-(4). Such rate regulation is
the archetype of common-carrier treatment. See MCI
Telecomms. Corp. v. Am. Tel. & Tel. Co., 512 U.S. 218,
230-32 (1994) (describing rate regulation as “utterly
central” to common carriage (citation omitted)).
The Communications Act preempts New York’s
attempt to treat broadband providers as common
carriers.3 New York’s law is in direct conflict with
“the text and structure” of the Communications Act.
Virginia Uranium, Inc. v. Warren, 587 U.S. 761, 778
(2019) (opinion of Gorsuch, J.) (quoting CSX Transp.,
Inc. v. Easterwood, 507 U.S. 658, 664 (1993)); cf.
3
NCTA agrees with Petitioners that the ABA is
preempted for multiple reasons. See Pet. 13-21. NCTA here
focuses on conflict preemption.
13
United States v. Locke, 529 U.S. 89, 109 (2000)
(quoting California v. ARC Am. Corp., 490 U.S. 93,
100-01 (1989)) (finding preemption where state law
“stands as an obstacle to the accomplishment and
execution of the full purposes and objective of
Congress”). Indeed, that is so regardless of whether
broadband is classified as an information service
under Title I or a telecommunications service under
Title II.4
1. The Communications Act preempts the ABA
because broadband is an information service subject
to Title I’s light-touch regime. The 1996 Act explicitly
provides that the FCC may “treat[]” a
telecommunications carrier “as a common carrier
under this chapter only to the extent that it is engaged
in providing telecommunications services.” 47 U.S.C.
§ 153(51) (emphasis added). Thus, insofar as an
entity is providing an information service, the
Communications Act does not permit treating that
provider as a common carrier.
The 1996 Act expressly found that the internet
and other interactive computer services have
flourished “with a minimum of government
regulation,” and it codified Congress’s direction to
“preserve the vibrant and competitive free market
that presently exists for the Internet and other
interactive computer services, unfettered by Federal
or State regulation.” Id. § 230(a)(4), (b)(2) (emphasis
added). The 1996 Act also defined “interactive
computer service” as “any information service … that
4
Of course, because the basis for preemption is different
depending on whether broadband is classified under Title I or
Title II, see infra at 13-17, it makes sense to determine the
proper classification before conducting the preemption analysis.
14
provides access to the Internet,” id. § 230(f)(2)
(emphasis added)—thereby confirming that such
services were not to be subject to common-carrier
regulation. As the FCC has previously recognized,
this “light-touch framework” has fostered “rapid and
unprecedented growth.” Restoring Internet Freedom,
33 FCC Rcd. 311, 312 ¶ 1 (2018) (2018 Order). And,
as described above, the 1996 Act adopted and ratified
the FCC’s preexisting distinction between basic
services (subject to the FCC’s Title II commoncarriage regulatory regime) and enhanced services
(subject to neither Title II nor any state commoncarrier regulations). Supra at 7-10; see also In re MCP
No. 185, 2024 WL 3650468, at *5-6 (Sutton, C.J.,
concurring). By codifying that framework, Congress
precluded the imposition of any common-carrier
regulation (federal or state) on an “information
service” like broadband.
The conflict, then, is plain. Whereas the 1996 Act
sought an unfettered market for information services
like broadband—shielding such services from federal
or State common-carrier regulation—New York’s law
shackles broadband providers to common-carrier
regulation of the kind that Congress pointedly sought
to avoid. And the Communications Act allows the
FCC to treat a provider as a common carrier “under
this chapter only to the extent that” it provides
telecommunications
services—not
information
5
services. 47 U.S.C. § 153(51).
The ABA thus
5
The Ninth Circuit in ACA Connects v. Bonta, concluded
that “under this chapter” meant that only federal commoncarrier regulation was prohibited and therefore allowed state
common-carrier regulation to proceed without restriction. 24
F.4th 1233, 1245 (9th Cir. 2022) (emphasis and citation omitted).
15
conflicts with “the text and structure” of the
Communications Act. Virginia Uranium, 587 U.S. at
778 (opinion of Gorsuch, J.) (citation omitted).
The Second Circuit thought otherwise, reasoning
that because “Title I grants the FCC no authority to
impose rate regulations,” the “FCC has no power to
preempt broadband rate regulation.” Pet. App. 34a.
In short, the majority thought that if Congress gave
the FCC no authority to regulate broadband rates,
then the States had full authority to do so.
