United States Court of Appeals, District of Columbia Circuit
February 1, 2019
Petitions for Review of an Order of the Federal
Pantelis Michalopoulos and Kevin Kendrick Russell argued the
causes for non-government petitioners. With them on the joint
briefs were Cynthia L. Taub, Markham C. Erickson, Michael A.
Cheah, Brian M. Willen, Donald J. Evans, Sarah J. Morris,
Matthew F. Wood, Colleen Boothby, James N. Horwood, Tillman
L. Lay, Jeffrey M. Bayne, Katherine J. O=Konski, Andrew J.
Schwartzman, Harold J. Feld, and Lisa A. Hayes. Keenan P.
Adamchak and Kevin S. Bankston, entered appearances.
Stephanie Weiner argued the cause for intervenors Internet
Association et al. et al. in support of petitioners. With her
on the briefs were Christopher J. Wright, Scott Blake Harris,
E. Austin Bonner, Matt Schruers, John A. Howes, Jr., and
Anthony R. Segall. Maria K. Myers entered an appearance.
Danielle L. Goldstein and Steven C. Wu, Deputy Solicitor
General, Office of the Attorney General for the State of New
York, argued the causes for government petitioners. With them
on the briefs were Barbara D. Underwood, Attorney General at
the time the brief was filed, Office of the Attorney General
for the State of New York, Arocles Aguilar, Helen M.
Mickiewicz, Lisa-Marie G. Clark, Kimberly Lippi, Ester
Murdukhayeva, Assistant Solicitor General, Office of the
Attorney General for the State of New York, Greta Hansen,
Xavier Becerra, Attorney General, Office of the Attorney
General for the State of California, Sarah E. Kurtz, Deputy
Attorney General, Nicklas A. Akers, Senior Assistant Attorney
General, George Jepsen, Attorney General, Office of the
Attorney General for the State of Connecticut, Jonathan J.
Blake, Assistant Attorney General, Jeffrey T. Pearlman,
Phillip R. Malone, Matthew P. Denn, Attorney General, Office
of the Attorney General for the State of Delaware, Christian
D. Wright, Director, Consumer Protection, Thomas J. Miller,
Attorney General, Office of the Attorney General for the
State of Iowa, Benjamin E. Bellus, Assistant Attorney
General, Russell A. Suzuki, Attorney General at the time the
brief was filed, Office of the Attorney General for the State
of Hawaii, Clyde J. Wadsworth, Solicitor General, Lisa
Madigan, Attorney General, Office of the Attorney General for
the State of Illinois, David Franklin, Solicitor General,
Andrew G. Beshear, Attorney General, Office of the Attorney
General for the Commonwealth of Kentucky, Maura Healey,
Attorney General, Office of the Attorney General for the
Commonwealth of Massachusetts, Jared Rinehimer, Assistant
Attorney General, Janet T. Mills, Attorney General at the
time the brief was filed, Office of the Attorney General for
the State of Maine, Brendan O=Neil, Assistant Attorney
General, Brian E. Frosh, Attorney General, Office of the
Attorney General for the State of Maryland, Richard L.
Trumka, Jr., Assistant Attorney General, Lori Swanson,
Attorney General, Office of the Attorney General for the
State of Minnesota, Joseph C. Meyer, Assistant Attorney
General, Hector Balderas, Attorney General, Office of the
Attorney General for the State of New Mexico, Tania Maestas,
Deputy Attorney General, James M. Hood, Attorney General,
Office of the Attorney General for the State of Mississippi,
Crystal Utley Secoy, Special Assistant Attorney, Gurbir S.
Grewal, Attorney General, Office of the Attorney General for
the State of New Jersey, Jeremy M. Feigenbaum, Assistant
Attorney General, Joshua H. Stein, Attorney General, Office
of the Attorney General for the State of North Carolina,
Kevin Anderson, Senior Deputy Attorney General, Peter
Kilmartin, Attorney General, Office of the Attorney General
for the State of Rhode Island, Michael W. Field, Assistant
Attorney General, Ellen F. Rosenblum, Attorney General,
Office of the Attorney General for the State of Oregon,
Andrew Shull, Senior Assistant Attorney General, Josh
Shapiro, Attorney General, Office of the Attorney General for
the Commonwealth of Pennsylvania, Michael J. Fischer, Chief
Deputy Attorney General, Thomas J. Donovan, Jr., Attorney
General, Office of the Attorney General for the State of
Vermont, Christopher J. Curtis, Chief, Public Protection
Division, Karl A. Racine, Attorney General, Office of the
Attorney General for the District of Columbia, Loren L.
AliKhan, Solicitor General, Mark R. Herring, Attorney
General, Office of the Attorney General for the Commonwealth
of Virginia, Samuel T. Towell, Deputy Attorney General,
Robert W. Ferguson, Attorney General, Office of the Attorney
General for the State of Washington, Tiffany Lee, Assistant
Attorney General, Dennis J. Herrera, and William K. Sanders.
Bryan C. Yee, Deputy Attorney General, Office of the Attorney
General for the State of Hawai=i, Sarah E. Kurtz, Deputy
Attorney General, Office of the Attorney General for the
State of California, Michael C. Wertheimer, Assistant
Attorney General, and John S. Story, Attorney, Office of the
Attorney General for the State of Connecticut, Theresa C.
Mueller, Jennifer M. Murphy, and James B. Ramsey, entered
Christopher Jon Sprigman was on the brief for amici curiae
Members of Congress in support of petitioners.
Mitchell Stoltz and Corynne McSherry were on the brief for
amicus curiae Electronic Frontier Foundation in support of
Christopher T. Bavitz was on the brief for amicus curiae
Engine Advocacy in support of petitioners.
MacKenzie Fillow, Edward N. Siskel, Michael P. May, and Karen
L. Moynahan were on the brief for amici curiae The City of
New York and 27 other local governments, mayors and municipal
organizations in support of petitioners.
S. Hammond, IV was on the brief for amici curiae Professors
of Administrative, Communications, Energy, Antitrust, and
Contract Law and Policy in support of petitioners.
Jessica L. Ellsworth and Matthew Higgins were on the brief
for amici curaie The American Council on Education and 19
other education and library associations in support of
Goldberg and Devendra T. Kumar were on the brief for amicus
curiae eBay Inc. in support of petitioners.
Adrienne E. Fowler was on the brief for amicus curiae Twilio
Inc. in support of petitioner.
Jay Schwartzman and James T. Graves were on the brief for
amicus curiae Consumer Reports in support of petitioners.
H. Vidal was on the brief for amici curiae Professors Scott
Jordan and Jon Peha in support of petitioners.
Michael J. Burstein was on the brief for amici curiae
Professors of Communications Law in support of petitioners.
Goodman and Yosef Getachew were on the brief for amici curiae
Common Cause, et al. in support of petitioners and vacation
of the order.
William Michael Cunningham, pro se, was on the brief for
amicus curiae William Michael Cunningham in support of the
M. Johnson Jr, General Counsel, Federal Communications
Commission, argued the cause for respondents. With him on the
brief were Kristen C. Limarzi and Nickolai G. Levin,
Attorneys, U.S. Department of Justice, David M. Gossett,
Deputy General Counsel, Federal Communications Commission,
Jacob M. Lewis, Associate General Counsel, and James M. Carr
and Scott M. Noveck, Counsel. Robert J. Wiggers, Attorney,
U.S. Department of Justice, and Richard K. Welch, Deputy
Associate Counsel, Federal Communications Commission, entered
Jonathan E. Nuechterlein argued the cause for ISP
intervenors. On the brief were Michael K. Kellogg, Scott H.
Angstreich, Helgi C. Walker, Andrew G.I. Kilberg, Miguel A.
