OA64: How "Net Neutrality" Became "Selling the Internet" - A Choose-Your-Own Adventure, Part 1

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:01:17 Thomas: Hello and welcome to Opening Arguments. This is episode 64. Oh, I like that number. Nice square number. And I'm your host, Thomas Smith, and I'm a nice square host. And that's another square host, Andrew Torrez. How are you doing, Andrew?

0:01:31 Andrew: I am two to the eighth power of greatness today. So, no.

0:01:35 Thomas: Wait, is that right? Two, two, two.

0:01:37 Andrew: I guess. That's too many two to. Eight is five, five, twelve isn't it? Two to I don't know, whatever, I know it's a, I know it's an early computer number, right?

0:01:38 Thomas: Yeah. See, let's see. Two, four, eight, 16. Wait, are you at 32? No, it's two to the sixth. 26th.

0:01:50 Andrew: To the sixth, right. There we go, yeah.

0:01:51 Thomas: Okay. So you're way ahead of us. You're on OA episode 512 or something. So there you go. You meant eight to the second power.

0:01:53 Andrew: Right. Let's with that.

0:02:02 Thomas: Either way, you sound like you're doing great.

0:02:06 Andrew: I am.

0:02:08 Thomas: I'm excited for today's episode. I'm very excited. Excited about this episode than and I think I've seen you about any episode, besides maybe the Hillary emailed one, which was great. So that's a good sign. I can't wait. Let's get on over to our first segment, though, which is a listener question.

0:02:26 Clip: He who questions training, only trains himself at asking questions. What?

0:02:34 Thomas: All right, listener Eric Brewer. You may know him from such... You may know Eric Brewer from previous episodes where he's asked questions. He asks a lot of questions. Thank you, Eric. In response to TTTBE number 18, he asked, I thought an LLC was a corporation. That was the one that had diversity of, what is it called again?

0:02:56 Andrew: Complete diversity for federal jurisdiction. That's

0:02:57 Thomas: Complete diversity for federality. That's right. And part of the question hinged on the fact that an LLC wasn't a corporation, so this is a question that you may have even answered before, but we could always use review. What is the difference between an LLC and a corporation? Get

0:02:58 Andrew: Exactly right. Yeah. So an LLC is a limited liability company. I A lot of people, even a lot of our lawyer listeners who do not practice civil litigation, were shocked to find out that unincorporated associations do not qualify as citizens in the place of their organization, organization. Um, so this is when we, when we did the early answer to TTTBE number 18 for our patrons, I included a smiling picture of Mitt Romney, uh, because, uh, his dictum of "corporations are people, my friend," uh, was really the key to answering the question. Um, corporations are people, LLCs are not people. Um, and they, uh, they do not enjoy that same level of, of, of right. Um, now let me say, on a a practical level, um, respect to most of my clients, uh, who tend to be small business clients.

0:04:06 Andrew: Um, and most of the people listening to the show, although I, you know, I would be pleased if we have, you Know, the CEOs of fortune 500 companies listening to this show. Um.

0:04:15 Thomas: On Patreon, CEOs. We have a special CEO level, $1,000 and up patron. The red carpet, everything, yeah.

0:04:24 Andrew: That, look, if you have, like you and I do, Thomas, you know, if you've got a small business, an LLC is going to be the appropriate organizational vehicle for you, because the thing that you care about is likely to be what I'm about to talk about, and you will not care about the diversity question. Because, if you, if you recall, in the bar exam question, you had a three member LLC with the members were in Pennsylvania, Vermont and Ohio. The LLC was organized in New York. And so the question was, where is the LLC a citizen? And the answer is Pennsylvania, Vermon, Ohio. If you have a one member LLC in California, as I know you do, Thomas, and you also live in California. Then that inquiry is the same. Right. Like you are not you're

0:04:38 Thomas: Hmm, sure. Yeah, I

0:05:19 Andrew: Losing nothing in terms of the diversity question. And the advantages of forming an LLC are as follows. An LLC counts as, gives you the same level of protection as a corporation in terms of interposing liability between you and a potential plaintiff, right? So in other words, Opening Arguments is a production of Opening Argument's Media LLC. If we incur liabilities in the course of doing the show, somebody would have to bring a lawsuit against the LLC, against Opening Arguments Media LLC, and not against you and I as an individual, right, that's the whole limited liability part. And that's what most people care about.

0:06:05 Andrew: It also has the same qualifications as a corporation for purposes of holding out to third parties, getting business banking accounts, all of the kinds of things that your average small business person needs. And the advantages of an LLC over a corporation for a small business are follows. Number one, you can elect your tax treatment. I'm not a tax person, so we've had our accountant, Tony DeFata, on the show. Give Tony a call and ask him. But you get the flexibility of choosing. You can choose to be taxed as a corporation, even if you're an LLC. Uh, and most states, uh, have a conversion statute. There's a uniform conversion statute. You go in, you can convert an LLC into a corporation or any other form, uh, at, will, uh, when you, when you pay the fee. Um, the reason not to start, so you know, you start off a small business, you get huge, you want to issue stock, you convert it from an LLC to a corporation, uh, and that has legal effect and that is facilitated. It's really, really easy.

The reason not to start off as a corporation is that that preferential tax treatment for corporations often doesn't apply when you're talking about, you know, a small business without employees or assets or things like that. And generally speaking, to run a corporation requires more stringent reporting requirements, right?

0:06:40 Thomas: See.

