Case Summary and Outcome

The United States Court of Appeals for the Sixth Circuit reviewed the Federal Communications Commission’s (FCC) 2024 Safeguarding and Securing the Open Internet Order, which reclassified broadband internet services as “telecommunications services” under Title II of the Communications Act, imposing net neutrality requirements. The Court examined whether broadband services qualified as “telecommunications services” or “information services” and whether mobile broadband could be classified as a “commercial mobile service” under Title III. Drawing on statutory interpretation, legislative intent, and precedents like National Cable & Telecommunications Association v. Brand X and Loper Bright Enterprises v. Raimondo, the Court held that broadband services fell under the “information services” category and that mobile broadband was not interconnected with the public switched network. The Court criticized the FCC’s inconsistent regulatory shifts, found the order exceeded the FCC’s statutory authority, and deemed it arbitrary and capricious under the Administrative Procedure Act. It granted the petitions for review, setting aside the FCC’s order, and emphasized that significant regulatory changes require explicit congressional authorization.

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Facts

In 1996, amid a revolution in communications technology, the U.S. Congress overhauled and updated the Communications Act of 1934 by enacting the Telecommunications Act of 1996. In doing so, it established a comprehensive “procompetitive, de-regulatory national policy framework” for telecommunications services. The Act distinguished between two different categories of communications services, i.e., Title II “telecommunications services” and Title I “information services”—wherein an “information service” manipulates data, while a “telecommunications service” does not. The Communications Act created the Federal Communications Commission (FCC/Commission) to oversee and regulate these industries. Among all the regulations, the FCC also regulated whether broadband should be regulated as a telecommunications service or an information service. Generally, the Act favored light regulation under Title I, unless a provider qualified as a “common carrier” under Title II.

After the decision in National Cable & Telecommunications Ass’n v. Brand X Internet Services (2005), the FCC introduced and adopted the Internet Policy Statement which established four fundamental principles: consumers’ rights to access lawful internet content, use services of their choice, connect legal devices, and enjoy competition among providers. This statement became the foundation for future Open Internet rules. A significant challenge to these principles emerged in 2008 when the FCC discovered Comcast was secretly interfering with its subscribers’ use of peer-to-peer file-sharing applications. This interference was particularly problematic for two reasons: First, it violated the subscribers’ fundamental right to use lawful applications and services; second, and more significantly, evidence showed these applications had become a competitive threat to Comcast’s traditional business model, as they enabled consumers to access high-quality video content they might otherwise watch (and pay for) on cable television. The FCC determined that Comcast’s actions deprived consumers of marketplace competition benefits and “squelched the dynamic benefits of an open and accessible Internet.” The Commission ordered Comcast to cease these practices and submit a compliance plan.

Comcast challenged the FCC’s order before the United States Court of Appeals, District of Columbia Circuit (District of Columbia Circuit), which ultimately vacated it. The District of Columbia Circuit ruled that the FCC couldn’t rely on its Title I “ancillary authority” without properly identifying specific statutory authority covering Comcast’s practices. While the court acknowledged that Section 706 of the 1996 Act could potentially provide such authority, it noted the FCC would first need to overturn its own precedent regarding that section’s interpretation.

In response to the Comcast decision, the FCC issued the 2010 Open Internet Order. This order established three key rules: a “no blocking” rule preventing providers from blocking lawful content, a “no unreasonable discrimination” rule for fixed broadband providers, and a “transparency rule” requiring disclosure of network management practices. Verizon challenged the 2010 Order in the District of Columbia Circuit, resulting in a significant but mixed ruling. The District of Columbia Circuit upheld several key FCC findings, including that broadband providers have both the technical ability and economic incentives to discriminate against edge providers. It also agreed that Section 706 gave the FCC authority to adopt regulations. However, the court partially vacated the order arguing that the Commission couldn’t impose common-carrier obligations while classifying broadband as an “information service” rather than a “telecommunications service.”

Following the Verizon decision, the FCC issued the 2015 Open Internet Order—which made a crucial change in the classification by determining that retail broadband internet access service should be treated as a “telecommunications service” subject to Title II. This order implemented stronger regulations, such as prohibitions on blocking, throttling, and paid prioritization of internet traffic. The District of Columbia Circuit upheld this order in full, and the Supreme Court ultimately declined to review it. 