Estrada, Matthew A. Brill, Matthew T. Murchison, Jeffrey A.
Lamken, and Stephen E. Coran. C. Frederick Beckner, III, Rick
Chessen, Kellam M. Conover, Neal M. Goldberg, Theodore B.
Olson, and Michael S. Schooler entered appearances.
Paxton, Attorney General, Office of the Attorney General for
the State of Texas, Kyle D. Hawkins, Solicitor General, and
John C. Sullivan, Assistant Solicitor General, were on the
brief for amici curiae The States of Texas, et al. in support
Lawrence J. Spiwak was on the brief for amicus curiae Phoenix
Center for Advanced Legal and Economic Public Policy Studies
in support of respondents.
M. Corvo and Jonathan Markman were on the brief for amici
curiae Richard Bennett, et al. in support of respondents.
R. McCarthy was on the brief for amici curiae Washington
Legal Foundation, et al. in support of respondents.
D. Seiver, Daniel P. Reing, and Sarah Oh were on the brief
for amicus curiae The Technology Policy Institute in support
Charles Kennedy and James Dunstan were on the brief for
amicus curiae TechFreedom in support of respondents.
J. Burke was on the brief for amicus curiae Information
Technology and Innovation Foundation in support of
N. Weiner was on the brief for amici curiae The Georgetown
Center for Business and Public Policy and Nine Prominent
Economists and Scholars in support of respondents.
Goldstein, pro se, was on the brief as an intervenor in
support of respondents.
P. Elwood, Matthew X. Etchemendy, Peter C. Tolsdorf, Kevin W.
Brooks, Dileep S. Srihari, and Daryl Joseffer were on the
brief for amici curiae The National Association of
Manufacturers, et al. in support of respondents.
P. Murray was on the brief for amici curiae The International
Center for Law and Economics and Participating Scholars in
support of respondents.
G. Kirk was on the brief for amicus curiae Roslyn Layton in
support of respondents.
Wade Lindsay was on the brief for amicus curiae Tech
Knowledge in support of respondents.
Christopher S. Yoo was on the brief for amicus curiae
Christopher S. Yoo in support of respondents.
Grimm was on the briefs for intervenor Digital Justice
Foundation, Inc. in support of neither party.
Before: Millett and Wilkins, Circuit Judges, and Williams,
Senior Circuit Judge.
Broadband Internet Classification
Supreme Court's Decision in Brand X
and Caching in the 2018 Order ........................... 19
Objections to the Classification
"Walled Garden" Reading of Brand X
"Telecommunications Management" Exception ... 22
Adjunct-to-Basic Precedent ..................................
Mobile Broadband Classification
2018 Order's Provisions
Objections to the Classification
Meaning of "Public Switched Network" ..............
Whether Mobile Broadband Is an "Interconnected
Service" ...................................... 5 4
Whether Mobile Broadband Is the "Functional
Equivalent" of a Commercial Mobile Service ...... 62
Section 706 Authority
Section 257 and the 2018 Order's Transparency
Requirements ........................................... 68
Arbitrary and Capricious Challenges
Effects on Investment and Innovation
Harms to Edge Providers and Consumers ................... 85
Reliance on the Transparency Rule ...................... 87
Reliance on Competition
....................................... 8 8
Reliance on Antitrust and Consumer Protection Laws
Express and Ancillary Authority
Commission's Asserted Sources of Authority ... 126
Federal Policy of Nonregulation ......................... 130
2018, the Federal Communications Commission adopted an order
classifying broadband Internet access service as an
information service under Title I of the Communications Act
of 1934, as amended by the Telecommunications Act of 1996,
Pub. L. 104–104, 110 Stat 56 ("the Act").
See In re Restoring Internet Freedom, 33 FCC Rcd.
311 (2018) ("2018 Order"). In so doing,
the agency pursued a market-based, "light-touch"
policy for governing the Internet and departed from its 2015
order that had imposed utility-style regulation under Title
II of the Act.
array of Internet companies, non-profits, state and local
governments, and other entities––bring a host of
challenges to the 2018 Order. We find their objections
unconvincing for the most part, though we vacate one portion
of the 2018 Order and remand for further proceedings on three
2018 Order and today's litigation represent yet another
iteration of a long-running debate regarding the regulation
of the Internet. We rehearsed much of this complex history in
United States Telecom Association v. FCC, 825 F.3d
674, 689–697 (D.C. Cir. 2016) ("USTA"), and
see no need to recapitulate here what was so well and
thoroughly said there. In the interest of
reader-friendliness, though, we briefly review certain
highlights necessary to understand this opinion.
relevant here, the 1996 Telecommunications Act creates two
potential classifications for broadband Internet:
"telecommunications services" under Title II of the
Act and "information services" under Title I. These
similar-sounding terms carry considerable significance: Title
II entails common carrier status, see 47 U.S.C.
§ 153(51) (defining "telecommunications
carrier"), and triggers an array of statutory
restrictions and requirements (subject to forbearance at the
Commission's election). For example, Title II
"declar[es] * * * unlawful" "any * * * charge,
practice, classification or regulation that is unjust or
unreasonable." Id. § 201(b). By contrast,
"information services" are exempted from common
carriage status and, hence, Title II regulation.
analogous set of classifications applies to mobile broadband:
A "commercial mobile service" is subject to common
carrier status, see 47 U.S.C. § 332(c)(1),
whereas a "private mobile service" is not, see
id. § 332(c)(2).
Commission's authority under the Act includes classifying
various services into the appropriate statutory categories.
See National Cable & Telecomms. Ass'n v. Brand X
Internet Servs., 545 U.S. 967, 980–981 (2005). In
the years since the Act's passage, the Commission has
exercised its classification authority with some frequency.
in 1998, the Commission classified broadband over phone lines
as a "telecommunications service." See In re
Deployment of Wireline Services Offering Advanced
Telecommunications Capability, 13 FCC Rcd. 24012 (1998).
four years later, though, the Commission determined that
cable broadband was an "information service,"
see In re Inquiry Concerning High-Speed Access to the
Internet over Cable and Other Facilities
("Cable Modem Order"), 17 FCC Rcd. 4798
(2002), a choice that the Supreme Court upheld in Brand
X, 545 U.S. 967. The agency then applied a similar
classification to wireline and wireless broadband. See In
re Appropriate Framework for Broadband Access to the Internet
over Wireline Facilities, 20 FCC Rcd. 14853 (2005)
("2005 Wireline Broadband Order"); In
re Appropriate Regulatory Treatment for Broadband Access to
the Internet over Wireless Networks, 22 FCC Rcd. 5901
(2007) ("Wireless Broadband Order").
2015 the Commission took the view that broadband Internet
access is, in fact, a "telecommunications service"
and that mobile broadband is a "commercial mobile
service." See In re Protecting and Promoting the
Open Internet, 30 FCC Rcd. 5601 (2015) ("Title
II Order"). In USTA, this court upheld
that classification as reflecting a reasonable interpretation
of the statute under Chevron's second step.
See 825 F.3d at 701–706, 713–724;
see also Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, 467 U.S. 837 (1984).
again, the Commission has switched its tack. In 2017, the
Commission issued a notice of proposed rulemaking seeking to
revert to its pre-2015 position, In re Restoring Internet
Freedom, 32 FCC Rcd. 4434 (2017), and released the final
order at issue in this case in January 2018.
2018 Order accomplishes a number of objectives. First, and
most importantly, it classifies broadband Internet as an
"information service," see 2018 Order
¶¶ 26–64, and mobile broadband as a
"private mobile service," see id.
¶¶ 65– 85. Second, relying on Section 257 of
the Act (located in Title II but written so as to apply to
Titles I through VI), the Commission adopts transparency
rules intended to ensure that consumers have adequate data
about Internet Service Providers' network practices.