0:07:27 Andrew: Like you got to have quarterly meetings and a board of directors and all sorts of other stuff. And an LLC, you don't have to have anything other than your LLC filing. That's kind of the trade-off. LLC gets you most of the protections of a corporation, gives you the flexibility in almost every state to turn into a corporation. It's more informal, it's cheaper, it generally has, it is easier to start up, and you don't have the recording and recordation requirements that, um, that, that have tripped up a lot of people. So, uh, but, but you don't, if you have a big complicated organization, uh, you lose the, uh, corporations or people, my friend, LLCs are not. So, uh, I, I just thought that was a, really a lot people asked about the question, uh, and, and I always find it fascinating when our listeners get into, like, the minutiae of, uh, business organizations, uh, it, it never fails to amaze me that what our listeners find interesting. So, so thanks to Eric for the question.

0:08:28 Thomas: Yeah, absolutely. And I, you know, I wish it was the other way because then I'd be doing one better on the bar exam. But what can we do? The law is what it is and I can't change it. So, all right. Right, uh, thanks for that question, of course, Eric, as always, and onward to the rest of the show.

0:08:52 Thomas: All right. Time for our main segment. I'm very excited because of how excited you are. Your excitement is contagious, Andrew Torrez. And the title we've got here is How Net Neutrality Became Selling the Internet. I think this relates to a lot of people have asked us about this. Didn't the Republicans just sell out our browser history? It's related to that, right? Oh, okay, really?

0:08:52 Andrew: Here go. Yeah. Yes.

0:09:13 Andrew: It, it absolutely is. Um, so let me give you the punchline first. Okay. Um. The Selling the Internet bill is Senate Joint Resolution 34. It has been signed into law. It is law. In fact, this procedure was signed into law using the Congressional Review Act that we discussed one week ago. Yeah, it used that procedure. Um.

0:09:34 Thomas: Ooh, what a twist.

0:09:36 Andrew: For a, for a joint resolution of disapproval, uh, and SJR 34 is one line long. It says, "Resolved, that Congress disapproves of the rules submitted by the Federal Communications Commission relating to protecting the privacy of customers of broadband and telecommunication services, and such rule shall have no force or effect." So the

0:09:36 Thomas: Can I ask though, while we're on that, because, we because fresh on my mind, kind of, from last week is this, uh, Congressional Review Act, was this one of those ones that was a newer rule that they just did this for, or was this one of those ones that was left over from long ago or something, where they were able to squeeze it in with this Congressional Review Act? Okay.

0:10:01 Andrew: Yeah, remember you have, so it's a relatively newer rule. The rule was passed December 2nd, 2016, and you have 60 days of Congress. Congress.

0:10:27 Thomas: Of Congress.

0:10:30 Andrew: And so, yeah, Congress never does any work. So they were able to pass this resolution of disapproval in the early session, even though it was three or four months out. It fit within the period, thanks to the way in which Newt Gingrich wrote the bill. So what we have is a rule by the outgoing Obama FCC that was never put into effect. And this Republican Congress used the CRA to disapprove of that rule. And so we're kind of back to the status quo, right? So on the one hand,

0:10:30 Thomas: Yeah, which is like two years yeah. Yeah. Interesting.

0:11:06 Andrew: The hysteria you've seen, right, that says the Senate just passed a bill, it was just signed into law, that sells off your internet browser history to the highest bidder. I mean, I just literally, I read the entirety of the law, right? Some laws are 500 pages long, this law is one sentence long. Um, that's, yeah.

0:11:24 Thomas: Well, at the same time, it doesn't sound great for it to say we reject this rule that protects your internet history. So.

0:11:32 Andrew: I agree, I, I agree with that. I agree with that, uh, it, certainly is not the case that, uh, SJR 34, four, affirmatively did the things that people have claimed it did. Now, the question is, why did the FCC pass that particular rule in 2016? And in what way did the landscape change in 2016 that made passing that rule necessary? And that's what this show is going to be about. So I have decided the best way to do this show is as a choose your own adventure. What we have is we have two trains. I'm going to tell you again, I already gave you the punch line. The punch line is FCC

0:11:32 Thomas: Okay. All right. Accused it did, okay. Yeah.

0:12:13 Andrew: Makes a rule and the and the Senate using the CRA then with approval from the House disapproves of that rule, blocks it from going into effect. I'm also going to tells you what happens, which is you're going to board one of these two trains and they are going to collide with each other. So you can pick the Federal Trade Commission.

0:12:32 Thomas: Well, it doesn't sound like either train really is a good pick then, but, okay, sure. But

0:12:36 Andrew: You can pick either the Federal Trademark Commission, the FTC, and get on board that train. Or you can you can take the Federal Communications Commission, the FCC, and get onboard that train so which train do you want to board.

0:12:48 Thomas: I don't have a lot of information to go on with this. What am, what is, what is my goal in choosing my adventure? What am I trying to do here? Am I trying to have the most adventuresome adventure?

0:12:57 Andrew: You are trying to protect the right of consumers on the Internet.

0:13:03 Thomas: Okay. So, I so that's my goal. Hmm. So Federal Trade Commission or federal, well, I mean, I, I, sorry to be obvious, but the FCC seems like the the way to go there, and and it sounds like that is where the rule was, so we'll see where this leads. Do I have to roll a die? Hold on, let me roll. Here, we make a sound effect. Okay, roll.

0:13:03 Andrew: Yeah. OK. OK, Okay. So, yeah. Nice.

0:13:23 Thomas: To five. What does that give me?

0:13:25 Andrew: Gets you the FCC. Okay. Our story begins with our kind of guy, and his name is Tim Wu. And I want to say I reached out to Tim Wu, told him we were going to do this story, and invited him to be on the show. I haven't heard back yet.

0:13:39 Thomas: Darn.

