Advocates ready legal showdown with FCC on net neutrality

WASHINGTON (Reuters) - Net neutrality advocates said they are gearing up for a legal fight after abandoning attempts to convince the U.S. Federal Communications Commission to keep 2015 rules aimed at maintaining an open internet.

The FCC is expected to vote on Dec. 14 to scrap the landmark so-called net neutrality rules championed by Democratic former President Barack Obama, given FCC Chairman Ajit Pai and two Republican commissioners support the repeal.

Advocates for the rules doubt the U.S. Congress will help prevent a repeal, leaving litigation as a last resort.

Industry and public interest groups are considering several strategies to protect the rules banning internet service providers (ISPs) from blocking or "throttling" to slow service for certain content, including arguing that the decision is arbitrary and pushing back on the FCC's classification of ISPs.

Under the proposal by Pai, a Republican appointed by U.S. President Donald Trump, the bulk of the job of protecting the web will be turned over to the U.S. Federal Trade Commission.

Pai has said lifting the net neutrality rules removes heavy-handed regulation. Big ISPs say the rules have restricted investment and innovation and could mean eventual regulations on internet pricing.

Critics of a repeal say they have a number of reasons to sue. Legal strategies could include arguing the reversal is arbitrary because it comes just two years after the Obama-era rules were put in place.

Opponents also say ISPs should continue to be treated as "pipes" that carry movies, videos and Facebook updates, and that the FCC is wrong to categorize them as content providers, which are more lightly regulated.

At least three public interest groups - Public Knowledge, Common Cause and Free Press - have said they are preparing to turn to litigation as a last resort.

The trade group Internet Association, whose members include content providers Alphabet Inc, Facebook Inc and Pandora Media Inc, said it was reviewing Pai's order "and weighing our legal options."

ARBITRARY AND CAPRICIOUS

The opponents say one potential legal argument is that the change is "arbitrary and capricious" since the FCC is reversing a rule it enacted just two years ago.

The FCC under Obama battled with the broadband industry in court after they objected to the 2015 rules. Former FCC Commissioner Michael Copps, a Democrat, said the FCC under Trump is doing an about-face by asking a court to ignore the 2015 rules.

"As an FCC lawyer, I would be kind of red-faced going to court and saying, 'You know what? We want to overturn that (the 2015 rules we just defended),'" said Copps. He is now a special advisor to Common Cause.

Matthew Brill, counsel for broadband providers in the NCTA – the Internet and Television Association, said the groups would be unable to show that the change was arbitrary.

"Courts have long made clear that their job isn't to second guess the agency but to make sure that the agency takes a hard look at the issue," said Brill.

DEFINITIONS AND DELAYS

Harold Feld, senior vice president of Public Knowledge, argues that Pai's plan to re-categorize ISPs from common carriers, essentially a public utility, to more lightly regulated "information services" will fail in court because the main role of ISPs is delivering content from Google, Netflix or other websites, not offering email or online storage.

"Their (FCC's) description of how the internet service provider works is .... not true," said Feld.

If the FCC says the companies provide a "telecommunications service," it can stop them from blocking access to or discriminating against certain websites, according to a court ruling over earlier FCC rules.

In fact, many of the issues in the 2017 rules were legally reviewed previously, or at least a mirror image of them.

The U.S. Court of Appeals for the D.C. Circuit in 2016 rejected arguments made by the broadband industry that the FCC's 2015 decision to redefine broadband as a telecommunications service was arbitrary and capricious.

But the court also noted that it deferred to the agency's judgment on whether to define broadband as an information service or a telecommunications service.

Public Knowledge and others argue that the FCC is incorrectly portraying its handoff of internet oversight to the FTC as a return to how things were done previously.

While it is true that the FTC has in the past acted to stop abuse by telecommunications providers, such as when it accused AT&T Mobility of slowing delivery of content to customers with unlimited data plans, net neutrality advocates argue the FCC has been considerably more active.

"They (the FCC) not only have the authority to do it (enforce internet rules) but they have the responsibility," said Matt Wood, policy director of Free Press.

One concern that Evan Engstrom, executive director of the startup advocacy group Engine, has is that Pai's proposal relies on punishing wrongdoers after the fact instead of preventing bad behavior. That could put startups at a disadvantage, because they do not have the resources to fight ISPs which decide to favor other content.

Engine, which put together two net neutrality letters signed by hundreds of internet firms ranging in size from Twitter Inc to unknowns, plans to support litigation opposed to Pai's changes.

(Reporting by Diane Bartz; Editing by Chris Sanders and Meredith Mazzilli)