See id. ¶¶ 209–38. Third, the
Commission undertakes a cost-benefit analysis, concluding
that the benefits of a market-based, "light-touch"
regime for Internet governance outweigh those of common
carrier regulation under Title II, see id.
¶¶ 304–323, resting heavily on the
combination of the transparency requirements imposed by the
Commission under Section 257 with enforcement of existing
antitrust and consumer protection laws, see id.
¶¶ 140– 154. The Commission likewise finds
that the burdens of the Title II Order's conduct rules
exceed their benefits. See id. ¶¶
uphold the 2018 Order, with two exceptions. First, the Court
concludes that the Commission has not shown legal authority
to issue its Preemption Directive, which would have barred
states from imposing any rule or requirement that the
Commission "repealed or decided to refrain from
imposing" in the Order or that is "more
stringent" than the Order. 2018 Order ¶
195. The Court accordingly vacates that portion of the Order.
Second, we remand the Order to the agency on three discrete
issues: (1) The Order failed to examine the implications of
its decisions for public safety; (2) the Order does not
sufficiently explain what reclassification will mean for
regulation of pole attachments; and (3) the agency did not
adequately address Petitioners' concerns about the
effects of broadband reclassification on the Lifeline
Broadband Internet Classification
central issue before us is whether the Commission lawfully
applied the statute in classifying broadband Internet access
service as an "information service." We approach
the issue through the lens of the Supreme Court's
decision in Brand X, which upheld the
Commission's 2002 refusal to classify cable broadband as
a "telecommunications service." 545 U.S. at 974.
The Commission's classification of cable modem as an
"information service" was not challenged in
Brand X, see id. at 987, but, given that
"telecommunications service" and "information
service" have been treated as mutually exclusive by the
Commission since the late 1990s, see, e.g., 2018
Order ¶¶ 53, 62 & n.239; Title II
Order ¶ 385, a premise Petitioners do not
challenge, see Mozilla Br. 24, we view Brand
X as binding precedent in this case.
start, of course, with the statutory definition. Section 47
U.S.C. § 153(24) reads:
The term "information service" means the offering
of a capability for generating, acquiring, storing,
transforming, processing, retrieving, utilizing, or making
available information via telecommunications * * * but does
not include any use of any such capability for the
management, control, or operation of a telecommunications
system or the management of a telecommunications service.
final clause is known as the "telecommunications
management" exception. The Act defines
"telecommunications service" (as distinct from
"telecommunications," see id. §
153(50)), as follows:
The term "telecommunications service" means the
offering of telecommunications for a fee directly to the
public, or to such classes of users as to be effectively
available directly to the public, regardless of the
Id. § 153(53).
Commission appears to make two arguments for its
classification. It states first that "broadband Internet
access service necessarily has the capacity or potential
ability to be used to engage in the activities within the
information service definition-'generating, acquiring,
storing, transforming, processing, retrieving, utilizing, or
making available information via
telecommunications,'" 2018 Order ¶ 30
(quoting 47 U.S.C. § 153(24)), and on that basis alone
merits an "information service" classification.
Commission then goes on to say: "But even if
'capability' were understood as requiring more of the
information processing to be performed by the classified
service itself, we find that broadband Internet access
service meets that standard." 2018 Order ¶
33. As we will see, the Commission regards this requirement
as being met by specific information-processing features that
are, in its view, functionally integrated with broadband
service, particularly Domain Name Service ("DNS")
and caching, about which more later. (Petitioners themselves
treat the Commission's DNS/caching argument as "an
alternative ground" for the Commission's
classification. Mozilla Reply Br. 21.)
review is governed by the familiar Chevron framework
in which we defer to an agency's construction of an
ambiguous provision in a statute that it administers if that
construction is reasonable. See, e.g., American
Elec. Power Serv. Corp. v. FCC, 708 F.3d 183, 186 (D.C.
Cir. 2013) (The Chevron framework "means
(within its domain) that a 'reasonable agency
interpretation prevails.'") (quoting Northern
Nat. Gas Co. v. FERC, 700 F.3d 11, 14 (D.C. Cir. 2012)).
By the same token, if "Congress has directly spoken to
an issue then any agency interpretation contradicting what
Congress has said would be unreasonable." Entergy
Corp. v. Riverkeeper, Inc., 556 U.S. 208, 218 n.4
Chevron Step One, we ask "whether Congress has
directly spoken to the precise question at issue." 467
U.S. at 842. Where "the intent of Congress is clear,
that is the end of the matter; for [we], as well as the
agency, must give effect to the unambiguously expressed
intent of Congress." Id. at 842–843. But
if "the statute is silent or ambiguous with respect to
the specific issue," we proceed to Chevron Step
Two, where "the question for the court is whether the
agency's answer is based on a permissible construction of
the statute." Id. at 843. However, we do not
apply Chevron reflexively, and we find ambiguity
only after exhausting ordinary tools of the judicial craft.
Cf. Kisor v. Wilkie, 139 S.Ct. 2400, 2414–2415
(2019). All this of course proceeds in the shadow of
Brand X, which itself applied Chevron to a
these principles here, we hold that classifying broadband
Internet access as an "information service" based
on the functionalities of DNS and caching is "'a
reasonable policy choice for the [Commission] to make' at
Chevron's second step." Brand X,
545 U.S. at 997 (alteration in original) (quoting
Chevron, 467 U.S. at 845). As we said in
USTA, "Our job is to ensure that an agency has
acted 'within the limits of [Congress's]
delegation' of authority," 825 F.3d at 697 (quoting
Chevron, 467 U.S. at 865), and "we do not
'inquire as to whether the agency's decision is wise
as a policy matter; indeed, we are forbidden from
substituting our judgment for that of the agency,'"
id. (quoting Association of Am. Railroads v.
ICC, 978 F.2d 737, 740 (D.C. Cir. 1992)); see also
United States Telecom Ass'n v. FCC, 855 F.3d 381,
384 (D.C. Cir. 2017) ("[T]he [Brand X] Court
made clear in its decision- over and over-that the Act left
the [classification] to the agency's discretion."
(Srinivasan, J., joined by Tatel, J., concurring in denial of
rehearing en banc)).
Supreme Court's Decision in Brand X
X held that, by virtue of the ambiguity of the word
"offering," the FCC could permissibly choose not to
classify cable modem service as a "telecommunications
service." Brand X, 545 U.S. at 973–974,
989–992. As to DNS and caching, the Brand X
Court endorsed the Commission's argument that those
functionalities can be relied on to classify cable modem
service as an "information service." Challengers
opposing the FCC had argued that when consumers "go
beyond" certain Internet services offered by cable modem
companies themselves-for example, beyond access to
proprietary e-mail and Web pages (commonly referred to as the
cable modem companies' "walled gardens")-the
companies were "offering" a
"telecommunications service" rather than an
"information service." Id. at 998. The
Court rejected this claim. It found that such a view
"conflicts with the Commission's understanding of
the nature of cable modem service," which the Court
deemed "reasonable." Id.; cf. 2018
Order ¶ 51. The Court explained that-when a user
accesses purely third-party content online-"he is
equally using the information service provided by
the cable company that offers him Internet access as when he
accesses the company's own Web site, its e-mail service,
or his personal Web page," Brand X, 545 U.S. at
999 (emphasis added), i.e., "walled garden"
services. Why so?