0:13:39 Andrew: Um.

0:13:39 Thomas: It sure.

0:13:39 Andrew: So, you know, if Tim wants to come on the show, uh, I would love to have him. Let me tell you a little bit about Tim, okay? Uh, in 2014 he ran for lieutenant governor of New York, uh, he was endorsed by the New Yorg Times, he was endorsed by the Daily Kos, uh, he ran the lefty campaign, he ran to the left of, uh, Kathy Hochul, who was the eventual candidate, she was widely perceived as a conservative Democrat. He ran on the ticket with our friend Zephyr Teachout, whom you might remember from our episode with Seth Barrett Tillman. They ran a very, very liberal campaign. He lost in the primary 60-40. Before Wu was a political candidate, he was a lawyer. In fact, he was the year behind me at Harvard Law School.

0:14:25 Andrew: He graduated from Harvard Law School in 1998. Then he clerked for Richard Posner on the Seventh Circuit, and you might remember Posner from episode 60. He wrote a concurrence in the Hively case in which he made fun of originalism. It's a terrific—we spent more time, because I think it's more influential, on the Flaum and Ripple concurrence, which is the very moderate concurrence. Posner's concurrence is hilarious in Hively. I mean it says like, "Well, a diehard quote originalist would argue that what was believed in 1964 defines the scope of the statute for as long as the statutory text remains unchanged, and therefore until changed by Congress's amending or replacing the statute." You. But as I noted earlier, statutory and constitutional provisions frequently are interpreted on the basis of present need and understanding, rather than original meaning.

0:15:16 Andrew: Think, for example, of Justice Scalia's decisive fifth vote to hold that burning the American flag as a political protest is protected by the Free Speech Clause of the First Amendment, provided that it's your flag and it's not burned in circumstances in which the fire might spread, Texas v. Johnson, U.S. v. Eichmann. "Burning a flag is not speech in the usual sense, and there is no indication that the framers or ratifiers of the First Amendment thought that the word speech in the First Amendment embraced embraced flag burning or other nonverbal methods of communicating." That. There's more. I mean, the entire opinion just makes fun of originalism.

But I love him calling out Justice Scalia for being inconsistent with the original meaning of the first amendment. There's a second about think of how the term cruel and unusual punishments has morphed over time. I mean, this is clearly somebody who feels about Justice Scalia the way I do. So that's quite a change, as I as I believe I mentioned to you when I was in law school, Richard Posner was considered one of the most conservative judges in the country. He's he was on the Seventh Circuit at the time, is still there now. Um, he has a philosophy of um a law and economics based approach, which is too much to get into here, but um it

0:15:55 Thomas: Interesting.

0:16:30 Thomas: As I say now it feels like the adventure I chose was a long and unrelated story about somebody that I didn't know was involved Okay, well Great All right What if I roll a seven? No Let's See I'm gonna roll a seventh

0:16:36 Andrew: Is it is Yeah Okay Right Go ahead So here's here's what I want you to take away that's a plum clerkship, right, particularly 1998, that was one of the top five non-Supreme Court clerkships. And therefore, one of the top 14, 15 clerkships in the country that you could get. So Wu is clearly smarter than me, a better lawyer than me.

0:17:00 Thomas: Woo, if you'd like to replace Andrew on the show, let me know.

0:17:03 Andrew: He's also a lawyer who specializes in the Internet. And in 2003, he invented the phrase net neutrality. He wrote an article called Network Neutrality Broadband Discrimination. So he's the guy who invented that phrase. And what exactly is net neutrality? I'm going to quote from the U.S. Court of Appeals for the D.C. Circuit in a 2014 case called Verizon versus FCC. To talk about the merits of that case in a minute, but I really like the way they set this up because it made sense to me, and this is not my area of expertise. Here's what the Court of Appeal says.

0:18:07 Andrew: In the Internet's early days, most users connected to the Internet through dial-up connections over local telephone lines. But today, access is generally furnished through broadband, i.e., high-speed communications technologies such as cable modem service. Okay, so those are the first two terms, backbone broadband providers. Edge providers are those like Amazon or Google who provide content services and applications over the Internet, or like the Opening Arguments podcast. While end users are those who consume edge providers' content services, and applications.

So to pull the whole picture together with a slightly oversimplified example, when an edge provider such as the opening arguments podcast transmits some sort of content to an end user, that content is broken down into packets of information, which are then carried by the edge providers local access provider to the backbone network, which transmits those packets to the end users local access provider, which in turn transmits that information to the End User, who then hopefully enjoys the content, which our show, we hope they do. So that's how the internet works. Proponents of net neutrality worry about the relationship between broadband providers and edge providers.

They fear that broadband providers might prevent their end-user subscribers from accessing certain edge providers altogether, or might degrade the quality of their end user subscribers access to certain edge providers, either as a means of favoring their own competing content or services that it would enable them to collect fees from certain edge providers. So let me give you two examples of that. Thus, for example, a broadband provider like Comcast might limit its end user subscribers ability to access the New York Times website if it wanted to spike traffic to a different news site that it owned. Or Comcast may degrade the quality of a connection to a search website like like Bing, if a competitor like Google paid for prioritized access. Right. So the idea is the broadband providers.

0:19:56 Thomas: Interesting. And I think it happened with Netflix. Like there was a chart that I saw that showed like how fast Comcast users could access Netflix content. And then when they reached some agreement, it like spiked up. So that, I don't know. I don'T know how well sourced that was, but that was something that I saW that people alleged. All

0:19:58 Andrew: Yeah. Yes. Right? Yeah, that is exactly the allegation, right? Comcast is an alternative means of providing and TV shows. They slowed down the speed. They were alleged to have slowed down by which you could access Netflix over Comcast until Netflix paid them some money, right? So deal with this problem, the FCC promulgated something called the Open Internet Order of 2010. There were previous efforts at this, but I just want to cut to the chase, right, and you remember the FCC is an administrative agency, so it has rulemaking authority delegated to it by Congress. The Open Internet Orders of 2010 is a 194-page document, it.

