Clarence Thomas Regrets Brand X Decision That Paved Way For The Net Neutrality Wars

from the a-little-late dept

In its 2005 Brand X decision, the courts changed US telecom oversight forever. You might recall that in the early aughts, former FCC boss Michael Powell (now the top lobbyist for the cable industry) engaged in wholesale deregulation of the broadband sector, insisting it would usher forth all manner of intense competition. Powell had claimed at the time that a new technology known as broadband over powerline (BPL) would come in as a layer of added competition, justifying his decision to free the sector from regulatory oversight. Due to interference issues, BPL never worked out, and you may have noticed that Powell's promised deregulation-triggered wave of competition never happened.

Powell's decision effectively involved classifying cable providers as an "information service" instead of a "telecommunications service," thereby freeing it from significant oversight under Title II of the Communications Act. In telecom, this mindless deregulation is always delivered alongside promises of intense new competition (see net neutrality). But with the broadband industry, a sector dominated by a handful of powerful "too big to fail" monopolies all but fused to the NSA, it never quite works that way. With neither competition nor oversight to keep them in line, regional monopolies like Comcast and AT&T usually just double down on anti-competitive behavior. It's a lesson we refuse to learn.

Regardless, Powell's decision triggered a massive legal fight that began when a company named Brand X Internet sued, because the regulatory shift blocked it from accessing the networks of incumbent cable providers. The battle reached all the way to the Supreme Court, who in a 6-3 decision supported Powell's deregulation of the cable sector.

But the ruling had a catch: it didn't lock cable into being classified as an "information service" permanently. It allowed the FCC to shift the definition back and forth, just as long as it provided some fairly basic justification for the move. It's a major reason FCC policy has shifted so sharply back and forth as partisans have jerked the reins from "yes, we'd like some modest oversight of telecom" to "letting the industry do whatever it wants results in Utopia" policy patty cake.

This week Supreme Court Justice Clarence Thomas issued a dissent in an unrelated case (pdf, hat tip Ars Technica) in which he suggested some regret for his original "Brand X" ruling:

""Regrettably, Brand X has taken this Court to the precipice of administrative absolutism," Thomas wrote. "Under its rule of deference, agencies are free to invent new (purported) interpretations of statutes and then require courts to reject their own prior interpretations."

That's of course what happened with net neutrality, with the 2015 FCC passing some modest net neutrality rules, and the 2017 Ajit Pai FCC then scuttling them on behalf of industry. So instead of a set of consistent rules, we get whiplash. Thomas continued:

"Although I authored Brand X, "it is never too late to 'surrende[r] former views to a better considered position.'" Brand X appears to be inconsistent with the Constitution, the Administrative Procedure Act (APA), and traditional tools of statutory interpretation. Because I would revisit Brand X, I respectfully dissent from the denial of certiorari."

Ideally, you'd want federal lawmakers to pass legislation that enshrines some basic net neutrality consumer protections into law. But because Congress has been wholly corrupted by telecom industry campaign cash, that's simply not happening without a major shakeup in the Senate. So while it's nice Thomas may have seen the error of his ways fifteen years on, the epiphany comes far too late to be of actual help to US consumers or the uncompetitive broadband markets Powell's original ruling helped cement.

Meanwhile Michael Powell, who started this entire mess on behalf of the cable sector, is now the top lobbyist for the NCTA, the cable industry's biggest lobbying and policy organization. The last two years he's been advocating for massive new regulation of Silicon Valley and virtually no oversight whatsoever for telecom. It's gambit that's paying off handsomely so far, thanks to myopic lawmakers who haven't yet figured out that the problems with "big tech" and "big telecom" are in many ways one and the same. And in some ways (thanks in large part to natural monopolies fused to the NSA) the problems with telecom are worse.

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Filed Under: brandx, clarence thomas, classification, fcc, internet services, supreme court