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FCC ability to regulate uncertain after SCOTUS nullifies “Chevron doctrine”

The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)
The front of the Federal Communications Commission building in Washington, D.C. (FCC public domain image)

The ability of the Federal Communications Commission (FCC) to regulate matters concerning broadcast television, wireless phone service, the Internet and other conveniences of modern life hangs in the balance after the U.S. Supreme Court overturned a ruling that federal agencies used to limit judicial challenges of its power.

On Friday, the Supreme Court found that the 1984 court case Chevron v. Natural Resources Defense Council improperly allowed federal agencies to craft new regulations by interpreting certain laws as they see fit.

The case, known as the “Chevron doctrine,” has been used by federal regulators like the FCC as an affirmative defense when facing legal challenges brought over new regulations. In a 6-3 decision that was made along political lines, the Supreme Court said the case amounted to “a judicial intervention that required judges to disregard their statutory duties.”

In the majority opinion issued on Friday, Chief Justice John Roberts affirmed that the overturning of the Chevron doctrine was based on a “change in interpretive methodology,” but said the decision this week would not be retroactive to cases in which regulators raised the Chevron doctrine as a defense.

Still, the decision opens the door for future legal challenges whenever an agency like the FCC proposes or enacts a new regulation that is based on an interpretation of existing law.

Proponents of smaller government are already praising the decision as a victory for looser regulations, particularly in the commercial sector.

“The Supreme Court’s opinion brings the administrative state into harmony with the U.S. Constitution,” said Grant Spellmeyer, the CEO of ACA Connects, which represents cable TV and broadband Internet providers. “Federal agencies can no longer treat statutes as mere ’starting points’ for the adoption of policies that align with their own whims and political preferences. Rather, they must follow Congress’s commands to the letter.”

The issue with that take is that Congress, often, will pass a law that is deliberately open-ended. The intent is with the idea in mind that things change, and that regulators are in the best position to create or modify rules through their interpretation of open-ended laws, so that the rules keep up with the times.

In the broadcast and cable TV industry, few believe the FCC has done a good job in this respect. Over the past few years, the commercial TV industry has criticized the FCC for dragging its feet on quadrennial reviews of its rules and regulations — which Congress mandated — and on other matters like broadcast ownership caps and whether they can force streaming TV providers to pay retransmission consent fees for local broadcast channels in the same realm as traditional cable and satellite TV platforms.

Some, including ACA Connects, have also charged the FCC with exceeding its authority with respect to regulating the Internet by proposing or imposing rules on what broadband providers can or cannot do. Last November, the agency passed a rule that was aimed at preventing “digital discrimination of access to broadband services based on income level, race, ethnicity, color, religion or national origin.” The rule was meant to prevent broadband Internet providers from prioritizing the build-out of their networks in affluent communities over others, but broadband providers saw this as the FCC overstepping its bound by enacting a solution in search of a problem.

Now, ACA Connects says the FCC’s Digital Discrimination and Open Internet orders, which “might have received deference in the past,” will “now get the scrutiny they deserve,” suggesting that the organization and others are ready to bring the matter to court.

“This is a game-changer for smaller players such as ACA Connects Member companies, who depend on regulatory actions that comply with the statute to provide the certainty and stability to justify long-term investment in their businesses,” Spellmeyer said. “For too long, they have been subject to wild fluctuations in the regulatory environment that further political ends regardless of the law. This decision puts legislative power back where it belongs: in the hands of Congress. We look forward to working with Congress to address the pressing challenges our Members and their communities face, and to working with the FCC and other Federal agencies to implement the laws that Congress enacts.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 11 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.