Uh, but fortunately, yeah, but Fortunately, it can be summarized down into three things. Okay, those three things are: one, transparency, fixed and mobile broadband providers must disclose their network management practices, performance characteristics and terms and conditions of their broadband services. Okay, to no blocking, fixed broadband providers may not block lawful content, applications, services or or non-harmful devices, and mobile broadband providers may not block lawful websites or block applications that compete with their voice or video telephony services. And three, no unreasonable discrimination, fixed but not mobile broadband provider, providers may not unreasonably discriminate in transmitting lawful network traffic. So okay, now you look at that document there, you might have some, some questions, right?

0:20:55 Thomas: Right, let's read it. Here we go. Dive in.

0:21:44 Andrew: Like why are we treating mobile broadband different than fixed broadband? Um, But that document was considered a victory for proponents of net neutrality, right? Those three principles address the kind of problems we were talking about. And so what happened, remember I read you from the Verizon v. FCC lawsuit, Verizon sued the FCC. And they requested a declaratory judgment that the FCC did not have the power to promulgate that open Internet order. And and Verizon made six different arguments with respect to why the FCC lacked the power. And I want to go super, super briefly to show how almost all of these were loser arguments.

0:22:31 Andrew: OK, so the first argument was that Congress did not delegate authority to the FCC to issue this kind of broad sweeping dictum about the Internet in the Telecommunications Act of 1996. And Section 706A and B of that act says, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment,

0:23:27 Thomas: Sounds like a loser argument, Like you said, sounds like They have the authority based on that. Well,

0:23:28 Andrew: Yeah, and yeah, I could go through, I'm not going to read subsection B. Verizon's challenge were that those two provisions, quote, amount to nothing more than congressional statements of policy. Verizon further contends that even if either provision grants the commission substantive, the scope of that grant is not so expansive as to permit the commission to do something as wide ranging as the Open Internet Order. And the court said, no, you could read it that way, but it's also the language, quote, can just as easily be read to vest the commission with the actual authority to utilize such, quote, regulating methods to meet the stated goal. And I think that was when you decided this was a loser argument, right, when it included that catch-all phrase of other regulating methods. I think that's right, and it shows how you're starting to think like a lawyer.

0:24:19 Andrew: So first argument goes away. Second argument Verizon made, and I think this is relevant to our discussion of Hively decision, actually, was subsequent net neutrality laws that were proposed but never passed by Congress meant that the act didn't cover it, right? Right. And as you may recall, at this time that the FCC had promulgated this rule, there was still a lot of agitation over net neutrality. And there were a number of bills that were introduced in Congress that would have tried to to pass by law some kind of net neutrally.

0:24:56 Thomas: That's interesting, why would that imply, is that still an argument that the FCC, this is all in the category of the FCC doesn't have congressional authority To do This, right? So Why would an argument that, so I'm not convinced by this argument, you can tell me if I'm wrong, because it, it doesn't imply to me that if Congress wants to specifically make the FCC, or or make a law about net neutrality, that that therefore means the FCC didn't have the authority to Do so, okay

0:25:06 Andrew: Yes. And here's why.

0:25:27 Andrew: So here's here's the argument. OK, and I think that's I that's incisive. But but here's here's the argument. The FCC only has the power specifically granted to it by Congress. If Congress granted to the FCC the power to to essentially enforce net neutrality, then after the FCC promulgated a rule of net neutrally, it would be nonsensical for Congress to also pass net neutrality on its own, right, because the FCC has already done it, you don't have to do it from a legislative basis if you have granted the FCC sufficient authority to do it for you. Make sense? Okay.

0:25:40 Thomas: Okay Yeah

0:26:11 Andrew: So If we can show that there were, this is Verizon's argument, if we can showthat after 2010 there were bills that were introduced in Congress to do what the f cc said it it had already done, then by definition, that would mean that authority was never delegated to the FCC in the first place, because certainly Congress knows what it's delegating? That's the argument.

0:26:12 Thomas: I Would want to make a counter Argument of who Knows if Congress even knows what the hell's going on. I don't know. Oh,

0:26:37 Andrew: Sure, that, and, and oh, I'm so glad you interjected that, because here's what the D.C. Circuit said. Such subsequent legislative history, however, provides, quote, an unreliable guide to legislative intent, end of quote. So that's pretty much the D.C. Circuit saying, who knows what the hell. Right. Like, you know.

0:26:46 Thomas: Great, yeah There could be political reasons why you introduce something, there could could be lots of reasons. It could be ignorant reasons why you introduced something. Who knows? It's like, it's like if, if the, when the first amendment defense, you know, was introduced, like if that meant that there was no first amendment or something, it was like, well, they also could be wrong about that.

0:27:07 Andrew: Yeah. Yeah, well, and and and it is as the court then then gives a second argument, which introduces a fact that you didn't know. But I think kind of conclusively shuts the door here. Even assuming that Congress's failure to impose such restrictions would cast light on Congress's understanding of the commission's power. Any such inferences would be countered by Congress's similar failure to adopt a proposed resolution that would have specifically disapproved of the Commission's promulgation of the open Internet order.

0:27:46 Thomas: Yeah. Good point.

0:27:47 Andrew: See House Resolution 37 from 2011, right? So yeah.

