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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 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT VERIZON, ) ) Appellant, ) ) v. ) No. 11-1355 ) FEDERAL COMMUNICATIONS COMMISSION, ) ) Appellee. ) MOTION TO DISMISS The Federal Communications Commission moves to dismiss the notice of appeal in this case for lack of jurisdiction. Verizon filed its notice of appeal pursuant to 47 U.S.C. § 402(b)(5), which grants this Court exclusive jurisdiction over FCC decisions that modify individual radio licenses. Because the challenged decision did not modify radio licenses within the meaning of Section 402(b)(5), jurisdiction does not lie under that provision. Case No. 11-1355 therefore should be dismissed. The Commission’s order is subject to review, however, pursuant to 47 U.S.C. § 402(a), and Verizon may invoke that jurisdictional provision. Indeed, it has done so. In Case No. 11-1356, filed contemporaneously with No. 11-1355, Verizon has filed a petition for review pursuant to Section 402(a). BACKGROUND 1. The FCC rulemaking order that Verizon seeks to challenge creates a high-level framework to “preserve the Internet as an open platform for innovation, investment, job creation, economic growth, competition, and free expression.” Preserving the Open Internet, 25 FCC Rcd 17905 ¶1 (2010), 76 Fed. Reg. 59192 (Sept. 23, 2011) (“Open Internet Order” or “Order”) (attached hereto). To achieve its goal of safeguarding the openness of the Internet and promoting certainty and predictability for all stakeholders in the broadband economy,1 the Commission set forth three “basic rules”: (1) a transparency rule that requires all providers of either fixed or mobile broadband service (such as cable companies, local telephone companies, and wireless service providers) to disclose their network management practices and performance, as well as their terms and conditions of service; (2) an anti-blocking rule that prohibits providers of fixed broadband service (such as cable companies, telephone companies, and ISPs that provide wireless “hot spots”) from blocking any lawful content or applications and that prohibits providers of mobile broadband service from blocking access to lawful websites or applications that compete with the 1 “Broadband” refers to high-speed broadband Internet access service offered in the mass market by Internet Service Providers (ISPs). See Open Internet Order ¶44. 2 mobile provider’s own services; and (3) a rule that prohibits fixed broadband providers from unreasonably discriminating in the transmission of traffic through the provider’s network. Id. ¶1. 2. The Commission based its rules on a number of statutory provisions. Among these authorizing provisions are: • Title II of the Communications Act of 1934 (the Act), including Section 201(b), 47 U.S.C. § 201(b), which grants the FCC authority to ensure that telephone rates and practices are just and reasonable, and Section 251(a)(1), 47 U.S.C. § 251(a)(1), which grants the agency authority to ensure that telephone carriers are interconnected; • Title III of the Act, including Section 301, 47 U.S.C. § 301, which entrusts the FCC with responsibility for “maintain[ing] the control of the United States over all the channels of radio transmission;” Section 303(g), 47 U.S.C. § 303(g), which grants the FCC broad authority over television and radio broadcasting; Section 309(a), 47 U.S.C. § 309(a), which requires that the Commission determine “whether the public interest, convenience, and necessity” would be served by the grant of a license; Section 309(j)(3), 47 U.S.C. § 309(j)(3), which directs the Commission to foster the “rapid deployment of new technologies, products and services;” and Section 316, 47 U.S.C. § 316, which allows the FCC to modify a license after it has been issued; • Title VI of the Act, including Sections 616(a) and 628, 47 U.S.C. §§ 536(a) & 548, which grant the Commission authority to combat discriminatory practices in the delivery of video programming; and • Section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 1302, which directs the Commission to take actions that “encourage the deployment” of broadband services by, among other things, “promot[ing] competition in the local 3 telecommunications market” and “remov[ing] barriers to infrastructure investment.” See Open Internet Order ¶¶117-133. 