That reasoning is wrong. The majority made a
category mistake when it repeatedly referred to the
“FCC” as having the “power to preempt.” Id. at 34a,
38a. Here, it is not the FCC that preempts New
York’s law through its regulatory action; it is
Congress through the Communications Act. See, e.g.,
Locke, 529 U.S. at 116 (asking whether state law is
“pre-empted by these titles or under any other federal
law”); Kansas v. Garcia, 589 U.S. 191, 202 (2020)
(noting that “federal restrictions or rights that are
said to conflict with state law must stem from either
the Constitution itself or a valid statute enacted by
Congress”). The fundamental issue is that New
York’s attempt at rate regulation conflicts with the
Communications Act itself. Regardless of what the
FCC decides to do (or not do), that statute is clear, and
the States cannot subvert congressional intent by
treating broadband providers as rate-regulated
common carriers.
But that conclusion makes no sense under the text of the 1996
Act and the regulatory history. Supra at 5-12. Instead, “under
this chapter” simply means that the Communications Act (not
state law) defines the scope of common-carrier regulation.
Otherwise, States could get around preemption merely by
creatively redefining what it means to be a common carrier.
16
In fact, this Court has already rejected the Second
Circuit’s reasoning in the common-carrier context.
When interpreting the 1938 Natural Gas Act, the
Court found that Congress’s decision “to give market
forces a more significant role” when amending a
“comprehensive federal regulatory scheme” did not
thereby “give the States the power it had denied
FERC.” Transcontinental Gas Pipe Line Corp. v.
State Oil & Gas Bd. of Miss., 474 U.S. 409, 422 (1986).
Instead, Congress’s decision to let market forces
“determine[e]” the relevant “price[s]” naturally
entails the conclusion that “States … may not
regulate” prices either. Nw. Cent. Pipeline Corp. v.
State Corp. Comm’n of Kansas, 489 U.S. 493, 507 n.8
(1989); see also Ark. Elec. Coop. Corp. v. Ark. Pub.
Serv. Comm’n, 461 U.S. 375, 384 (1983) (“[A] federal
decision to forgo regulation in a given area may imply
an authoritative federal determination that the area
is best left unregulated, and in that event would have
as much pre-emptive force as a decision to regulate.”).
So too here—especially in light of the parallel
statutory language. Compare 47 U.S.C. § 152, with
15 U.S.C. § 717(b)-(c) (statutes “shall apply” to
“[i]nterstate” but not “intrastate” activity).
2. Although NCTA submits that broadband may
not be permissibly treated as a Title II
telecommunications service, it would be just as clear
under such a classification that the Communications
Act preempts New York’s law—even under the
Second Circuit’s reasoning. Thus, if the FCC’s recent
attempt to reclassify broadband as a Title II
telecommunications service were allowed to stand,
the ABA would remain preempted.
Title II imposes common-carrier regulations,
including the ability to regulate rates. Supra at 5-6;
17
47 U.S.C. §§ 201(b), 205. But the FCC may decline to
enforce any common-carrier regulations if it believes
that forbearance is in the public interest. 47 U.S.C.
§ 160(a). And if the FCC has decided to forbear from
enforcing a provision, a “State commission may not
continue to apply or enforce” that provision. Id.
§ 160(e). Thus, the Second Circuit majority had “little
doubt” that the FCC’s exercise of statutory
forbearance authority has preemptive effect. Pet.
App. 33a-34a.
The FCC has since done just that in the order that
the Sixth Circuit stayed. First, the FCC classified
broadband as a Title II telecommunications service,
with attendant common-carrier regulation. See Order
¶¶ 2, 188-89, Safeguarding and Securing the Open
Internet, WC Docket Nos. 23-230 & 17-108, FCC 2452 (rel. May 7, 2024), https://docs.fcc.gov/
public/attachments/FCC-24-52A1.pdf (2024 Order).
Second, the FCC found that it was “in the public
interest to forbear from applying” the rate-regulation
provisions of Title II. Id. ¶¶ 386-89; see also id. ¶ 639
(“conclud[ing]” that “costs of applying provisions to
impose ex ante or ex post rate regulation … would
exceed the benefits”). By the Second Circuit’s own
lights, the FCC’s forbearance decision preempts the
ABA.6
6
The FCC’s suggestion that “states may have a role to
play in promoting broadband affordability,” 2024 Order ¶ 386
n.1578, see also id. ¶ 275, cannot override the decision by
Congress that common-carrier regulation is prohibited. While
the FCC did not provide any explanation or basis for this
affordability role, the ABA plainly exceeds the Communications
Act’s limits on state authority because it establishes mandatory
prices for service, which is a quintessential exercise of commoncarrier regulation.
18
***
The Second Circuit majority held that Congress
gave to the States what it simultaneously took from
the FCC. That conclusion makes a hash of the
Communications Act. And that error warrants this
Court’s review.
II. THE
QUESTION
PRESENTED
IS
PROFOUNDLY IMPORTANT AND TIMELY
A.
New York’s Rate Regulation Of
Broadband Sets A Dangerous Precedent
Broadband services “are absolutely essential to
modern day life, facilitating employment, education,
healthcare,
commerce,
community-building,
communication, and free expression.” 2024 Order,
¶ 26; see also, e.g., In re MCP No. 185, 2024 WL
3650468, at *3.