X's answer, as relevant here, lay in DNS and
caching. The argument proceeded in two steps-first, showing
that DNS and caching themselves can properly fall under the
"information service" rubric; second, showing that
these "information services" are sufficiently
integrated with the transmission element of broadband that it
is reasonable to classify cable modem service as an
"information service." See Brand X, 545
U.S. at 999–1000.
the first step, the Court observed that "[a] user cannot
reach a third party's Web site without DNS,"
Brand X, 545 U.S. at 999, which "among other
things, matches the Web page addresses that end users type
into their browsers (or 'click' on) with the Internet
Protocol (IP) addresses of the servers containing the Web
pages the users wish to access," id. at 987. It
therefore saw it as "at least reasonable" to treat
DNS itself "as a 'capability for acquiring
* * * retrieving, utilizing, or making available' Web
site addresses and therefore part of the information service
cable companies provide." Id. at 999 (quoting
47 U.S.C. § 153(24)); see also id. at n.3
(rebutting dissent's claim that "DNS does not count
as use of the information-processing capabilities of Internet
service"). The Court applied a cognate analysis to
caching, which "facilitates access to third-party Web
pages by offering consumers the ability to store, or
'cache' popular content on local computer
servers," id. at 999, "obviat[ing] the
need for the end user to download anew information from
third-party Web sites each time the consumer attempts to
access them," id. at 999–1000. Thus the
Court found "reasonable" the FCC's position
that "subscribers can reach third-party Web sites via
'the World Wide Web, and browse their contents, [only]
because their service provider offers the capability for * *
* acquiring, [storing] * * * retrieving [and] utilizing * * *
information.'" Id. at 1000 (alterations in
original) (some internal quotation marks omitted) (quoting
In re Federal-State Joint Bd. on Universal Serv., 13
FCC Rcd. 11501, 11537–11538 ¶ 76 (1998)
the second step, the Brand X Court endorsed the
FCC's position that-because DNS and caching are
"inextricably intertwined" with high-speed
transmission-it was reasonable for the Commission
not to treat the resulting package as an
"offering" of a standalone "telecommunications
service." 545 U.S. at 978–979, 989–991;
see Cable Modem Order at 4823 ¶ 38 ("As
currently provisioned, cable modem service is a single,
integrated service that enables the subscriber to utilize
Internet access service * * * ."). "[H]igh-speed
transmission used to provide cable modem service is a
functionally integrated component of [cable modem]
service because it transmits data only in connection with the
further processing of information and is necessary to provide
Internet service." Brand X, 545 U.S. at 998
(emphasis added). DNS and caching, in turn, are two examples
of such "further processing" integrated with the
data transmission aspect of cable modem service. "[A]
consumer cannot purchase Internet service without also
purchasing a connection to the Internet and the transmission
always occurs in connection with information
processing," id. at 992, in the form of (for
example) DNS or caching. Thus, according to the Supreme
Court, the Commission reasonably concluded that cable modem
service is not an offering of a standalone
"telecommunications service," but, rather, an
"information service"-which by definition is
offered "via telecommunications." See id.
at 989– 992; see also 2018 Order ¶ 52.
DNS and Caching in the 2018 Order
reasoning in the 2018 Order tallies with the line of argument
in Brand X described above. See, e.g.,
2018 Order ¶¶ 26, 34, 41, 51, 53, 54, 55
n.207, 57. The Commission's principal claim is that
"ISPs offer end users the capability to interact with
information online * * * through a variety of functionally
integrated information processing components that are part
and parcel of the broadband Internet access service offering
itself"-including DNS and caching. Id. ¶
33. The Commission describes DNS and caching as
"integrated information processing capabilities offered
as part of broadband Internet access service to consumers
today." Id. We hold that under Brand X
this conclusion is reasonable.
that the 2018 Order alluded to several "information
processing functionalities inextricably intertwined with the
underlying service" besides DNS and caching, such as
"email, speed test servers, backup and support services,
geolocation-based advertising, data storage, parental
controls, unique programming content, spam protection, popup
blockers, instant messaging services, on-the-go access to
Wi-Fi hotspots, and various widgets, toolbars, and
applications." 2018 Order ¶ 33 n.99.
Although the 2018 Order states that these "further
support the 'information service'
classification," it did not find them
"determinative," id., and mentioned them
only briefly in a footnote. Thus we address DNS and caching
passages echoing Brand X, the Commission
characterized the essential roles of DNS and caching. As to
DNS, it observed that DNS is "indispensable to ordinary
users as they navigate the Internet." 2018
Order ¶ 34 (quoting AT&T Comments at 73, J.A.
189). "[T]he absence of ISP-provided DNS would
fundamentally change the online experience for the
consumer." Id. This formulation is actually a
good deal more cautious than that of the Court in Brand
X, which declared that without DNS a "user cannot
reach a third party's Web site." 545 U.S. at 999. In
fact users who know the necessary IP addresses could enter
them for each relevant server. But the Commission and the
Court (the latter more emphatically) are making an undeniable
pragmatic point-that use of the Web would be nightmarishly
cumbersome without DNS.
caching, the Commission explained that it "provides the
capability to perform functions that fall within the
information service definition," 2018 Order
¶ 41, including, but not limited to, "enabl[ing]
the user to obtain more rapid retrieval of information
through the network," id. (quoting Information
Technology and Innovation Foundation ("ITIF")
Comments at 13, WC Dkt. No. 17-108 (July 17, 2017) (quoting,
in turn, Title II Order ¶ 372)). Operating a
caching service entails running "complex algorithms to
determine what information to store where and in what
format," id. (quoting ITIF Comments at 13), so
that "caching involves storing and retrieving
capabilities required by the 'information service'
definition," id. Thus the Commission added
technical detail reinforcing the Brand X Court's
statements as to caching. See 545 U.S. at
Commission then summarized these points, again in terms
resonating with those in which Brand X had endorsed
the 2002 Cable Modem Order. It argued that "ISPs offer a
single, inextricably intertwined information service,"
2018 Order ¶ 49, based in part on the
functionalities of DNS and caching. It said that "all
broadband Internet access services rely on DNS and commonly
also rely on caching by ISPs," id. ¶ 48,
and contended that DNS and caching should be "understood
as part of a single, integrated information service offered
by ISPs," id. ¶ 50; see also id.
¶ 42. It then maintained, drawing on Brand X,
that "[w]here * * * a service involving transmission
inextricably intertwines that transmission with information
service capabilities-in the form of an integrated information
service-there cannot be 'a "stand-alone"
offering of telecommunications * * *,'" id.
¶ 53 (quoting Brand X, 545 U.S. at 989), in
line with the Commission's stance in Brand X.
"[A]n offering like broadband Internet access service
that 'always and necessarily' includes integrated
transmission and information service capabilities * * * [is]
an information service." Id. ¶ 55 (quoting
Brand X, 545 U.S. at 992).
Objections to the Classification
raise numerous objections aimed to show that the
Commission's reliance on DNS and caching for classifying
broadband as an "information service" is
unreasonable at Chevron's second step. We find
"Walled Garden" Reading of Brand X
to short-circuit the Commission's reliance on Brand
X, Petitioners try to characterize the Court's
reasoning in that case as dependent on a vision of Internet
providers as offering mainly access to their "walled
gardens." They assert that in Brand X "the
Court was focused on the [Broadband Internet Access Service
("BIAS")] providers' add-on information
services, such as ISP-provided e-mail," and that
"the Court had no occasion to consider the proper
classification of a service combining telecommunications with
nothing more than DNS and caching." Mozilla Br. 42. This
reading is unpersuasive because it airbrushes out the lengthy
discussion summarized above in which the Court finds
"reasonable" the Commission's
"information-service" classification even where
"a consumer goes beyond [walled garden] offerings and
accesses content provided by parties other than the cable
company," Brand X, 545 U.S. at 998-by virtue of
the functionalities of DNS and caching, see id. at
998–1000. We thus reject Petitioners' attempt to
discredit the Commission's sensible reliance on Brand
X's treatment of DNS and caching. See,
e.g., 2018 Order ¶¶ 10, 34, 41, 51;
see also Part I.C.4 infra (addressing
Petitioners' related claims in functional integration
"Telecommunications Management" Exception
assert that DNS and caching fall under the
"telecommunications management" exception
("TME") and so cannot be relied on to justify an
"information service" classification. See
Mozilla Br. 43–46. We find that Petitioners'
arguments do not hold up, either because they rest on a
misreading of Brand X and USTA or do not
adequately grapple with the Commission's reasonable
explanation as to why DNS and caching fall outside that
exception. See 2018 Order ¶¶ 36–38,
42–44. Our discussion here will be quite involved in
part because Brand X did not directly confront
whether DNS and caching may fall within the TME. See
Brand X, 545 U.S. at 999 n.3.
