Telecommunications Law and Policy in a Post-Chevron World

4 min

As summarized by our Government Division colleagues last week, the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo has overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., holding that deference to an agency's interpretation of a statute is contrary to the Administrative Procedure Act (APA) and the judiciary's responsibility to interpret statutes and decide questions of law. The decision will have ramifications for the Federal Communications Commission (FCC) and the telecommunications industry for years to come.

Chevron deference required a reviewing court to defer to an agency's interpretation of a statute if that interpretation is "permissible," a very pro-agency standard. The Court's repudiation of Chevron fundamentally changes that standard, placing a high burden on any agency writing new rules. Now, a reviewing court cannot ignore traditional methods of statutory interpretation in favor of determining whether the FCC's interpretation is "permissible." Nor will a reviewing court be able to just assume that statutory ambiguity was Congress's implicit delegation of authority or discretion to an agency.

The Loper opinion creates countless practical questions regarding how FCC actions will be scrutinized.

  • Litigation over FCC rulemaking will certainly increase exponentially. Between last year's adoption of "major questions" doctrine, Loper's shift of power to the courts to review agency action, and a new, almost unlimited statute of limitations to file APA cases, the odds of favorable outcomes for those opposing a new regulation have increased tremendously.
  • This term in Corner Post v. Board of Governors of the Federal Reserve System, the Court also clarified that the APA's six-year statute of limitations starts running when a party is injured—not when a rule is promulgated by an agency. This relaxed statute of limitations period, combined with Loper's more petitioner-friendly review standard, means that long-established FCC regulations may now also face the risk of being invalidated by fresh challenges.
  • Parties adversely affected by an FCC rule now have a much stronger incentive to seek court intervention. Under Chevron, adversely affected entities would frequently conclude that a court challenge was not worth the time or expense. That cost-benefit analysis has now changed, as the new Loper standard will mean the time and expense may be worth a challenge.
  • The FCC's role in writing and defending federal regulations has become substantially more difficult without the backstop of Chevron deference to the agency's interpretation of the communications statutes. The FCC will now have the burden of showing that new regulations are justified under the best reading of the relevant statute—not merely a "reasonable" reading of such statutes. New regulations will be more vulnerable to statutory-authority challenges under Loper's more petitioner-friendly standard of review.
  • Expect FCC implementing orders to become much denser when dealing with the Communications Act, for example, as the agency will need a complete record analyzing statutory text to build a formal interpretive record to fully defend itself in the courts.
  • Congress, and especially the committees with oversight over the FCC and the communications industries, will have to assume a higher burden of both updating current law and writing new laws that express congressional intent more clearly if it intends federal agencies to act. Should Congress truly intend for the FCC to have wide latitude to implement a statute, it will have to be extremely explicit that it is granting the agency that power.
  • FCC enforcement actions will likewise be affected, as aggressive statutory readings, when the FCC pursues penalties, forfeitures, or other remedies, will have to be defended without resort to deference on appeal.
  • Look for a marked increase in forum shopping among the circuit courts, as emboldened parties seek a forum predisposed to be skeptical of and harshly scrutinize aggressive FCC actions.
  • Between forum shopping and the unknown arising from a judiciary now more actively asserting itself in the interpretation of the Communications Act, it will take longer and be more difficult for parties to obtain regulatory certainty. After protracted rulemaking at the FCC, parties may now expect protracted litigation and the unpredictability of the reviewing court more often.

Notably, in response to the Loper decision, the Sixth Circuit of Appeals panel adjudicating industry challenge to the FCC's reinstatement of the net neutrality rules has asked the parties to file briefs analyzing how the Loper decision changes the litigation.

We also expect to see continued challenges to the agency's implementation of the Universal Service Fund. And beyond these highly politicized issues, there are many pending agency actions where the Commission's statutory authority is ambiguous at best—it will be ripe for appeal, including proceedings involving unlicensed spectrum and orbital debris mitigation requirements.

If you have questions about the implications of the Loper decision on your organization, please contact the authors.