The COVID-19 pandemic
underscored that “without a broadband connection,
consumers could not fully participate in society.”
2024 Order ¶ 1. No wonder the Sixth Circuit
concluded that treating broadband providers as
common carriers raises a “major question” of “‘vast
“economic and political significance.”’” In re MCP No.
185, 2024 WL 3650468, at *3 (citation omitted). Yet
even when the FCC has claimed the power to subject
broadband providers to common-carrier regulation, it
has nevertheless used its statutory forbearance
authority to prevent rate regulation. 2024 Order
¶¶ 386-89; Protecting and Promoting the Open
Internet, 30 FCC Rcd. 5601, 5604-05, 5612 ¶¶ 5, 37
(2015) (2015 Order).
In 2015, when the FCC first classified broadband
as a Title II service, it repeatedly and forcefully
emphasized that it would not undertake “rate
19
regulation.” 2015 Order 5604-05, 5612, 5775 ¶¶ 5, 37,
382. Indeed, the FCC “d[id] not and c[ould not]
envision adopting new ex ante rate regulation of
broadband Internet access service in the future.” Id.
at 5814 ¶ 451. And so it found that forbearance from
rate regulation was in the public interest. Id. The
FCC’s recent reclassification order hit the same notes,
concluding that “the costs” of “ex ante or ex post rate
regulation” would “exceed the benefits.” 2024 Order
¶¶ 646, 689. Again, the FCC decided to forebear from
rate regulation under Title II, and it reprised the
FCC’s 2015 conclusion that “we do not and cannot
envision adopting new ex ante rate regulation.” Id.
¶ 386 (quoting 2015 Order 5814 ¶ 451). And, again,
the FCC found that forbearance is “in the public
interest.” Id.
In short, the FCC has never thought that
compelling broadband providers to charge certain
rates could be reconciled with the public interest. Cf.
Former FCC Commissioners Jonathan Adelstein,
Mignon Clyburn, Michael O’Rielly, and Ajit Pai Amici
Curiae Br. 19, N.Y. State Telecomms. Ass’n v. James,
101 F.4th 135 (2d Cir. 2024) (No. 21-1975), 2022 WL
671756 (former FCC Chairman and Commissioners
noting, on a bipartisan basis, that New York’s law
“would fundamentally alter longstanding law and
practice when it comes to rate regulation” and
undermine a “bedrock principle that has long
governed communications regulation in the United
States”). And it is not. Rate regulation is incredibly
intrusive,
and
investment
in
broadband
infrastructure in the United States has flourished
precisely because the service has not been regulated
like a public utility. Even the mere threat of rate
regulation places “investments in broadband
20
infrastructure at risk” and has previously resulted in
“lost market capitalization.” 2018 Order 369-70
¶ 101. That threat hangs “particularly heavily on the
heads of small” providers with more limited
resources—thus causing “particularly deleterious
effects” for the “often rural and/or lower-income”
communities that such providers serve. Id. at 372-73
¶¶ 103-05. The specter of rate regulation therefore
“distorts” the business choices of broadband providers
and “delay[s]” the rollout of “new features or services”
for consumers. Id. at 368-69 ¶¶ 99-100.
By contrast, the 1996 Act’s “‘light-touch’
regulatory framework” has facilitated “tremendous
investment and innovation on the Internet.” 2015
Order 5603-04 ¶ 5; see also 2018 Order 312 ¶ 1 (noting
that “a free and open Internet underwent rapid and
unprecedented growth” under a “light-touch
framework”). Under that framework, prices continue
to fall while speeds continue to rise dramatically.
From 2005 to 2015, “broadband speeds increased
3,200 percent”—while from 1996 to 2012, “prices per
[megabit per second] fell by more than 87 percent.”
2018 Order 363 ¶ 86. Those trends have continued to
this day: From 2015 to 2023, download speeds more
than doubled, while prices dropped by about 38%
without adjusting for inflation; and they dropped by
55% on an inflation-adjusted basis. USTelecom, 2023
Broadband Pricing Index 3 (Oct. 11, 2023),
https://www.ustelecom.org/wp-content/uploads/2023/
10/USTelecom-2023-BPI-Report-final.pdf (relying on
FCC and Bureau of Labor Statistics data). And such
price reductions occurred even as the cost of other
consumer goods and services rose by almost 28%
during the same period. Id. at 4. In total, the price
per megabit went from $28.13 in 2000 to $0.64 in
21
2020—a 98% decrease.
NCTA, Industry Data:
Closing the Digital Divide, https://www.ncta.com/
industry-data/investment-in-infrastructure?field_
industry_data_categories_target_id[84]=84 (last
visited Sept. 10, 2024).
