USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 1 of 221 No. 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 and UNITED STATES OF AMERICA, Respondents. ______________________________________________________ ON PETITIONS FOR REVIEW OF AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION PETITION FOR REHEARING AND REHEARING EN BANC ANDREW G. MCBRIDE BRETT A. SHUMATE EVE KLINDERA REED WILEY REIN LLP 1776 K Street, N.W. Washington, D.C. 20006 (202) 719-7000 Dated: July 29, 2016 Counsel for Alamo Broadband Inc. USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 2 of 221 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ................................................................................... ii GLOSSARY ............................................................................................................ iv INTRODUCTION AND FED. R. APP. 35(B)(1) STATEMENT ...........................1 BACKGROUND ......................................................................................................2 ARGUMENT ............................................................................................................4 I. THE PANEL ERRED BY CONCLUDING THAT THE FIRST AMENDMENT DOES NOT LIMIT THE FCC’S AUTHORITY TO REGULATE THE INTERNET. .....................................................................4 II. THE PANEL ERRED BY CONCLUDING THAT SECTION 706 AUTHORIZES COMMON CARRIAGE REGULATION OF THE INTERNET. ..................................................................................................12 CONCLUSION .......................................................................................................15 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE ADDENDUM 1 – PANEL OPINION ADDENDUM 2 – CERTIFICATE OF PARTIES AND AMICI ADDENDUM 3 - CORPORATE DISCLOSURE STATEMENT i USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 3 of 221 TABLE OF AUTHORITIES Page(s) CASES Brown v. Entm’t Merchs. Ass’n, 131 S. Ct. 2729 (2011) .......................................................................................... 8 Buckley v. Valeo, 424 U.S. 1 (1976) .................................................................................................. 7 Cablevision Sys. Corp. v. FCC, 597 F.3d 1306 (D.C. Cir. 2010) .............................................................. 5, 7, 9, 10 Citizens United v. FEC, 558 U.S. 310 (2010) .............................................................................................. 9 City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750 (1988) ............................................................................................ 12 Comcast Cablevision v. Broward Cnty., 124 F. Supp. 2d 685 (S.D. Fla. 2000) ................................................................. 10 Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Construction Trades Council, 485 U.S. 568 (1988) ............................................................................................ 14 FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) ...................................................................................... 13, 14 Ill. Bell Tel. Co. v. Village of Itasca, 503 F. Supp. 2d 928 (N.D. Ill. 2007) .................................................................. 10 Ex Parte Jackson, 96 U.S. 727 (1877) ........................................................................................ 10, 11 Lovell v. City of Griffin, 303 U.S. 444 (1938) ............................................................................................ 10 Loving v. IRS, 742 F.3d 1013 (D.C. Cir. 2014) .......................................................................... 13 * Authorities upon which we chiefly rely are marked with asterisks ii USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 4 of 221 Midwest Video Corp. v. FCC, 571 F.2d 1025 (8th Cir. 1978) .............................................................................. 8 NAACP v. Button, 371 U.S. 415 (1963) .............................................................................................. 8 NCTA v. Brand X Internet Servs., 545 U.S. 967 (2005) .............................................................................................. 8 Reno v. ACLU, 521 U.S. 844 (1997) ........................................................................................ 9, 11 *Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (1994) ........................................................................................ 4, 10 *Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) .................................. 2, 3, 4, 5, 7, 8, 9, 13, 14, 15 STATUTES 47 U.S.C. § 230(c)(2)(A) ........................................................................................... 6 47 U.S.C. § 1302 ........................................................................................................ 3 OTHER AUTHORITIES Christopher S. Yoo, Free Speech and the Myth of the Internet as an Unintermediated Experience, 78 Geo. Wash. L. Rev. 697 (2010) ............. 6, 7, 12 Christopher S. Yoo, Wickard for the Internet? Network Neutrality After Verizon v. FCC, 66 Fed. Comm. L.J. 415 (2014) ................................................................ 15 City of Wilson, North Carolina Petition for Preemption, 30 F.C.C.R. 2408 (2015)..................................................................................... 14 Connect America Fund, 26 F.C.C.R. 17663 (2011)................................................................................... 14 Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, 31 F.C.C.R. 2500 (2016)..................................................................................... 14 iii USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 5 of 221 GLOSSARY FCC Federal Communications Commission FTC Federal Trade Commission ISP Internet Service Provider JA Joint Appendix Op. Opinion iv USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 6 of 221 INTRODUCTION AND FED. R. APP. 35(B)(1) STATEMENT The Panel opinion sustaining the Federal Communications Commission’s (“FCC”) open internet rules addressed two questions of exceptional importance.1 First, the Panel concluded that the First Amendment does not limit the FCC’s authority to regulate the internet. It found the rules raise no First Amendment issue because the FCC declared broadband providers to be—and compelled them to act as—common carriers. The Panel erred because the rules strip broadband providers of their First Amendment right to exercise discretion about whether and how to carry internet traffic over their networks. Correctly resolving this question is exceptionally important because every other medium of mass communication— from the printing press to cable television—is entitled to First Amendment protection. The Panel’s rationale would allow the government to not only order the blocking of internet content it deems objectionable, but could also be used to try to strip other media—cable operators, broadcasters, and new media conduits— of First Amendment protection by declaring them to be common carriers. Second, the Panel decided that section 706 of the Telecommunications Act of 1996 affords the FCC “‘virtually unlimited power to regulate the Internet.’” 1 Although the Panel addressed many important issues, Alamo petitions for rehearing of only those portions of the opinion addressing the First Amendment and section 706 challenges to the open internet rules. Op. 94-97, 106-115. These two questions independently merit rehearing regardless of whether the Court agrees to rehear other aspects of the case. 1 USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 7 of 221 Concurring & Dissenting Op. 52 (quoting Verizon v. FCC, 740 F.3d 623, 662 (D.C. Cir. 2014) (Silberman, J.))). The Panel erred because section 706 is a policy statement that delegates no independent regulatory authority to the FCC. At a minimum, section 706 cannot reasonably be interpreted as authorizing common carriage regulation of the internet without a finding that broadband providers possess market power. Id. at 58-59. The correct interpretation of section 706 is exceptionally important because the FCC now has “carte blanche to issue any regulation that the Commission might believe to be in the public interest.” Verizon, 740 F.3d at 662 (Silberman, J.)). BACKGROUND In response to this Court’s decision in Verizon, the FCC took two independent but related actions. First, the FCC adopted open internet rules that require broadband providers to carry all lawful internet traffic and prohibit favoring some traffic over other traffic. Second, the FCC reclassified broadband service as a telecommunications service subject to common carrier regulation under Title II of the Communications Act. Op. 20-21. The Panel denied Alamo Broadband’s petition for review of the open internet rules.2 First, the Panel held that the rules do not violate the First 2 Alamo did not challenge the FCC’s reclassification ruling. Alamo argued that the Court should vacate the open internet rules regardless of how the Court resolves the other parties’ challenges to the reclassification ruling. 2 USCA Case #15-1063 Document #1627605 Filed: 07/29/2016 Page 8 of 221 Amendment.