A major shift occurred in 2018 when, following a change in administration, the FCC reversed course. The Commission repealed the Open Internet rules (except for parts of the transparency rule) and reverted broadband to a Title I information service. This decision faced multiple legal challenges, which were consolidated in the District of Columbia Circuit. In Mozilla Corp. v. FCC (2019), the court largely found that the FCC had sufficiently justified its reclassification and repeal of prior rules; nonetheless, it identified three significant flaws in the agency’s 2018 Order: failure to consider public safety implications, inadequate analysis of the impact on pole attachment regulation, and neglect of concerns regarding broadband’s inclusion in the Lifeline program for low-income households. The court remanded these issues for further review without vacating the order.

The FCC attempted to address these issues with a Remand Order in October 2020, but this too was challenged. Finally, in the current Order—2024 Safeguarding and Securing the Open Internet—under review, the FCC once again reclassified broadband as a Title II telecommunications service and reinstated the 2015 Open Internet rules. The Commission justified this decision deeming it necessary to ensure internet openness, national security, cybersecurity, public safety, network reliability, consumer privacy, broadband access, and disability access. Currently, multiple petitions for review have been filed across several circuit courts, including the First, Fifth, Sixth, Eighth, Ninth, Eleventh, and District of Columbia Circuits. 

The FCC issued its Safeguarding and Securing the Open Internet Order in 2024. The order reclassified Broadband Internet Service Providers (BISPs) as offering “telecommunications services” under Title II of the Communications Act of 1934. This classification required BISPs to adhere to net neutrality principles, barring them from blocking, throttling, or prioritizing internet traffic based on content or commercial agreements. The FCC’s 2024 order reversed the prior approach adopted in 2018, during the Trump administration, which considered BISPs offered “information services” under Title I of the Act—exempting them from various regulatory obligations. This shift marked the latest in a series of policy reversals spanning multiple administrations, starting with the Obama administration’s 2015 Open Internet Order, which first classified BISPs as Title II entities.

Petitioners, including the Ohio Telecom Association and other broadband service providers, challenged the FCC’s 2024 Safeguarding Order.

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Decision Overview

Judge Richard Allen Griffin, Judge Raymond M. Kethledge, and Judge John K. Bush unanimously delivered the decision for the United States Court of Appeals for the Sixth Circuit. The central issue the Court analyzed was whether Broadband Internet Service Providers were properly classified as providers of “telecommunications services” under Title II or if they should be considered “information services” under Title I of the Communications Act. This distinction, the Court noted, determined the applicability of stringent common-carrier regulations to broadband providers, such as the net neutrality requirements introduced in the FCC’s 2024 Safeguarding and Securing the Open Internet Order. The Court highlighted that, given the FCC’s history of shifting interpretations over the years, it was imperative to resolve the statutory ambiguity by employing the traditional tools of statutory construction, as directed by Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024).

The petitioners, including the Ohio Telecom Association and other broadband service providers, argued that the FCC exceeded its statutory authority by reclassifying BISPs as offering “telecommunications services” under Title II of the Communications Act. They contended that the FCC’s Safeguarding and Securing the Open Internet Order of 2024 violated the plain language and intent of the Communications Act. According to the petitioners, broadband services fit squarely within the definition of “information services,” not “telecommunications services,” as defined by the Act. They asserted that the FCC’s own precedent supported their argument. Furthermore, the petitioners highlighted that for nearly two decades after the enactment of the Telecommunications Act of 1996, the FCC consistently classified broadband services as information services. This classification exempted BISPs from common-carrier regulations under Title II. They emphasized that broadband services inherently involve offering capabilities to process, retrieve, and manipulate data, which fall under the statutory definition of an information service. The petitioners argued that the FCC’s 2024 order ignored these longstanding principles and the Act’s historical context.

In addition to their statutory interpretation, the petitioners criticized the FCC’s regulatory inconsistency. They pointed out that the agency had repeatedly changed its stance on broadband classification with each administration, creating uncertainty for businesses and consumers alike. The petitioners maintained that such regulatory oscillation undermined public trust and market stability. They further argued that Congress, not the FCC, held the authority to make significant policy decisions affecting broadband regulation. By reclassifying broadband services under Title II without clear congressional authorization, the FCC had overstepped its bounds. The petitioners also challenged the FCC’s classification of mobile broadband as a “commercial mobile service” under Title III of the Communications Act. They argued that mobile broadband services did not meet the statutory requirement of being “interconnected with the public switched network,” as defined by the Act. According to the petitioners, the public switched network referred exclusively to the traditional 10-digit telephone system. They contended that the FCC’s attempt to expand this definition to include public Internet Protocol (IP) addresses was inconsistent with both the statutory language and the historical understanding of the term.