deciding whether to slot DNS and caching under the TME the
Commission confronted "archetypal Chevron
questions about how best to construe an ambiguous term in
light of competing policy interests." City of
Arlington v. FCC, 569 U.S. 290, 304 (2013). "[I]f
the implementing agency's construction is reasonable,
Chevron requires a federal court to accept the
agency's construction of the statute, even if the
agency's reading differs from what the court believes is
the best statutory interpretation." Brand X,
545 U.S. at 980. And when an agency changes course, as it did
here, it "must show that there are good reasons for the
new policy," but "it need not demonstrate to a
court's satisfaction that the reasons for the new policy
are better than the reasons for the old one."
USTA, 825 F.3d at 707 (quoting FCC v. Fox
Television Stations, Inc., 556 U.S. 502, 515 (2009)).
The Commission clears this bar.
The Commission's Interpretation
begin with, Petitioners misconstrue USTA. As they do
persistently, they gloss passages that find parts of the
Title II Order to be permissible readings of the
statute as mandating those readings-when the
passages plainly do not do so. A case in point is the
treatment of the TME. Petitioners say that "[t]his Court
has already agreed that DNS and caching fall within
the terms of the telecommunications management
exception." Mozilla Br. 43 (emphasis added) (citing
USTA, 825 F.3d at 705). Yet all we said in
USTA was that we were "unpersuaded" that
the FCC's "use of the telecommunications management
exception was * * * unreasonable." USTA, 825
F.3d at 705. The Title II Order, in other words, adopted a
permissible reading, though not a required one. This holding
in no way bars the Commission from adopting a contrary view
now-so long as it adequately justifies that view, as we find
Petitioners' objections, we find that the 2018 Order
engages in reasonable line-drawing for purposes of
administering this amorphous exception. Relying on judicial
precedent, Department of Justice policy (developed pursuant
to its duty to see that the settlement of its antitrust suit
against AT&T was lawfully implemented), and prior
Commission statements, the 2018 Order seems to envision a
continuum with two poles: a user-centered pole and network
management-centered pole. It locates a given service on the
continuum and classifies it as falling within or outside the
TME according to which pole it appears closest to. If a
service is "directed at * * * customers or end
users," 2018 Order ¶ 36 (quoting
United States v. Western Elec. Co., No. 82-0192,
1989 WL 119060, at *1 (D.D.C. Sept. 11, 1989)), or benefits
users "in significant part," id. ¶
38, or "predominantly," id. ¶ 42, it
does not call for TME classification. We view this
construction as an adequately justified departure from the
Title II Order's understanding of the TME in the face of
a dauntingly ambiguous provision with inevitably fuzzy
borderline cases and complex and possibly inconsistent (or at
least orthogonal) policy implications.
the Commission's approach, it need not-and does not-deny
that even those services properly classed under the TME
benefit end users in some respect. It would be folly
to deny as much given that the raison d'être of
ISPs is to serve their customers. As one commenter notes,
"To maintain * * * that something that is
'useful' to an end user cannot fall under the
management exception is absurd, as the entire purpose of
broadband is to be useful to end users * * * ." Public
Knowledge Reply at 37, J.A. 2857; see 2018 Order
¶ 38 n.135; see also Mozilla Reply Br.
rule involving a spectrum or continuum commonly requires a
decider to select a point where both ends are in play. Night
and day are distinguishable, however difficult classification
may be at dawn and dusk. The Commission's way of
construing the TME and applying its continuum-based approach
is not inconsistent with Public Knowledge's point that
"the entire purpose of broadband is to be useful to end
users." The Commission notes that its "focus
remains on the purpose or use of the specific function in
question and not merely whether the resulting service, as a
whole, is useful to end-users." 2018 Order
¶ 38 n.135. While DNS might play a role in managing a
network, the Commission reasonably concluded that DNS
"is a function that is useful and essential to providing
Internet access for the ordinary consumer," id.
¶ 36, and that these benefits to the end user
predominate over any management function DNS might serve. The
Commission says that caching "benefits" users
through "rapid retrieval of information from a local
cache," id. ¶ 42, and can also be used
"as part of a service, such as DNS, which is
predominantly to the benefit of the user (DNS
caching)," id. (emphasis added). And it gives
examples of services that in its view are genuine TME
services: Simple Network Management Protocol
("SNMP"), Network Control Protocol
("NETCONF"), or Data Over Cable Service Interface
Specification ("DOCSIS") bootfiles for controlling
the configuration of cable modems. Id. ¶ 36
(quoting Sandvine Comments at 5, WC Dkt. No. 17-108 (July 14,
2017)). It observes that the Title II Order had essentially
proceeded in a contrary manner, finding that the
management-centered functionality of DNS predominated, so as
to render it TME-worthy. "Although confronted with
claims that DNS is, in significant part, designed to
be useful to end-users rather than providers, the Title
II Order nonetheless decided that it fell within the
[TME]." Id. ¶ 38 (emphasis added). The
Commission reasonably declined to follow this route (partly,
as we shall see below, because it believed that it would
cause the exception to swallow the rule in ways antithetical
to its reading of Commission precedent and the Act's
goals). It chose a different, and reasonable, alternative.
Modification of Final Judgment Precedent
adopting its approach to the TME, the Commission rested on
precedent from a line of judicial decisions interpreting the
Modification of Final Judgment ("MFJ"), a consent
decree entered into between the Department of Justice and
AT&T in 1982 as part of the breakup of the AT&T
monopoly to create a set of independent regional Bell
Operating Companies ("BOCs"). See United States
v. American Tel. & Tel. Co., 552 F.Supp. 131,
225–232 (D.D.C. 1982) (subsequent history omitted).
This decree, which modified a 1956 consent decree and final
judgment, spawned a long line of cases in which District
Court Judge Harold Greene resolved conflicts over the
decree's limits on the BOCs' permissible business
ventures. The cases interpreted a broad array of terms of the
consent decree, entered many modifications, and granted
waivers, balancing a need to "avoid anticompetitive
effects" (which might flow from BOC exploitation of
their monopolies in telecommunications to dominate related
services) with a hope of "bring[ing] th[e] nation closer
to enjoyment of the full benefits of the information
age" by facilitating "the efficient, rapid, and
inexpensive dissemination of * * * information."
United States v. Western Elec. Co., 714 F.Supp. 1,
3, 5 (D.D.C. 1988), aff'd in part, rev'd in
part, 900 F.2d 283 (D.C. Cir. 1990).
Commission makes a good case for the persuasiveness of this
precedent. First, the definition of "information
service" in the 1996 Act––including the
TME–– is lifted nearly verbatim from the 1982
consent decree. Compare American Tel. & Tel.
Co., 552 F.Supp. at 229, with 47 U.S.C. §
153(24). Second, in the case on which the Commission
principally relies, the court was interpreting the MFJ's
TME equivalent and adopted a reading in keeping with its
understanding of Department of Justice policy at the time.