0:27:51 Thomas: All right. So does this mean argument two of six out the door? All right, here we go.

0:27:53 Andrew: Yep. Two of six also, out the door. We're going to do three and four together.

0:27:59 Thomas: Good.

0:27:59 Andrew: Verizon makes two additional arguments regarding the Commission's interpretation of 706b, which we can dispose of in relatively short order. First, Verizon contends that if 706 b gives the Commission any regulatory authority, that authority must be understood in connection with the later section, which directs the Commission to, quote, "compile a list of geographical areas that are not served by any provider of advanced telecommunications capability." Thus, Verizon claims, any regulations that the Commission might adopt pursuant to 706b may not reach beyond any particular geographical areasthat are not served byany broadband provider and apply throughout the country by its own terms. However However, Section 706C simply describes part of the inquiry, not all of it. So that's a garbage argument.

0:28:45 Andrew: Argument number four, Verizon asserts that a prior finding that the grant of regulatory authority arbitrarily convened five prior agency determinations of reasonable and timely deployment. And here the court says, the timing of the Commission's determination is certainly suspicious, coming as it did closely on the heels of our rejection in a prior case of the same theory of net neutrality. But questionable timing by itself gives us no basis to reject an otherwise reasonable finding. Beyond its general assertion that the Commission's finding was, quote, "arbitrary," Verizon offers no specific reason for thinking that the Commission's logical and carefully reasoned determination was illegitimate. We can see none.

This is going going to be important, uh, even though I know it seems really sort um of tangential at the moment, but basically um the Commission had, uh, previously made opposite findings. They changed their mind in order to promulgate the 2010, uh, Open Internet rules, uh, and Verizon was like, well, this seems kind of suspicious, uh, the court says yeah, timing seems a little weird, uh, but, uh, it It looks fishy is not a good enough argument. Commission can change its mind. OK, now last the last of these arguments about the statute, right, is that it is beyond the scope.

OK, it says Verizon argues that the open Internet order regulation will not meaningfully promote broadband deployment. And even if they do advance that goal, the manner in which they do so is too attenuated from the statutory purpose to fall within the grant of authority. And this is a good argument, right? This says, look, remember the grant of authority. Yes, it uses the phrase other regulatory action. But Verizon was saying, look even if all that other stuff, even if those first four arguments fail, remember that they only get the catch all other regulation insofar as the regulations are necessary to promote the deployment of broadband, right.

0:29:53 Thomas: Okay.

0:30:44 Andrew: Right. Remember that the operative phrase in the statute was remove barriers to infrastructure investment and net neutrality doesn't really see it. Right. It's a that's a limitation on what broadband carriers can do. So it doesn't Really seem pro broadband. Right. It seems anti broadband.

0:31:03 Thomas: Interesting.

0:31:04 Andrew: And So, and Verizon then called this a triple cushion shot. The idea is that the justification for increasing the user's ability to receive the Internet, you know, was like a shot in pool that bounces off of three rails. Right. And the court says, in billiards, however, a triple cushion shot, however perhaps more difficult to complete, counts the same as any other shot. The commission could reasonably have thought that its authority to promulgate regulations that promote broadband deployment encompasses the power to regulate broadband providers' economic relationships with edge providers if, in fact, the nature of those relationships influences the rate and the extent to which broadband providers develop and expand their services for end users.

0:31:50 Andrew: So that's got a nice legal practice tip in there for you that if you set up an analogy with the court, like make sure it's a good one. You don't you don't want to. But that disposes of argument number five. And that leaves us with literally. Go ahead.

0:32:06 Thomas: I, well I don't want to stretch this out, I guess, but how do you feel about that one? Because that argument seemed a little more solid to me, and the answer essentially seemed to be, well, the FCC thinks it can do this. Am I wrong?

0:32:07 Andrew: Yeah. No, no.

0:32:18 Andrew: Yeah, it I think that's right. Right. That that keep in mind impression that I wanted to leave.

0:32:23 Thomas: Do they is the burden on Verizon more, and that why that's why is

0:32:27 Andrew: For the statutory part. I omitted this. But our friend Chevron deference comes in. Right. Like in terms of how far the statute extends, the court said you might remember they just said, well, look, it is capable of multiple meanings. That means it's ambiguous. Therefore, we defer to the agency's interpretation of its own regulations unless clearly erroneous. So on the one hand, Verizon had a much higher burden of proof on those statutory arguments. With respect to whether it promoted competition, the court didn't explicitly apply the Chevron deference standard, but I think it's a reasonable interpretation to say, yeah. Yeah.

I mean, the court was essentially saying no matter how attenuated it seems, we're going to defer to the agency's evaluation that this is ultimately pro-competitive for broadband service providers, even though it is a restriction on broadband service providers. But I agree with you, right? It sort of shows you how far the court is kind of bending over backwards here to let the FCC promulgate the rule. And that's why the treatment of argument number six is so surprising. So again, keeping in the spirit of choosing your own adventure, I'm going to let you skip to the end. And I'm gonna tell you the punchline, which is the court rules in favor of Verizon on last ditch argument number six, after

0:33:00 Thomas: Okay.

0:33:57 Thomas: So Sure.

0:33:57 Andrew: After bending over afterwards for the FCC, uh. And I will tell you argument number six is a very, very technical argument. Um. But it's important for the story. So I'm gonna, I'm gonna try and walk through it even though there's some stuff that otherwise I would skip on the the show. Okay. Um, so though the statute, the Communications Act, grants the commission the authority to promote broadband deployment by regulating how broadband providers treat edge providers. The argument here was that the commission may not utilize that power in a manner that contravenes any specific prohibition contained in any other section of that Communications Act. So the argument, according to Verizon, again, I'm quoting from the decision, is the commission has done just that because the anti-discrimination and anti-blocking rules, those were numbers two and three, subject broadband Internet access service to common carriage regulation, a result expressly prohibited by the Act. Now, what is common carriage legislation?