Moreover, the petitioners invoked the Supreme Court’s case law set in Loper Bright Enterprises v. Raimondo, which ended Chevron’s deference. They argued that under the new framework, courts must independently interpret statutes to determine the best reading, without deferring to agency interpretations. Applying this principle, the petitioners claimed that the plain meaning of the Communications Act supported their position that broadband services were information services. They maintained that the FCC’s current interpretation misread the statute and ignored its structural and historical context. The petitioners also contended that the FCC’s actions violated the Administrative Procedure Act (APA). To them, the Safeguarding Order was arbitrary and capricious, as the FCC failed to adequately justify its departure from prior rulings or provide a reasoned explanation for its new regulatory framework. They asserted that the order relied on the speculative benefits of net neutrality while ignoring the potential harms to innovation, investment, and competition in the broadband market.

The respondents, including the Federal Communications Commission and the United States of America, argued that the Safeguarding and Securing the Open Internet Order of 2024 was a lawful exercise of the FCC’s authority under the Communications Act. They maintained that broadband internet services qualified as “telecommunications services” under Title II of the Act because they primarily involved the transmission of information between users without altering its content. The FCC emphasized that this reclassification aligned with the statute’s text and the modern realities of how broadband services function. The agency asserted that broadband services had evolved significantly since the Telecommunications Act of 1996 was enacted, making prior classifications under Title I outdated. The respondents argued that BISPs now offered services indistinguishable from traditional telecommunications, such as basic data transmission—which lacked the added information-processing features characteristic of “information services.” The respondents pointed to the increasing reliance of consumers and businesses on broadband services for essential communications, asserting that this justified their treatment as a common carrier under Title II.

The FCC defended its authority to reclassify broadband services by highlighting Congress’ broad delegation of regulatory power under the Communications Act. It argued that the statute granted the FCC flexibility to adapt its regulatory framework in response to technological advancements and changing market conditions. The FCC referred to its role in protecting consumers and ensuring an open and accessible Internet as a compelling basis for reintroducing net neutrality rules. It contended that such rules were essential to prevent BISPs from engaging in discriminatory practices, such as throttling or prioritizing specific content for financial gain. 

Additionally, the respondents argued that the FCC’s decision to classify mobile broadband as a “commercial mobile service” was consistent with the Act’s provisions. They asserted that mobile broadband services effectively connected users to the public switched network through their integration with Voice over Internet Protocol (VoIP) technology. The FCC argued that this interpretation reflected the Act’s dynamic nature and Congress’ intent to provide the agency with the tools necessary to regulate emerging technologies. The respondents further noted that VoIP services allowed mobile broadband users to engage with traditional telecommunication networks, meeting the criteria for “interconnection” under the statute.

They also rejected the petitioners’ reliance on the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo. According to the respondents, even under the post-Chevron interpretative framework, the FCC’s classification of broadband services as telecommunications services represented the best reading of the statute. They emphasized that the FCC had thoroughly analyzed the statutory language, historical context, and contemporary market realities when crafting the Safeguarding Order. Finally, they argued that the order was neither arbitrary nor capricious, as it rested on a well-reasoned and evidence-based assessment of the need for net neutrality protections to preserve an open and fair internet for all users.

The Court began by examining the relevant statutory definitions under 47 U.S.C. § 153. There a “telecommunications service” is defined as the offering of telecommunications directly to the public for a fee, without altering the content of the transmitted information. Conversely, an “information service” offers capabilities for generating, acquiring, storing, transforming, processing, retrieving, or utilizing information via telecommunications. The Court underscored that these definitions clearly distinguished between services that purely transmitted data and those that offered consumers the ability to manipulate or process information.

The Court determined that BISPs fell squarely within the definition of “information services.” It emphasized that broadband providers did not merely transmit user data as a “dumb pipe” but instead offered capabilities such as DNS resolution and caching, which facilitated users’ access to and interaction with third-party content. Then the Court referred to National Cable & Telecommunications Association v. Brand X Internet Services (2005), in which the Supreme Court upheld the FCC’s earlier classification of broadband as an information service. While recognizing that Brand X relied on Chevron’s deference, the Court found its reasoning persuasive and consistent with the statutory text and legislative intent.