3. Verizon has challenged the Open Internet Order under two mutually exclusive jurisdictional theories. In Case No. 11-1356, Verizon filed a petition for review pursuant to 47 U.S.C. § 402(a), which generally authorizes judicial review of final FCC orders under the Hobbs Act, 28 U.S.C. §§ 2341 et seq. Petitions for review of the Open Internet Order have been filed by other litigants in the courts of appeals for the First, Second, Third, Fourth, and Ninth Circuits. Today, the FCC will notify the Judicial Panel on Multidistrict Litigation (JPML) that review proceedings have been instituted in multiple courts of appeals. The JPML will select a forum to hear the cases and direct that all pending cases seeking review of the Open Internet Order be consolidated. See 28 U.S.C. § 2112. In this case, filed at the same time as No. 11-1356, Verizon has filed a notice of appeal challenging the Open Internet Order pursuant to Section 402(b), 47 U.S.C. § 402(b). Section 402(b) makes this Court the exclusive venue for cases involving review of ten specific categories of Commission action that are excepted from Section 402(a). Verizon will be able to obtain judicial review of the Open Internet Order no matter which of the two jurisdictional provisions applies. Whether 4 the appropriate jurisdictional provision is Section 402(a) or Section 402(b) matters only because it may (but will not necessarily) determine the forum in which the case will be heard. Section 402(b) grants this Court exclusive jurisdiction, whereas Section 402(a) allows review either in this Circuit or in another circuit where the petitioner has its principal place of business. See 28 U.S.C. § 2343. This is not Verizon’s first attempt to confine judicial review of the Open Internet Order to this Court alone. In Case No. 11-1024, Verizon tried unsuccessfully to have this Court – and, indeed, a specific panel of this Court – review the Order. On January 20, 2011, before the Order had been published in the Federal Register, Verizon filed a Notice of Appeal in Case No. 11-1014 pursuant to 47 U.S.C. § 402(b). At the same time, Verizon filed a motion to assign the case to the same panel that decided Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010), a case involving Comcast’s challenge to an FCC adjudicative order reviewing that company’s Internet business practices. By Order of February 2, 2011, the Court denied Verizon’s motion for panel assignment. By Order of April 4, 2011, the Court dismissed Verizon’s notice of appeal as premature, noting that the Open Internet Order “is a rulemaking document … and is not a licensing 5 decision ‘with respect to specific parties.’” Order, Verizon v. FCC, No. 11-1014 (D.C. Cir. Apr. 4, 2011) (quoting 47 C.F.R. § 1.4(b)(1) and Note). ARGUMENT Congress has set forth “two mutually exclusive channels for the review of FCC decisions.” Vernal Enters., Inc. v. FCC, 355 F.3d 650, 655 (D.C. Cir. 2004); see also Tribune Co. v. FCC, 133 F.3d 61, 66 & n.4 (D.C. Cir. 1998). Section 402(b), which Verizon invokes here, provides for appeals of FCC orders that fall into any of ten enumerated categories. Judicial review of all other final FCC orders is governed by Section 402(a), 47 U.S.C. § 402(a), which provides for review through the widely applicable petition for review process prescribed in the Hobbs Act, 28 U.S.C. §§ 2341- 2351. See North Am. Catholic Educ. Programming Found., Inc. v. FCC, 437 F.3d 1206, 1208 (D.C. Cir. 2006). Because Sections 402(a) and (b) are mutually exclusive, if the Open Internet Order does not fall into one of the categories specified in Section 402(b), this Court could have jurisdiction only under Section 402(a), and Verizon’s notice of appeal under Section 402(b) must be dismissed. See Northpoint Tech., Ltd. v. FCC, 412 F.3d 145, 147 n.1 (D.C. Cir. 2005) (dismissing 402(b) appeal and accepting jurisdiction under 402(a) where cases had been filed under both statutes). 6 Verizon’s theory of jurisdiction is that the FCC modified its radio licenses within the meaning of Section 402(b)(5) because the Open Internet Order cited the agency’s authority under 47 U.S.C. § 316 to modify licenses, among numerous other statutory bases of authority. Notice of Appeal at 2. Section 402(b)(5), however, applies only when this Court is asked to review an FCC order that modifies specific individual licenses. It does not apply to review of generally applicable Commission orders that, like the Open Internet Order, regulate a broad group of licensees as a class. Jurisdiction over the Open Internet Order thus lies only under Section 402(a) and Verizon’s notice of appeal in Case 11-1355 should be dismissed for lack of jurisdiction. 1. Precedent Of This Court And Other Circuits Forecloses Verizon’s Reliance On Section 402(b). Precedent from this Court and other courts of appeals establishes that Section 402(b) does not apply to license modifications effectuated by generally applicable rulemaking orders. In particular, this Court held in Celtronix Telemetry, Inc. v. FCC, 272 F.3d 585 (D.C. Cir. 2001), that a generally applicable FCC rulemaking order that modified the terms of spectrum licenses – an order that would have fallen within Section 402(b)(5) if Verizon were right in this case – was properly reviewed under Section 402(a).
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