UPDATE: Why Tech Freedom Are Totally Wrong About The CRA.

Last week, I wrote this blog post addressing the argument that the Markey resolution under the Congressional Review Act would not actually restore the 2015 net neutrality rules. Since then, my opposite numbers at Tech Freedom have put together this 8-page letter saying otherwise. To save myself the trouble of repeating myself, I will update my previous blog post to explain why Tech Freedom specifically is utterly and completely wrong.

As I explained last time, the CRA defines a “rule” as meaning anything defined as a “rule” by 5 U.S.C. 551(4) (excluding agency actions relating to personnel or applying only to a single company, like a tariff filing). Or, in other words, anything generally subject to the Administrative Procedures Act (APA), regardless of what you call it, counts as a “rule” for CRA purposes.

 

Tech Freedom tries to get around this by mashing up two things that don’t really go together. First, Tech Freedom argues that to be a “rule” (rather than an “order”), the relevant item must have “future effect.” Lets accept this proposition for the sake of argument. How does this help Tech Freedom’s argument? After all, the classification clearly has future effect. It is a “legislative rule” that binds the public by defining how a class of service providers will be treated. See Perez v. Mortgage Bankers Association. Additionally, the FCC’s 2017 Network Neutrality Repeal Order repealed the existing net neutrality rules, repealed the transparency rule as it existed at the time, and created a new, weaker transparency rule. The Order then purported to preempt the states from adopting any net neutrality or network transparency rules of its own. These are all “rules” as defined by 5 U.S.C. 551(4), and therefore under the CRA pursuant to 5 U.S.C. 804.

 

Tech Freedom relies on Qwest Services Corp. v. FCC, which involved a distinction between rulemaking via adjudication (there, determining that the pre-paid calling card service in question was a Title II service and not a “Title I” information service) and an “informal” notice and comment rulemaking. In addition to having forward looking effect, adjudications are also applied retroactively (under the theory that they ‘announce’ what the law already said). By contrast, notice-and-comment rulemaking is strictly forward looking. The Qwest case dealt with the FCC’s decision to classify its declaratory ruling an adjudication but deciding against retroactive application of the result.

 

Tech Freedom attempt to read Qwest Services Corp. as meaning that all declaratory rulings are retroactive only, because they are “adjudications” and not “notice and comment.” Anyone taking Administrative Law 101 can tell you that this is wrong. Adjudications are one kind of rulemaking and “notice and comment” is another kind of rulemaking, but they are both rulemaking activities covered by the APA and therefore are “rules” for purposes of the Congressional Review Act. Even accepting Tech Freedom’s proposition that a purely retroactive rule is not reachable by the CRA, the fact that the declaratory ruling is adjudicatory in nature does not mean it is exclusively retroactive. It simply means that it could be applied retroactively, where such retroactive application does not work a “manifest injustice.” See Qwest Services Corp.

 

Another Reason: CRA Is A Statute.

 

My colleague John Bergmayer pointed out to me another reason why the argument that the CRA doesn’t apply here is silly, but it requires actually understanding what the CRA is and how it works. Congress can always pass a law overruling an agency decision. See Motor Vehicle Manufacturing Assoc. v. State Farm Insurance Co., 463 U.S. 29 (1983). Until passage of the Congressional Review Act in 1996, however, this required drafting a new law each time, and required moving through the rules of both Houses of Congress (which meant subject to a fillibuster). The CRA amended the rules of Congress to create a specific process for repealing agency action, and to tack on the additional restriction that any agency could not adopt a “substantially similar” law without express Congressional authorization. See 5 U.S.C. 802(g). But a Congressional Resolution of Disapproval is just a bill like any other bill, passed by both houses of Congress and signed by the President.

 

Here is the text of S. J. Res 52, the net neutrality CRA.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Federal Communications Commission relating to “Restoring Internet Freedom” (83 Fed. Reg. 7852 (February 22, 2018)), and such rule shall have no force or effect.

 

If that becomes law, it designates that the FCC “Restoring Internet Freedom” Order published at 83 Fed Reg. 7852 “shall have no force and effect.” This is exactly the same language used by Congress last year when it reversed the ISP privacy rules. As the FCC found when it implemented this language last year:

“The Commission published a summary of the 2016 Privacy Order in the Federal Register on December 2, 2016, and thereafter submitted it to Congress pursuant to the Congressional Review Act. On April 3, 2017, the President signed Pub. Law 115-22, 4 which provides that the rule submitted by the Commission “shall have no force or effect.” Because Pub. Law 115-22 was adopted pursuant to the Congressional Review Act, 5 U.S.C. § 801(f) provides that the 2016 Privacy Order “shall be treated as though [it] had never taken effect.” 5 As a result, the Commission rules implementing Section 222 at Part 64, Subpart U that were in effect prior to their amendment by the 2016 Privacy Order are again in effect, including the annual compliance certification requirements and recordkeeping requirements set out in Section 64.2009(e) and (c). Therefore, barring further action by the Commission, carriers subject to the annual compliance certification requirement must file such a certification no later than March 1, 2018.” (emphasis added)

 

So, to summarize, a “Congressional Resolution of Disapproval” is just a law like any other law. It designates a particular agency action that meets the definition of “rule” under 5 USC 551(4) “shall be treated as though [it] had never taken effect.” Which means that if Congress passes S. J. Res. 52, the “Restoring Internet Freedom Order” will be “treated as though it had never taken effect.”

 

Hopefully, this is clear enough for everybody now.

 

Stay tuned . . .

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