Western Electric, Judge Greene addressed the
question whether the consent decree permitted the BOCs to
offer relay services for customers who use
"telecommunications devices for the deaf"
("TDDs"). 1989 WL 119060, at *1. The court held
that, because TDD services involve "transformation of
information"––"the very crux and
purpose of the TDD relay services"––they
"f[e]ll squarely" within the definition of
"information services," which covers the capability
to "transform * * * information." Id.
Accordingly offering the service ran afoul of Section
II(D)(1) of the decree, see American Tel. & Tel.
Co., 552 F.Supp. 131 at 227, banning the BOCs from
providing information services, see Western
Electric, 1989 WL 119060, at *1. The BOCs argued as a
fallback position that TDD services fell within the TME.
Id. Judge Greene made quick work of this, finding it
"patently obvious that what is being sought * * * does
not involve the internal management of Bell Atlantic"
and hence was not TME-eligible. Id. In support of
this conclusion the court explained, relying on the
Department of Justice Competitive Impact Statement,
that the TME "was directed at internal
operations, not at services for customers or end users."
Western Elec. Co., 1989 WL 119060, at *1 (emphasis
added) (citing Department of Justice, Competitive Impact
Statement in Connection with Proposed Modification of Final
Judgment, Notice, 47 Fed. Reg. 7170, 7176 (Feb. 17,
this language that the Commission expressly invokes to ground
its interpretation of the TME, stating that it (the
Commission) "interpret[s] the concepts of
'management, control, or operation' in the [TME]
consistent with" Judge Greene's analysis. See
2018 Order ¶ 36. And as we have noted above, the
Commission rightly acknowledges that being "directed
at" one end of a spectrum does not rule out embodying
certain aspects from the other end. The agency was within its
rights to treat Judge Greene's
analysis––which in essence interpreted the
statutory provision at issue and squared with the
government's position supporting enforcement of the
antitrust decree-as support for its construction of the TME.
(As no party objected to the BOCs' offering of TDD
services, and BOC entry into this activity posed no
anticompetitive risk, the court granted a waiver for their
provision. See Western Elec. Co., 1989 WL 119060, at
Commission offers an added reason to put stock in the MFJ
precedent: It believed that Petitioners' approach risked
causing the TME exception to swallow the "information
services" category. It said, plausibly, that such an
"expansive view" of the TME assigns it an outsized
role, thereby "narrowing * * * the scope of information
services" in a way that clashes with the
Commission's pre-1996 Act approach to cabining the
"basic services" category, see 2018 Order
¶ 38 & n.135, and the 1996 Act's imperative to
"preserve the vibrant and competitive free market * * *
for the Internet * * * unfettered by Federal or State
regulation," id. ¶ 39 (quoting 47 U.S.C.
§ 230(b)(2)), which the Commission permissibly uses as a
rationale to interpret a vague provision in a way that limits
regulatory burdens. In sum, the Commission lawfully construed
an ambiguous statutory phrase in a way that tallies with its
policy judgment, as is its prerogative.
objections to the Commission's classification of DNS and
reliance on the MFJ do not convince us.
Petitioners' objections pillory a straw man. They state
that "[t]he statute asks whether a function is used
'for the management, control, or operation of a
telecommunications system,' not whether the function also
benefits consumers." Mozilla Br. 45 (quoting 47 U.S.C.
§ 153(24)). But, as noted before, the Commission need
not deny, for example, that "configuration
management"––a function it slots under the
TME, see 2018 Order ¶ 36 & n.126-benefits
end users in some respect. See Mozilla Reply Br.
19–20. It can simply say that DNS/caching and (for
example) configuration management, respectively, adjoin
opposite ends of the spectrum, one meriting inclusion in the
TME and the other not.
observe that DNS renders broadband Internet access "more
efficient in ways that are generally invisible to
users," a point that misses its mark entirely, or at
best equivocates on the key point at issue. Mozilla Br. 45.
While DNS is "invisible" in the sense that it is
"under the hood," so to speak, it remains
"essential to providing Internet access for the ordinary
consumer." 2018 Order ¶ 36. Using a
certain "configuration" tool or protocol might,
say, make Internet traffic a bit faster or slower in the way
that a metro's use of varying rail technologies might
influence train speeds. But an absence of DNS would be
something different altogether, hobbling ordinary users in
navigating the Web, akin to a total absence of signage in a
metro. Signage, unlike DNS, is of course quite apparent, but
their user-centered purposes are alike for all practical
purposes. (We address in Part I.C.4 Petitioners' separate
argument that users' ability to obtain DNS from providers
other than their ISPs precludes a finding of functional
integration.) So the sense in which DNS is
"invisible" to many end users is fully consistent
with the agency's rationale for locating it nearer to the
user-centric pole-and hence beyond the TME.
an argument made by amici on behalf of Petitioners as to DNS
arguably aligns with claims made by the Commission's
amici and so may work in the agency's favor.
Petitioners' amici assert in the context of functional
integration (an issue to which we turn in Part I.C.4) that
broadband Internet access is not functionally integrated with
DNS because broadband access works perfectly well
without DNS. "Internet architects deliberately
created DNS to be entirely independent from the IP packet
transfer function," Jordan/Peha Amicus Br. 17, and
"a BIAS provider's DNS is an extraneous
capability * * * not required for the core
service," id. at 17–18 (emphasis added).
But if DNS is "extraneous" to operating the
network, it is at least debatable whether DNS is used in
"the management, control, or operation of a
telecommunications system or the management of a
telecommunications service." Amici for the Commission
make related points, observing that "[a]n app's DNS
translation transaction ends before the BIAS transmission
begins," "DNS transactions do not provide the BIAS
provider with information about the best path to the
destination," and they "do not have the power to
either optimize or impair the BIAS provider network."
Bennett et al., Amicus Br. 13. Thus it is at least
reasonable not to view DNS as a network management tool.
Id. at 13–14. Granted, Jordan and Peha remark
that running DNS helps an ISP "reduce the volume of
DNS queries passing through its network." Jordan/Peha
Amicus Br. 18. But in the deferential posture of
Chevron the points quoted above by Jordan/Peha seem
in part to support the Commission's reading of the record
(consistent with Bennett et al.) as showing that,
whereas "little or nothing in the DNS look-up process is
designed to help an ISP 'manage' its network,"
2018 Order ¶ 36, DNS is "essential to
providing Internet access for the ordinary consumer,"
id., for whom "DNS is a must,"
id. ¶ 34 (quoting Brand X, 545 U.S. at
Commission extends the same logic to caching, though matters
here are less obvious. It explains that caching "does
not merely 'manage' an ISP's broadband Internet
access service and underlying network," but
"enables and enhances consumers' access to and use
of information online." 2018 Order ¶ 42.
It makes clear that ISP caching service is not just
"instrumental to pure transmission" but, rather,
"enhances access to information" by consumers by
facilitating "rapid retrieval of information from a
local cache or repository." Id. As the Title II
Order had put it (albeit drawing a different lesson),
"caching * * * provide[s] a benefit to subscribers in
the form of faster, more efficient service,"
id. ¶ 368 n.1037, by "enabling the user to
obtain 'more rapid retrieval of information' through
the network," id. ¶ 372 (quoting Cable
Modem Order, 17 FCC Rcd. at 4810 ¶ 17 & n.76);
cf. Brand X, 545 U.S. at 999–1000 (stating
that "[c]acheing [sic] obviates the need for the end
user to download anew information from third-party Web sites
* * *, thereby increasing the speed of information
some ISPs describe caching in terms indicating that it is a
network management practice, and caching can help reduce
ISPs' costs. See Jordan/Peha Amicus Br.
