D.C. Circuit Should Overturn the FCC’s Net Neutrality Repeal with the Same Logic It Used in Recent Lifeline Case

The D.C. Circuit Court of Appeals recently issued a decision overturning a Federal Communications Commission (FCC) order that severely limited the Lifeline program on Tribal lands. The logic the court applied to the Tribal lands decision is similar to the logic that petitioners, including OTI, used in arguing against the FCC’s repeal of the 2015 net neutrality rules. The court should use the same logic as it did in the Lifeline case to overturn the net neutrality repeal.

The FCC’s Tribal Lifeline decision was unreasoned

The Lifeline program has been under attack, as we’ve discussed before. The FCC, in 2017, released a notice of proposed rulemaking (which now looms over Lifeline providers) to gut the program, the National Verifier rollout has been frustrated, and there have been significant questions around the updates to the minimum standards providers are required to offer recipients. However, the D.C. Circuit Court of Appeals recently ruled that at least one FCC rollback—undermining vital Lifeline services on Tribal lands—was unsupported by evidence, and thus, the court vacated the order.

The Lifeline program is designed to offset the cost of communications services for low-income individuals, making the services either more affordable or free to customers. Typically, an eligible individual signs up for Lifeline service offered by a specific provider, which then receives $9.25 per month for that customer from the universal service fund. However, Tribal lands are especially difficult to serve because of their low population density, so customers on Tribal lands are given an additional $25 per person. The Tribal Lifeline program is vital for Tribal customers to get online.

Over a year ago, the FCC proposed making several problematic changes to Lifeline, including removing standalone broadband as a supported service, and eliminating “wireless resellers,” which serve 70 percent of Lifeline subscribers and purchase wholesale communications access from larger companies, from the program altogether. At the same time, the FCC issued a decision (“Tribal Order”) that limited the Tribal Lifeline benefit only to (1) “facilities-based” providers (excluding wireless resellers), and (2) rural Tribal lands, excluding urban Tribal lands. The National Lifeline Association appealed the Tribal Order and, as discussed below, won.

The Tribal Order was essentially a death sentence to Tribal Lifeline service. Removing wireless resellers from the Tribal Lifeline program was bad policy that lacked support in the record. Tribal lands are notoriously difficult to serve with communications networks, and many Tribal lands lack robust internet and phone connections. But where they do have service, that service often comes from wireless resellers. Most “facilities-based” providers have shown little interest in providing Lifeline services at all. But smaller, wireless resellers have filled that gap in some areas. Removing resellers would make serving Tribal lands that much harder.

Limiting service to “rural” Tribal lands was also bad policy that lacked support in the record. There is no evidence that individuals in Tribal urban areas no longer need Lifeline support. The truth is very likely the opposite: that individuals in these areas continue to need Lifeline support. For example, Oklahoma is almost entirely considered a Tribal area, and it has one of the highest participation rates of any state. Tulsa, which is Oklahoma’s second-largest city with an estimated population of 401,800, is considered a Tribal urban area. If the Tribal Order had gone into effect, customers in Tulsa (and other large Tribal urban areas like Reno, NV) would lose their Lifeline benefit. Certainly individuals in Tribal urban areas continue to need the extra help to afford connecting to the network.

The D.C. Circuit in National Lifeline Association (NALA) v. FCC agreed. The court vacated the Tribal Order, characterizing the FCC’s decision as failing to provide a “reasoned explanation” supported by evidence in the record for changing its policy, and failing to consider the decision’s impact on Lifeline service access and affordability.

The court’s decision in NALA was a huge victory for the low-income population and particularly residents of Tribal lands. If wireless resellers were kicked out of the program, low-income Tribal residents relying on them would either lose access entirely (if there is no competitor in the market) or be forced to go through the onerous process of switching Lifeline providers. And if the Tribal benefit were limited to only rural areas, urban Tribal areas would have likely seen a decrease in connectivity.

The net neutrality repeal order was similarly ill-reasoned

The very same logic the court applied to overturn the Tribal Order in NALA applies to the lawsuit challenging the FCC’s net neutrality appeal (Mozilla v. FCC) as well. In 2015, the FCC passed robust net neutrality protections, which the D.C. Circuit upheld twice. But in 2017, the FCC repealed those protections in its “Restoring Internet Freedom Order” (RIFO), leaving only the insufficient transparency rule. The RIFO was as flimsy, if not more so, than the Tribal Order.

Petitioners, including OTI, argued among many things that the RIFO was unsupported by evidence, and also that the FCC misinterpreted the law and evidence it relied on. First, the FCC failed to consider 47,000 consumer complaints filed under the prior net neutrality rules, which could have helped reveal how consumers view broadband service and the harms broadband providers cause. The FCC assumed many conclusions about consumer viewpoints and what is best for consumers without releasing those complaints or allowing the public to review them fully before the final order was released.

Second, the FCC also claimed that network management transparency requirements, plus competition, would be sufficient to protect consumers. But the Commission failed to adequately explain how that would be the case when the record showed nearly 50 percent of the American public had one or no option for high-speed broadband providers.

Third, the FCC relied very heavily on other statutes to justify repealing the pro-consumer net neutrality rules. Specifically, the FCC cited Section 5 of the FTC Act and antitrust law in general as sufficient to protect net neutrality. Yet, the FCC conducted little analysis as to why and how those laws are sufficient. On the contrary, any analysis likely would have showed the inadequacy of those other statutes in protecting consumers against harmful broadband provider behavior. In particular, these other authorities cover only (1) lying (in the case of the FTC Act) and (2) anticompetitive acts (in the case of antitrust), neither of which covers the full gamut of harms that the net neutrality rules would have prevented.

Thus, much like how the FCC failed to consider the evidence (or lack thereof) for their decision to limit the Tribal Lifeline benefit, the FCC also failed to consider the evidence (or lack thereof) of repealing the net neutrality rules. Much like the court did in NALA, it should tell the FCC that the RIFO was unreasoned and vacate the order.