The Court further analyzed the broader legislative intent behind the Communications Act and the Telecommunications Act of 1996. It highlighted Congress’ policy, as articulated in 47 U.S.C. § 230(a)(4) and (b)(2), to promote a minimally regulated Internet ecosystem. For the Court, Congress deliberately crafted the definitions of “telecommunications service” and “information service” to ensure that advanced digital services, like broadband internet access, would not be subjected to onerous common-carrier regulations. It found the FCC’s repeated reclassifications of broadband services—often aligned with changes in political leadership—to be inconsistent with this legislative framework.

The Court pointed to the FCC’s historical practice, which, for nearly two decades after the enactment of the Telecommunications Act, consistently treated broadband as an information service. To underscore this argument, it cited cases such as In re Deployment of Wireline Services Offering Advanced Telecommunications Capability, 13 FCC Rcd. 24012 (1998), and In re Inquiry Concerning High-Speed Access to Internet Over Cable and Other Facilities, 17 FCC Rcd. 4798 (2002), where the FCC classified broadband as an information service, affirming its dual role in data transmission and content processing. The Court viewed these precedents as evidence of the FCC’s recognition of broadband’s complex functionality.

The Court next addressed the FCC’s classification of mobile broadband as a “commercial mobile service” under Title III. The FCC argued that mobile broadband was interconnected with the public switched network due to its integration with Voice over Internet Protocol (VoIP) services, which allowed users to interact with traditional telephone systems. The Court rejected this argument, finding that the public switched network, as defined by 47 U.S.C. § 332(d)(2), referred exclusively to the 10-digit North American Numbering Plan (NANP) used by traditional telephone networks.

The Court cited Mozilla Corp. v. FCC, 940 F.3d 1 (D.C. Cir. 2019), and U.S. Telecom Association v. FCC, 825 F.3d 674 (D.C. Cir. 2016), which had previously addressed similar arguments. However, it disagreed with the District of Columbia Circuit’s interpretation of Mozilla and Telecom, emphasizing that the statutory definition of the public switched network did not encompass IP-based services. To the Court, there was no statutory basis for the FCC’s attempt to expand this definition to include VoIP services or public IP addresses. It observed that mobile broadband services, by themselves, did not directly connect to the NANP and therefore could not be classified as a commercial mobile service.

The Court noted that Loper Bright Enterprises v. Raimondo (2024) fundamentally altered the framework for judicial review of agency actions by eliminating Chevron’s deference. It stated that, in the absence of statutory ambiguity resolved by deference to the FCC, it was the Court’s responsibility to independently interpret the Communications Act. Applying this rule, the Court concluded that the plain meaning of the statutory language supported the classification of broadband as an information service. The Court also considered the major questions doctrine, as outlined in West Virginia v. Environmental Protection Agency (2022). It found that the FCC’s expansive interpretation of its authority to impose net neutrality regulations on broadband providers raised significant economic and political concerns, requiring clear congressional authorization. The Court determined that the Communications Act did not provide such authorization and that the FCC’s reliance on general provisions within the Act was insufficient to justify its reclassification of broadband services.

The Court further criticized the FCC’s decision as arbitrary and capricious under the Administrative Procedure Act. It noted that the Safeguarding Order failed to adequately explain the agency’s departure from its previous findings in the 2018 Restoring Internet Freedom Order. The Court emphasized that the FCC did not provide substantial evidence to support its claim that reclassifying broadband as a telecommunications service was necessary to protect consumers or promote competition. Instead, the Court observed that the FCC relied on the speculative benefits of net neutrality while disregarding the potential harms to investment and innovation in the broadband market.

Ultimately, the Court granted the petitions for review requested by the plaintiffs and set aside the FCC’s 2024 Safeguarding and Securing the Open Internet Order. It held that the FCC lacked statutory authority to classify broadband as a telecommunications service under Title II or to regulate mobile broadband as a commercial mobile service under Title III. The Court underscored that significant regulatory changes in this domain required clear congressional action rather than administrative reinterpretation of existing statutes. The Court’s decision highlighted the need for regulatory stability and strict adherence to statutory limits, reaffirming Congress’ intent to foster innovation and competition in the Internet ecosystem without heavy-handed regulation.

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