0:34:12 Thomas: Sure.

0:34:58 Andrew: And the answer is, is not even the court really knew what that meant. The court says, offering little guidance as to the meaning of the term common carrier, the Communications Act defines that phrase somewhat circularly as any person engaged as a common carrier for hire, for 47 USC 153(11). Courts in the commission have therefore resorted to the common law to come up with a satisfactory definition. In the 19th century. Now, keep that in mind.

0:35:24 Thomas: Yeah.

0:35:24 Andrew: In the 19th century, American courts began imposing certain obligations conceptually derived on the traditional legal duties of innkeepers, ferrymen and others who serve the public on companies that were in the transportation and communications industries. So in other words, right, we've got the 1800s, courts took the 13th century law, I'm not kidding about this, about what innkeepers had to do when you like showed up on your horse at an inn in the middle of nowhere, and applied

0:35:26 Thomas: What was their internet like, okay, yeah, very relevant. Yeah, you have to give

0:35:58 Andrew: Those and said, basically, you're a common carrier. You are serving the public. And if I'm traveling from, and I don't know, places in 13th century Anglia, but, you know, yeah, that, you Know, you might only have one in that's a stopover between, you you know, one part of Saxony and the other part of Saxony, right? And so they impose certain legal duties on them. And then as we got transportation industry in this country and then later communications industries, they applied those principles to those kinds of industries. So here's what the court says. We think it obvious that the commission would violate the Communications Act were it to regulate broadband providers as common carriers, given the commission's still binding decision on itself to classify broadband providers not as providers of telecommunications services, but instead as providers of information services. And the significance is a telecommunication carrier is defined in the law as shall be treated as a common carrier under this act, only to the extent that it is engaged providing telecommunication services.

0:35:59 Thomas: Them the wi-fi password.

0:36:13 Thomas: Why not? Gosh, I thought I had an expert on here. All right. Fine. Sure. Yeah.

0:37:13 Andrew: So I don't want to get into the history on that because it would require another hour. But basically, the FCC previously said, we're going to look at ISPs. We're goingto look at broadband providers as providing information services and not telecommunications services. Therefore, they're not common carriers. Okay. And so then the the question is not whether, absent the open Internet order, broadband providers would or did act as common carriers. Rather, the question is whether, given the rules imposed by the open internet order, broadband providers are now obligated to act as commmon carriers. OK.

So in other words, I realize we've been through a lot of like crazy 13th century law here. For this purpose of the sixth argument, What, what the court was saying is, hey, FCC, you've previously told us that you think of broadband providers as providing information services, not telecommunication services. They're not common carriers. They're not subject to this general duty that we impose on innkeepers in the middle of the desert. So the question is, if your order would essentially make Internet providers, broadband providers, act as common carriers, then that would go too. That would exceed your statutory limits by your own terms, because you've told us they're not common carriers.

So the question is, do these rules essentially treat you as a common carrier? And again, the FCC went back and forth over whether they categorized broadband providers as common carriers. The court said that was perfectly fine, but in 2010, at the time that the open Internet order was provided, that's why "now" was italicized in the last paragraph, was that broadband providers were not common carriers.

0:38:59 Andrew: So ultimately, the court said, you know what? The no blocking and no discrimination rules are duties of common carriage. If the FCC had classified broadband providers as common carriers, everything would have been OK. But they didn't. They classified them as information providers. So that exceeded the authority. And they struck down those two provisions conclusions of the open internet order of 2010. They left intact the transparency rules because nobody argued that one. So now it's 2015. The Republicans control the Senate. The DC circuit in FCC versus Verizon has just gone through every possible argument, has mostly said, FCC, you could do this, you can do this.

0:39:49 Andrew: But then they pull the rug out from under you at the last minute because internet providers are classified as of information services, not as common carriers. Republicans control the Senate so you can't pass a law. Do you do?

0:39:58 Thomas: Oh. Well, We know what, or no, we don't know. You said 2015, didn't you? Oh.

0:40:09 Andrew: Yeah, so this case ends in 2015, right? Do do you? You can't pass a law to change. You can't pass net neutrality by law. You can't amend the Communications Act. But the D.C. Circuit has basically said, it's why we went through all the arguments. Guys, we're trying to help you out here. You've got the power. You just have to. And what do you want to do?

0:40:13 Thomas: Yeah.

0:40:33 Andrew: OK. And and what would you do in that rule?

0:40:31 Thomas: Another rule, a different rule Oh, is it gonna classify them as common carriers?

0:40:37 Andrew: Exactly. Exactly right. Right. Yeah. Yeah. It's not, there's not, I was not trying to ask you a trick question. Yeah. I know, we're going to turn to that section in choose your own adventure. Uh, yeah, right, I didn't say, look, this is an adventure in the law, yeah, what do you do? And the answer is, yeah, right, we can't pass a law, but the FCC can, as it did in the past, right? It can change its mind a second time, and it can say, you know what, uh, we were wrong, as it

0:40:37 Thomas: Yeah. Okay. Good. I'm never sure with you, I feel like I didn't have much of a choice in that adventure, but okay, if I had chosen something else, would you have created an alternate history? And our, yeah, anyway, God, we

0:41:12 Andrew: Turns out, yeah, as it terms out we're wrong and broadband providers are common carriers after all, and guess what, it just so happens that if we interpret them as common carriers, then, um, every other aspect of the DC Circuit's opinion says we can do this, and we can repromulgate net neutrality. And it'll be totally fine, let's do. And by the way, it's why I went through the whole timing argument. The FCC has also said you can't really make an argument that we're doing this as a pretext, or that there's something suspicious about that. Even if there is, as long

0:41:12 Thomas: Were doing we were doing some research on 13th century uh law, and well, you know, it just turns out yeah, oh,

0:41:48 Andrew: As we have a good reason for changing our mind, and we have a good reason for changing your mind, yeah, right, yeah exactly.

