In the United States Court of Appeals for the District of Columbia Circuit ______

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In the United States Court of Appeals for the District of Columbia Circuit ______ USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 1 of 37 Nos. 15-1063 (and consolidated cases) ________________________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT ________________________________________ UNITED STATES TELECOM ASSOCIATION, et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION, et al., Respondents. ________________________________________ On Petition for Review from the Federal Communications Commission ________________________________________ PETITION FOR REHEARING EN BANC FOR INTERVENORS TECHFREEDOM, JEFF PULVER, SCOTT BANISTER, CHARLES GIANCARLO, AND DAVID FRANKEL ________________________________________ BERIN M. SZÓKA C. BOYDEN GRAY THOMAS W. STRUBLE ADAM J. WHITE TECHFREEDOM DEREK S. LYONS 110 Maryland Avenue, NE ADAM R.F. GUSTAFSON Suite 409 JAMES R. CONDE Washington, DC 20002 BOYDEN GRAY & ASSOCIATES (202) 803-2867 801 17th St. N.W., Suite 350 [email protected] Washington, DC 20006 (202) 955-0620 July 29, 2016 [email protected] (Page 1 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 2 of 37 TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................. i TABLE OF AUTHORITIES ....................................................................... ii GLOSSARY ................................................................................................ iv INTRODUCTION AND RULE 35(b) STATEMENT ................................. 1 BACKGROUND .......................................................................................... 3 ARGUMENT ............................................................................................... 5 I. The panel’s decision conflicts with Supreme Court precedent. .................................................................................. 5 A. King v. Burwell prohibits Chevron deference in this case involving questions of utmost “economic and political significance.” ..................................................... 5 B. The panel erred in concluding that Brand X controls over King. ......................................................................... 8 C. Utility Air Regulatory Group v. EPA prohibits the FCC’s rewrite of the Communications Act. ................. 10 II. This case presents issues of exceptional importance. ........... 14 CONCLUSION .......................................................................................... 15 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE ADDENDUM A: CERTIFICATE AS TO PARTIES, RULINGS, AND RELATED CASES ADDENDUM B: CORPORATE DISCLOSURE STATEMENT ADDENDUM C: PANEL OPINION (Page 2 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 3 of 37 TABLE OF AUTHORITIES Page(s) Cases Am. Bar Ass’n v. FTC, 430 F.3d 457 (D.C. Cir. 2005) ................................................................. 7 Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010) ................................................................. 3 Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016) ............................................................................. 6 FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) ............................................................................. 6, 7 Indus. Union Dep’t, AFL-CIO v. Am. Petroleum Inst. 448 U.S. 607 (1980) ............................................................................... 12 * King v. Burwell, 135 S. Ct. 2480 (2015) ........................................................... 2, 6, 8, 9, 14 Loving v. U.S., 742 F.3d 1013 (D.C. Cir. 2014) ............................................................... 7 MCI Telecomms. Corp. v. AT&T Co., 512 U.S. 218 (1994) ................................................................................. 7 Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) ............................................................................. 8, 9 Pharm. Res. & Mfrs. of Am. v. HHS, 43 F. Supp. 3d. 28 (D.D.C. 2014) ............................................................ 6 U.S. v. Mead Corp., 533 U.S. 218 (2001) ................................................................................. 6 U.S. v. Philip Morris USA, Inc., 396 F.3d 1190 (D.C. Cir. 2005) ............................................................... 8 ii (Page 3 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 4 of 37 * Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427 (2014) ..................................................... 2, 10, 11, 12, 13 Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) ............................................................. 3, 4 Statutes 47 U.S.C. § 153(24) ................................................................................. 4, 9 47 U.S.C. § 153(50) ..................................................................................... 4 47 U.S.C. § 153(53) ..................................................................................... 8 47 U.S.C. § 160(a) ..................................................................................... 10 47 U.S.C. § 160(b) ..................................................................................... 13 47 U.S.C. § 230(a)(1) ................................................................................. 14 47 U.S.C. § 230(a)(3) ................................................................................. 14 47 U.S.C. § 230(a)(4) ....................................................................... 1, 12, 14 47 U.S.C. § 230(b)(2) ............................................................................. 1, 12 47 U.S.C. § 332(d)(2) ............................................................................... 5, 9 Regulations 47 C.F.R. § 20.3 ........................................................................................... 5 * Authorities upon which Intervenors chiefly rely are marked with an asterisk. iii (Page 4 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 5 of 37 GLOSSARY Add. Addendum Communications Act of 1934 or Communications Act of 1934, Pub. Communications Act L. No. 73-416, 48 Stat. 1064 Dissenting Op. Opinion of Williams, J., concurring in part and dissenting in part from the Panel Opinion (Add. C-116) FCC Federal Communications Commission Order Report and Order on Remand, Declaratory Ruling, and Order, Protecting and Promoting the Open Internet, 30 FCC Rcd. 5601 (2015) (JA 3477-8876) Panel Op. Panel Opinion (June 14, 2016) (Add. C-1) Telecommunications Act of 1996 Telecommunications Act of 1996, or Telecommunications Act or Pub. L. No. 104-104, 110 Stat. 56 1996 Act iv (Page 5 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 6 of 37 INTRODUCTION AND RULE 35(b) STATEMENT In the Telecommunications Act of 1996, Congress determined that “the policy of the United States” would be “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[.]” 47 U.S.C. § 230(b)(2); see also id. § 230(a)(4). But the FCC’s “Open Internet Order” takes the opposite approach. It claims vast discretion under Title II of the Communications Act of 1934—the very statute the 1996 Act modernized—to regulate broadband Internet access services as common carriers. The FCC boasts that it has created a “Title II tailored for the 21st Century,” a modernized, “‘light-touch’ approach” suitable for regulating broadband Internet access service. Order ¶¶ 37, 38 (JA 3488). Yet despite “extensive” forbearance (what the FCC calls “tailoring”), some of Title II’s significant provisions continue to apply. Order ¶¶ 283-84 (JA 3600). And the FCC’s assertion of Title II jurisdiction, combined with inherently ephemeral tailoring, id. ¶ 538 (JA 3741), represents a claim to both broad new powers and unfettered discretion to decide if and when to deploy them. See id. ¶ 538 (JA 3741). If the Order stands, then (Page 6 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 7 of 37 broadband Internet access service providers will be subject to the type of regulatory framework that governed 19th century railroads, their only relief being that the FCC might be merciful and forbear, sometimes, from enforcing some parts of Title II. This case merits rehearing en banc for two reasons: First, the panel’s decision runs squarely contrary to Supreme Court precedents. Under King v. Burwell, courts must not give Chevron deference to agencies on questions “of deep ‘economic and political significance’ that [are] central to [a] statutory scheme” without explicit congressional instruction to do so. 135 S. Ct. 2480, 2489 (2015). As here, where there is no such express delegation of interpretive authority, the Court must interpret the relevant provisions de novo, even if they are ambiguous. Id. at 2489. The panel, however, deployed Chevron deference to affirm the FCC’s Order. Panel Op. 33. And the panel deferred despite radical statutory “tailoring” necessary to save the Order from certain invalidation, violating Utility Air Regulatory Group v. EPA. Dissenting Op. 61-62 (citing 134 S. Ct. 2427, 2446 (2014)). Second, this case presents issues of extraordinary importance. The FCC is subjecting all broadband Internet access service to common 2 (Page 7 of Total) USCA Case #15-1063 Document #1627850 Filed: 07/29/2016 Page 8 of 37 carrier regulation—a step unprecedented in the history of the Internet. The very first
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