Opinions Vary on Chances of Supreme Court Review of USF/ICC Case

Beyond the usual difficulty in getting the Supreme Court to take a case, petitions (see 1504080050) seeking review of the 2011 USF/intercarrier compensation order (see 1405270045) face some obstacles, former FCC Chairman Reed Hundt and other telecom attorneys told us. U.S. Cellular’s argument that the net neutrality order adds to the urgency to deal with the agency’s Telecommunications Act 706 authority through the Universal Service Fund/ICC case is unlikely to move justices, they said.

But NARUC General Counsel Brad Ramsay, who also filed for cert, remained optimistic the court will take up the case. While NARUC, U.S. Cellular and Cellular South, which filed a petition Thursday, are taking different tacks, all in some way allege the agency has overstepped its authority. The allegation may be serious enough for the court to want to take up the USF/ICC order, which required fund recipients to deploy broadband, some believe. Former FCC Commissioner Robert McDowell, now at Wiley Rein, and a critic of the net neutrality order’s Communications Act Title II approach, also told us the court should take up the review. He agreed with U.S. Cellular that the agency doesn't have authority under Section 706 to require the broadband deployment, despite the 10th U.S. Circuit Court of Appeals decision upholding the order. But he said "convincing the Supreme Court to review a lower court decision is always hard to achieve.” A threshold question remains of “whether the high Court will view the 10th Circuit case as the best vehicle to define what 706 actually means, or wait for the most recent open Internet order to come its way in a couple of years."

Meanwhile, Cellular South in its petition responded to the agency’s argument that the reclassification of broadband under Title II in the net neutrality order made moot whether the agency has Section 706 authority over broadband. Cellular South said the agency still can't impose the requirement to provide broadband because Congress requires the agency to work with the Federal-State Joint Board on Universal Service to decide what kinds of telecommunications services are eligible for USF. The agency hasn’t made a determination about broadband Internet service providers and “cannot directly order carriers to provide broadband Internet access service under the USF program,” Cellular South said. At the least, the court should require the agency to reconsider the USF/ICC order in light of the net neutrality order, the petition said.

U.S. Cellular counsels Russell Lukas and David LaFuria, of Lukas, Nace, didn’t comment, but their petition argued for Supreme Court review, saying that with “the issuance of the FCC’s Net Neutrality Order, [the USF/ICC case] has taken on added importance.”

Hundt, though, said the net neutrality order shouldn’t influence the court. Hurting the chances of review, he said, is that there's not conflict among circuits. Because the net neutrality order reclassified broadband under Title II, the agency’s Section 706 authority for the purposes of the net neutrality order “isn't important any more,” he said. “The next big court battle is over the NN order and SCOTUS will, one would think, wait for that to come up from the circuit court that gets the appeal from the FCC.”

“U.S. Cellular attempts to make lemonade from the lemons by using the pendency of net neutrality litigation to argue that this is the rare case where it is so important that the Supreme Court should not await a conflict among the Circuits, but it doesn't show that this case is different from the many other significant regulatory issues that do not receive Supreme Court review,” said Andrew Schwartzman, senior counselor at Georgetown University's Institute for Public Representation. The Supreme Court “strongly prefers live controversies, and as the government pointed out, broadband reclassification has effectively mooted the issue. It will now arise if and only if the reclassification issue is reversed,” he said. He also said the Section 706 dispute in the USF/ICC case would not jeopardize the net neutrality order. “Section 706 was an alternative source of authority” for the net neutrality order, after Title II, he said.

Free State Foundation President Randolph May said Section 706 “has to do fundamentally with the deployment of broadband.” Reading it “as a grant of authority to support the collection and expenditure of USF funds for broadband infrastructure is more likely to be valid than reading it as a grant of authority to impose net neutrality mandates under a theory of the virtuous cycle."

Nevertheless, U.S. Cellular argues that Congress “expressly limited the FCC’s rulemaking authority to adopting rules necessary to implement” the Communications Act” and that Section 706 “is not among the provisions it is authorized to administer through rulemaking and adjudication." The agency “exceeded the bounds of its statutory authority” when it imposed the broadband deployment requirements under Section 706, the petition said.

Ramsay, speaking for himself, said he’s a proponent of the Title II approach and thinks the order can be upheld, but stripping one of the underpinnings of the net neutrality order would weaken its legal foundation. Ramsay’s petition challenges the USF/ICC order arguing the 10th Circuit allowed the agency too much Chevron deference and allowed the agency to overstep its bounds. While the court grants few petitions, “a critical mass” of issues raised about the agency’s authority by multiple petitions could help petitioners clear a first hurdle and get justices to review the petitions themselves. "If that happens, we have a shot," he said. The petitioners could get an indication of whether the court will take it up within a month, he said.

TechFreedom President Berin Szoka said the 10th Circuit in the USF/ICC case and the D.C. Circuit in reviewing the 2010 Open Internet order “both got it wrong: Section 706 isn’t an independent grant of authority to do whatever the FCC asserts will promote broadband,” he emailed. Still, he doubted the Supreme Court will take up the USF/ICC petitions. “Not because US Cellular doesn’t make a compelling argument,” he said, “but simply because [the court] very rarely grants cert without a conflict between circuit courts.” The 10th Circuit decision also didn't rest on Section 706 but on Section 254, which governs USF. Should reclassification stand, “Section 254 clearly gives the FCC [authority over] spending USF moneys on telecom services, which now includes broadband,” Szoka said.