0:41:49 Thomas: Because doesn't matter, did they have to come up with a reason that was, uh, like separate from this ruling? Do they have to come out, but, like, I was saying, like, oh, we read a book about 13th-century law, and Yeah.

0:42:03 Andrew: And that is a given. So so that's exactly what happened. The FCC changed their ruling again. They reclassified providers as common carriers and then said, now look, now we have the authority to regulate them as common carries and we're going to reimpose net neutrality. And now it is time for us to hop on the other train. Okay. So you have piloted this, this train all the way down the tracks. Uh, now we get to go jump to the FTC train. Yep,

0:42:05 Thomas: Going to do that in part two? Is that right?

0:42:41 Andrew: Absolutely.

0:42:41 Thomas: All right. Excellent. That, that's really, really cool. I'm, I'm curious to hear the rest of the story. We're gonna find out, the other train, how that collides with, you know, it's like, a it's almost like an episode of Lost or something where you're getting these alternate, you know, histories going, and then they meet at a certain point. So that's really fascinating. Let's find out, uh, that's gonna be next week. What a heartbreaker. Oh, man, sorry guys, you're gonna have to wait till next week, but tune in next week to find out the thrilling conclusion of this, what is it called, of how of how net neutrality became selling the internet. There you go.

0:42:42 Andrew: Absolutely.

0:43:13 Andrew: I

0:43:16 Clip: Thank you, Dr. Hibbert. I rest my case. You rest your case? What? Oh, no. I thought that was just a figure of speech. Case closed.

0:43:26 Thomas: Andrew, there is another listener question here about the Fearless Girl, that's that statue that was erected, uh, opposite the Charging Bull. Really cool, I kind of like it. Um. So, and this is in the news recently, a lot of people are wondering, the artist behind the bull, the Charging Bull, kind of wants to get the Fearless Girl sculpture out of there. Does he have a case? Can he do that? Is it legal? What do you think?

0:43:51 Andrew: So short answer is no.

0:43:54 Thomas: When

0:43:54 Andrew: So the, and you can think about this from a lot of different perspectives. I mean, there's... there's sort of a basic, you know, right of of contract, you. The creator of The Charging Bull Statue is Arturo de Modica, uh, and his statue was commissioned first, uh, and then, uh, the Fearless Girl was was put up subsequently, and the original artist is saying, hey, look, this makes a mockery of my initial work. And so, um, it's not just as cut and dried as, um, as a basic question of contract. Um, you do have, when you have a copyrighted work and you have the authorship of that work, you have a certain set of rights that are called moral rights that go along with what your copyright does.

0:44:41 Andrew: And so the idea is when you exercise those rights you anticipate a level of respect for the use of your work. Moral rights are protected in the United States by a statute called the Visual Artist Protection Act, and that is 17 U.S.C. Section 106 A. And it says, subject to certain limitations, this is subsection A3, an artist shall have the right to prevent any intentional distortion, mutilation, or other modification of that work, which would be prejudicial to his or her honor or reputation. And any intentional distortion, Mutilation or modification of That work is a violation of that right.

0:45:29 Andrew: And to prevent any destruction of a work of recognized stature, and any intentional or grossly negligent destruction of that work is a violation of that right. So that's a little little different than kind of your standard contract answer of, you know, you might think like, oh, hey, city commissioned me to make a bull. I made a bull, that's it. They paid me, I'm done, my rights are extinguished. Because you're a copyright holder, because you're an artist, you've made a visually creative work, you do have the associated right of preventing intentional distortion, mutilation, or other modification that would bring damage to your reputation. Um, I've been through the case law, that there's nothing that suggests. So there are two problems. Um, number one, uh, it is not clear based on the timing, uh, uh, that this law would apply, uh, because the law Only applies to works. Well, the law didn't pass until 1990, um. And it only applies to to works um unless the artist did not transfer out the title of the work, and I don't know whether he did or not, right? So

0:46:31 Thomas: Was that made, though? That was made before 1990?

0:46:31 Andrew: No. It was made after. I don't know that the statute applies to this statue. And boy, if you that.

0:46:39 Thomas: Yeah, I was going to say, Andrew, so does the statute apply to the statue, or is that statue not protected by the statute? And therefore, they would need another statute if they were going to erect another statue, would that apply? No, I'm just kidding, I'm trying to ask a question that confuses Andrews.

0:46:54 Andrew: But I just want to point out you've you've got every use of statue and statute

0:46:57 Thomas: Broadcaster baby No, I'm just kidding, tongue unique New York Unique New anyway, I want yeah

0:46:58 Andrew: Correct in that. Yeah, no, yeah, this is this is what it's like to work with a professional people. Yeah, I whereas half of our episodes on Chevron deference, I called it Chevron defense. So, yes.