20–21. But these facts are not determinative. The
Commission is entitled to draw its own conclusions based on
its (permissible) interpretation of the TME, so long as
consistent with the record. Here it has done that. The
Commission found (without contradiction in the record) that
caching "enables and enhances consumers' access to
and use of information online." 2018 Order
¶ 42. In particular, "[t]he record reflects that
without caching, broadband Internet access service would be a
significantly inferior experience for the consumer,
particularly for customers in remote areas, requiring
additional time and network capacity for retrieval of
information from the Internet." Id. That is so,
the Commission maintains, even though encrypted traffic does
not use caching, because "truly pervasive encryption on
the Internet is still a long way off and * * * many sites
still do not encrypt." Id. at n.147 (citation
Petitioners raise a host of objections arising from the
Commission's "adjunct-to-basic" precedent,
developed in the Computer Inquiries orders issued by
the Commission. See In re Amendment of Section 64.702 of
the Commission's Rules and Regulations (Second Computer
Inquiry), 77 F.C.C.2d 384 (1980) ("Second
in our view the precedents in this area are murky, raising
convoluted questions of grafting older Commission
interpretations onto the "information services"
definition as applied to broadband Internet service, we find
neither side's recounting of adjunct-to-basic precedent
fully compelling. Even though Congress's creation of the
TME may fairly be said to have "[t]rack[ed]"
adjunct-to-basic in certain respects, USTA, 825 F.3d
at 691, the Commission reasonably refused to be bound by
facets of the analogy filtered through the lens of the Title
II Order. The Commission's chief task was to interpret
the TME's statutory text in a coherent, workable fashion
and offer a reasonable rationale for altering its course, not
to demonstrate that its reading is a tight fit with every
aspect of adjunct-to-basic precedent. In fact, as we will
see, that precedent is not the seamless web of
try to catch the Commission in a contradiction in a two-step
approach. The agency, as we have seen, locates DNS and
caching outside the TME. First, Petitioners invoke Commission
precedent seeming to suggest that all or most
adjunct-to-basic services would fall under the TME. Second,
they observe that––whereas paradigmatic examples
of adjunct-to-basic services such as speed dialing and call
forwarding are undeniably useful to consumers and, per step
one, belong under the TME––the Commission can
give no satisfactory explanation for excluding DNS and
caching from the TME. In particular, Petitioners and
commenters analogize DNS to ordinary directory assistance,
which the Commission has dubbed adjunct-to-basic, since both
services help direct users to their chosen endpoints.
See, e.g., Mozilla Br. 46; Open Technology Institute
("OTI") New America Comments at 33– 34, J.A.
1631–1632. Whence the difference?
sense of these claims and the Commission's response, we
need to review the basic terms. To preview, even if there are
incongruities in the Commission's treatment of the TME
vis-à-vis the adjunct-to-basic idea, we see them as
byproducts of drawing imperfect analogies.
created a distinction between "basic services" and
"enhanced services" in its Second Computer
Inquiry, with the latter concept defined as follows:
[T]he term "enhanced service" shall refer to
services offered over common carrier transmission
facilities used in interstate communications, which employ
computer processing applications that act on the format,
content, code, protocol or similar aspects of the
subscriber's transmitted information; provide the
subscriber additional, different, or restructured
information; or involve subscriber interaction with stored
information. Enhanced services are not regulated under Title
II of the Act.
Second Computer Inquiry, 77 F.C.C.2d at 498; see
also 47 C.F.R. § 64.702(a). In contrast,
In offering a basic transmission service * * * a carrier
essentially offers a pure transmission capability over a
communications path that is virtually transparent in terms of
its interaction with customer supplied information.
Second Computer Inquiry, 77 F.C.C.2d at 420 ¶
96; see also id. at 419–420 ¶ 95
("[A] basic transmission service should be limited to
the offering of transmission capacity between two or more
points suitable for a user's transmission needs and
subject only to the technical parameters of fidelity or
distortion criteria, or other conditioning.").
most contested category is a third: adjunct-to-basic. It
arose to accommodate the reality that providers of ordinary
telephone services wished to offer new technologies
facilitating that service-technologies that would quite
plainly fall under the "enhanced services"
definition, though ordinary phone service was indisputably a
"basic service." To square the circle and avoid
complexities of hybrid treatment, the Commission created an
In the  NATA Centrex proceeding, the
Commission defined adjunct services as services that
'facilitate the provision of basic services without
altering their fundamental character,' and determined
that such services should be treated as basic services for
purposes of the Computer II rules, even though they
might fall within possible literal readings of the definition
of enhanced services.
In re Bell Operating Companies, Petitions for Forbearance
from the Application of Section 272 of the Commc'ns Act
of 1934, as Amended, to Certain Activities, 13 FCC Rcd.
2627, 2639 ¶ 18 (CCB 1998) ("272 Forbearance
Order") (citation omitted).
Commission has set out two necessary criteria for a service
to qualify as adjunct-to-basic:
[C]arriers may use some of the processing and storage
capabilities within their networks to offer optional tariffed
features as 'adjunct to basic' services, if the
features: (1) are intended to facilitate the use of
traditional telephone service; and (2) do not alter the
fundamental character of telephone service.
In re Establishment of a Funding Mechanism for Interstate
Operator Servs. for the Deaf, 11 FCC Rcd. 6808,
6816–6817 ¶ 16 (1996) ("Operator Services
services qualify as adjunct-to-basic? The answer covers a
remarkably wide gamut, including "inter alia,
speed dialing, call forwarding, computer-provided directory
assistance, call monitoring, caller i.d., call tracing, call
blocking, call return, repeat dialing, and call tracking, as
well as certain Centrex features." In re
Implementation of the Non-Accounting Safeguards of Sections
271 and 272 of the Commc'ns Act of 1934, as Amended,
11 FCC Rcd. 21905, 21958 ¶ 107 n.245 (1996)
("Non-Accounting Safeguards Order"). The
same goes for "communications between a subscriber and
the network itself for call setup, call routing, call
cessation, calling or called party identification, billing,
and accounting," In re N. Am. Telecommunications
Ass'n Petition for Declaratory Ruling Under Section
64.702 of the Commission's Rules Regarding the
Integration of Centrex, Enhanced Servs., and Customer
Premises Equip., 3 FCC Rcd. 4385, 4386 ¶ 11 (1988)
("Centrex Order") (citation omitted), and
prepaid calling cards with built-in advertisements, see
American Tel. & Tel. Co. v. FCC, 454 F.3d 329, 331
(D.C. Cir. 2006)-though not "talking yellow pages"
with advertisements, see id. at 333; see also
Northwest Bell Tel. Co. Petition for Declaratory Ruling,
2 FCC Rcd. 5986, 5988 ¶ 20 (1987).
laid out the key terms, we return to the parties' claims.
We are satisfied with the Commission's prioritization of
the MFJ precedent and its way of squaring the
adjunct-to-basic precedent with its treatment of DNS and
as explained above, the Commission had adequate grounds to
focus on the 1982 MFJ's definition of "information
service," which the 1996 Act took over virtually word
devising a coherent and workable test for applying the
statutory TME permissibly takes precedence in the
Commission's analysis over attempts to reach synthetic
conformity between adjunct-to-basic precedent and the 1996
Act's terms. As the Court said in Brand X, we
should "leav[e] federal telecommunications policy in
this technical and complex area to be set by the Commission,
not by warring analogies," 545 U.S. at 992, whether
crafted by courts, litigants, or Commissions past.
the Commission's historical approach to adjunct-to-basic
has hardly been clear-cut in its own right. As we have
previously said, "it is difficult to discern any clear
policy" in the Commission's application of its
"various formulations" of what counts as
adjunct-to-basic, so that "[t]he Commission's
rulings reflect a highly fact-specific, case-by-case style of
adjudication." American Tel. & Tel. Co.,
454 F.3d at 333. Given this lack of cohesion, we can hardly
fault the current Commission for discounting the persuasive
force of adjunct-to-basic analogies in interpreting and
applying the 1996 Act's TME in light of its policy views.