The broadband industry has also gone to great
lengths to ensure affordability through low-income
broadband programs. Over the last 10 years, more
than 14 million consumers have connected to the
internet via providers’ low-cost broadband programs.
Id. (Closing the Digital Divide).
For example,
Comcast and Cox both provide qualifying low-income
households with high-speed broadband at reduced
rates through programs like Xfinity “Internet
Essentials” and “Cox Connect2Compete.”7
Contrast this approach with that of Europe, which
has “long applied centralized, utility-style controls to
their continent’s Internet infrastructure.” 2024 Order
at 493 (Dissenting Statement of Commissioner Carr).
U.S. broadband networks are faster than the
broadband networks of every single country in
Europe; U.S. broadband markets are more
competitive than those in Europe; and U.S.
broadband providers bridge the digital divide more
effectively than do European carriers. Id. All of that
is the result of a three times greater investment per
household in broadband infrastructure. Id.
Heedless of the myriad benefits of light-touch
regulation, New York has chosen a heavy-handed
7
See Xfinity, Internet Essentials, https://www.xfinity.com/
learn/internet-service/internet-essentials (last visited Sept. 10,
2024); Cox, Cox Connect2Compete, https://www.cox.com/
residential/internet/connect2compete.html (last visited Sept. 10,
2024).
22
approach. If the Second Circuit’s decision is allowed
to stand, and if the Title I information service
classification for broadband remains in effect (as the
Sixth Circuit has made clear is likely), other States
are likely to follow where New York has led. Congress
recently declined to continue funding the Affordable
Connectivity Program, a subsidy program through
which low-income consumers could receive up to $30
per month for broadband. See FCC, Affordable
Connectivity Program, https://www.fcc.gov/acp (last
visited Sept. 10, 2024). Absent this Court’s review,
state rate regulation is likely to grow, burdening
broadband providers, deterring investment, and
harming consumers.
B.
Pending Litigation Over The FCC’s
Reclassification Of Broadband Makes
The Petition Particularly Timely
Besides being important, the question presented
here is also particularly timely. Just a few weeks ago,
the Sixth Circuit stayed the FCC’s 2024 Order that
reclassified
broadband
as
a
Title
II
telecommunications service. In re MCP No. 185, 2024
WL 3650468, at *1. The Sixth Circuit concluded that
the FCC’s order “implicates a major question, and the
[FCC] has failed to satisfy the high bar for imposing
such regulations.” Id. at *3; see also id. at *5 (Sutton,
C.J., concurring) (concluding that the “best reading of
the statute … shows that Congress likely did not view
broadband providers as common carriers under Title
II of the Communications Act”).
Because the
petitioners challenging the 2024 Order had “shown
that they are likely to succeed on the merits and that
the equities support[ed] them,” the Sixth Circuit
panel unanimously stayed the order. Id. at *1. That
23
decision means that broadband currently remains
free from federal common-carrier regulation—and
that, if the merits panel reaches the same conclusion,
broadband will likely stay that way.
But if that result holds, then under the Second
Circuit’s reasoning, any State can impose onerous
rate regulation on broadband providers precisely
because Congress withheld that authority from the
FCC. That result nullifies Congress’s decision to take
a light-touch approach in the Communications Act.
To be sure, the Communications Act preempts States
from dictating the price of broadband regardless of
what the Sixth Circuit decides. Supra at 12-18. But
the Sixth Circuit’s pending determination regarding
the proper classification of broadband clearly bears on
the significance of the question presented here. And
because the Sixth Circuit will consider that question
on an expedited schedule, see In re MCP No. 185, 2024
WL 3650468, at *5, that question may be resolved
sooner rather than later.
Ultimately, this Court should hold that the
Communications Act preempts States from
regulating broadband rates after the Title I
classification of broadband is confirmed. The Court
can achieve that ordering either by holding this
petition until the Sixth Circuit’s ruling becomes final,
or by granting this petition and then delaying briefing
or argument here so that this case can be resolved
alongside or following the completion of any
challenges to the FCC’s 2024 Order.
24
CONCLUSION
The petition for certiorari should be granted.
Respectfully submitted,
RICK C. CHESSEN
RUSSELL P. HANSER
STEVEN MORRIS
PAMELA ARLUK
NCTA – THE INTERNET &
TELEVISION ASSOCIATION
25 Massachusetts Ave., NW
Suite 100
Washington, DC 20001
(202) 222-2445
MATTHEW A. BRILL
Counsel of Record
MATTHEW T. MURCHISON
CHARLES S. DAMERON
ALEXANDER G. SIEMERS
LATHAM & WATKINS LLP
555 Eleventh Street, NW
Suite 1000
Washington, DC 20004
(202) 637-2200
matthew.brill@lw.com
Counsel for Amicus Curiae
September 13, 2024
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.