the Commission's definition of adjunct-to-basic services
does not, as a linguistic matter, force the Commission's
hand in interpreting the TME. Just because an
adjunct-to-basic service like speed dialing or directory
assistance "facilitate[s]" telephone service,
USTA, 825 F.3d at 691, it hardly follows
automatically that it also qualifies under the text of the
TME, since it requires no contortion of English to say that
(for example) directory assistance is, by and large, not used
to "manage" or "control" or
"operat[e]" a telecommunications system or service,
47 U.S.C. § 153(24).
Commission had ample basis to dub the adjunct-to-basic line
of analysis "potentially ambiguous precedent,"
2018 Order ¶ 39, and depart from what it
regarded as "loose analogies" devised in the Title
II Order. "Because broadband Internet access service was
not directly addressed in pre-1996 Act Computer
Inquiries and MFJ precedent, analogies to functions that
were classified under that precedent must account for
potentially distinguishing characteristics" as they
relate to "technical details" and "regulatory
backdrop." Id. These claims are not
unreasonable. Whatever the Commission's prior views on
the relationship between basic services and their
adjuncts, it is reasonable for the Commission to say that
that rubric need not transfer over neatly to what it claims
is not a basic service-broadband Internet access.
See id. ¶ 40 n.139. Hence there is little basis
for the claim that adjunct-to-basic lore requires the
Commission to jettison the lesson of Judge Greene's TDD
ruling. See Western Elec. Co., 1989 WL 119060, at
*1; see also Mozilla Br. 44.
the Commission identifies precedent from the Computer
Inquiries themselves to support a reading of the TME as
requiring location of particular services on a spectrum
running between utility to carriers and utility to end users.
A ruling invoked by the 2018 Order allowed BOCs to enable the
tracing of Emergency 911 ("E911") calls to the
right location. The FCC's Common Carrier Bureau said:
Although the "telecommunications management
exception" encompasses adjunct services, the storage and
retrieval functions associated with the BOCs' automatic
location identification databases provide information that is
useful to end users, rather than carriers. As a consequence,
those functions are not adjunct services and cannot be
classified as telecommunications services on that basis.
272 Forbearance Order, 13 FCC Rcd. at 2639 ¶
18; see 2018 Order ¶ 38 n.131. While the Title
II Order had sought to distinguish this precedent on the
ground that the benefit of E911 service was "unrelated
to telecommunications," Title II Order ¶
368, it does not seem unreasonable for the current 2018 Order
to assume a broader view of telecommunications in its
invocation of this precedent.
in any case, we are satisfied with the agency's refusal
to treat DNS like speed dialing, call forwarding, and
already noted, the Commission has adequate grounds not to
hold its interpretation of the TME hostage to a chimerical
hope for a perfect match-up with adjunct-to-basic precedent,
in part because the regulatory history is so convoluted as to
render the likelihood of a "perfect" matchup
remote. So even if the Commission's interpretation of the
TME comes at the cost of certain incongruities with the
concept of adjunct-to-basic services, it reasonably regards
alignment with the text and purposes of the 1996 Act, and the
unifying policy vision animating the 2018 Order, as more
weighty factors. See 2018 Order ¶ 39.
implicit in the Commission's analysis is a recognition of
a key difference between the above services and, at the
least, DNS. Those other services are plausibly described as
adjunct-to-basic, i.e., "ancillary" and
"optional" in relation to telephone service.
Centrex Order, 3 FCC Rcd. at 4389 ¶ 30 (quoting
Second Computer Inquiry, 77 F.C.C.2d at 421 ¶
98); cf. 2018 Order ¶ 40 n.138. Not so, the
Commission says, for DNS, which "[f]or an Internet user
* * * is a must." 2018 Order ¶ 34
(quoting Brand X, 545 U.S. at 999) (emphasis added)
(internal quotation mark omitted). So DNS might well be seen
to "alter the fundamental character of [the]
service," and would thus fail to satisfy one of the two
criteria specified by the Commission (and quoted
above) for a service to qualify as adjunct-to-basic.
Operator Services Order, 11 FCC Rcd. at
6816–6817 ¶ 16. This seems to distinguish DNS from
such functions as speed dialing, call forwarding, and
directory assistance, and thus square the Commission's
current treatment of DNS with the Commission's prior
treatment of those services as adjunct-to-basic, consistent
with Judge Greene's treatment of a certain type of
directory assistance as falling within the TME. See
Western Elec. Co., 1989 WL 119060, *1 n.7; Mozilla Br.
44–45. (While some adjunct-to-basic services seem
non-optional in certain respects, like "communications
between a subscriber and the network itself for call setup *
* * [and] call cessation," Centrex Order, 3 FCC
Rcd. at 4386 ¶ 11, this point simply reinforces the
miscellaneous nature of the adjunct-to-basic category, where
"it is difficult to discern any clear policy,"
American Tel. & Tel. Co., 454 F.3d at 333.)
the above considerations sufficient to uphold the
agency's position and hence do not address analogies to
other MFJ precedents on technologies and services. See
2018 Order ¶¶ 35, 43–44. Even if
Petitioners offer plausible interpretations of rulings on
address translation and third-party storage services provided
by the BOCs, we believe the Commission has given a
sufficiently sturdy justification for treating DNS and
caching as non-TME services apart from other MFJ-linked
analogies. It has set forth a plausible reading of the highly
ambiguous TME, adequately explained its basis for giving more
credence to judicial MFJ precedent than to the Computer
Inquiries in this context, and made a reasonable case as
to why DNS and caching need not be classed under the TME.
then open a new-and final-line of attack: Even if
DNS and caching are "information services," the
Commission's reliance on them to classify broadband as an
"information service" was still unreasonable.
Mozilla Br. 46. They make three arguments in support of this
thesis, but none holds water. As a threshold matter, we note
that Brand X already held it reasonable for the
Commission to conclude that DNS and caching are information
services functionally integrated with the offering of
"Internet access [service]" "to members of the
public." Brand X, 545 U.S. at 1000 (quoting
Stevens Report ¶ 79).
first play up the facts that users may obtain DNS from
providers other than their ISPs and that caching is not
utterly indispensable. According to them, because "a
user can easily configure her computer to use a third-party
DNS server and content can be delivered even without
caching," Mozilla Br. 46, especially in the context of
encrypted communications that occur without caching,
id. at 46–47, it follows that DNS and caching
are not "inextricably intertwined with the transmission
component" of broadband, id. at 46. These facts
ostensibly yield a "contradict[ion]" in the
agency's position, since one's ISP-provided DNS and
caching are not "indispensable" after all.
the objection misguided. As the Commission explained,
"[T]he fact that some consumers obtain [DNS and caching]
from third-party alternatives is not a basis for ignoring the
capabilities that a broadband provider actually
'offers.'" 2018 Order ¶ 50. Given
the ambiguity in the term "offe[r]," see Brand
X, 545 U.S. at 989–990, the Commission's
preferred reading of that term rather than the Title II
Order's "narrower interpretation," 2018
Order ¶ 50-which would foreclose the
Commission's view quoted above-is permissible. In
elucidating the ambiguity, Brand X said that
"[t]he entire question is whether the products here are
functionally integrated (like the components of a car) or
functionally separate (like pets and leashes). That question
turns not on the language of the Act, but on the factual
particulars of how Internet technology works and how it is
provided, questions Chevron leaves to the Commission
to resolve in the first instance." 545 U.S. at 991. The
agency reasonably concluded that, notwithstanding the
availability of alternative sources of DNS, a market where
"the vast majority of ordinary
percent"-"rely upon the DNS functionality provided
by their ISP," 2 ...