0:47:12 Thomas: Chevron deference, everybody, buddy, uh, you

0:47:15 Andrew: A

0:47:15 Thomas: Kill somebody with your car and you think that Chevron has some additive that uh makes your car homicidal, that would be the Chevon defense, but if you, yeah, so there's... there's the difference, um, but I want, so that's the grounds under which this artist was uh challenging this, he wasn't saying, because there was some question, and I don't know if you know this or if it's part of what you're looking at, but whether or not it was even legal to like erect the statue there, uh, but but this is the grounds he's challenging, is this changes my work in some way, or this, this, I have copyright over this work, uh, and certain things are protected, as you've outlined in the statute, and so that's the grounds on which he's challenging this. Oh, good point, that's a good point, I could have thought of that, thank you, yeah

0:47:56 Andrew: Yeah, I mean, he would not have standing to challenge whether the Fearless Girl statue was properly put up. Right. So, yeah, I'm sure you would have. Look, you got statue and statute. Correct. So.

0:48:11 Thomas: That's what I'm here for, so

0:48:13 Andrew: So there you go. Fearless girl.

0:48:13 Thomas: Interesting so yeah all right, well, short answer, no, we could almost, maybe this will be a closed arguments then, I'll play that intro, or, right, this brings us to our favorite time of the the week, and that is when we get to thank our all-time greats, our Hall of Fame patrons, and they are Roger Metcalf, Danny Rosari, Eli Bosnick, Dave Nichols of Positively Doubtful Podcast, Steve Sigman, Jim Grove, Desecrator, Patrick Fussell, Amanda Lipnack, uh, Heather Loveridge, Geeker 41, Sean Pity, Ian and Ally, Matthew Vernon, Violet Page, Hall, Heath Enwright, Jeffrey Maynor, the Wayward Willis, Detective Matt Maxson, Zena, Dave Lovely, and Danny Baker at Combat Nonsense, take

0:48:57 Andrew: Thank you to Charone Frankel, the host of the delightful podcast, Habeas Humor. Thank you. Squick Thinger, Ian Ryan, Matthew Hillier, Aaron Graddy, You Are Here Sci-Fi Audio Drama, thank you, Brandon Smith, thank you, as always, to TV Is My Girlfriend, C6, Sarah Hunter, Ash Torstein Skurve, adopt a homeless pet and oppose declawing and ear docking just like we do, Philip Stromberg, Thomas McCormick, thank you to John Bodley Esquire, Kaylee Riser, Sakashita Fukasumi, Michael Schaefer, for Michaela, thanks Foundation at EFF.org, the Inciting Incident podcast, Marissa Alexa McCool and her fabulous snarky publishy stuff, the Netsack Heathen, you to Michael Schaefer of Reason Real Estate and thank you to Conrad Michaels, and of course our top patron, Zabby. Thanks to all of you for being Hall of Fame patrons, we really appreciate your long-standing uh and uh and and dedicated support of the show, couldn't do this without you, that is, is literally true, yep.

0:50:00 Thomas: patreon.com/law, of course, if you want to become a top patron, we'd, we'd, all, there's always room for more top patrons. All.

0:50:08 Andrew: Like we said, seats guaranteed, patreon.com slash law yeah

0:50:11 Thomas: Leg room. No delays. There's so many benefits. They recline, everything.

0:50:16 Clip: Oh, no associate of this firm has ever failed the bar exam. No kidding.

0:50:22 Thomas: Alright, Andrew, it's my second least favorite time of the week. When I get to find out if I can fail another question, but I'm like, you know, I'm on a one in a row streak, when my coveted one in the row streak, and also we have here is just further embarrassment to me. Phil Ferguson from Tuesday's show, how you doing, Phil? It

0:50:25 Andrew: Right.

0:50:41 Phil: Oh wow, it seems like we just talked minutes ago.

0:50:44 Thomas: Time does fly, doesn't it, and he's here to maybe to after I, is because we got to preserve the sanctity of the game, absolutely, you know, according to the commissioner, I need to answer without any help from Phil, but after I answer, Phil's gonna take a crack at it, maybe, maybe give his opinion if I'm wrong or if I're right, and we'll see how if Phil can do any better than TTTTB, yeah.

0:50:46 Phil: Indeed, indeed. And I just may All end up using the GWT method.

0:51:11 Thomas: Yeah, and keep in mind, Phil, you, we won't know, you'll have to tune in, you know, on next Tuesday's episode to hear the answer, but but we'll find out.

0:51:18 Phil: Well, since I listen to every single episode like all loyal listeners should, it won't be a problem.

0:51:24 Thomas: That's a good answer.

0:51:24 Andrew: Right. I Thank you. Knew I wanted him to play along. Okay, so this is Thomas and Phil take the bar exam. Question number 21. Ready?

0:51:33 Thomas: Nope.

0:51:34 Andrew: I Okay. The state constitution in one state guaranteed the right to marry to same-sex and opposite-sex couples alike. A political group got a proposition on the ballot and a majority of the people voted to eliminate the right of same-sex couples to marry. The proposition did not affect any of the other rights that same-six couples may have possessed from existing state law. Persons affected sued the state government for unconstitutionally taking away the rights that they had and doing it for no legitimate purpose in violation of the Due Process Clause of the 14th Amendment. Will the court grant the requests of the lawsuit and and declare the proposition void and reinstate the right of same-sex couples to marry? And I am going to—I don't know the answer yet until you pick, but I'm going to editorialize here.

0:51:34 Thomas: As usual.

0:52:26 Andrew: Even though this is a recent exam question, my instruction would be interpret this in light of the state law question, and not with respect to reference to Obergefell v. Hodges. I don't think the answer is going to take that into account. If it does, I will, you know, give you credit for answering it so here's the question, right? Forgetting the Obergefell decision, assuming that there is no federal right of same sex couples to get married, one state legalizes same sex marriage and then a political group puts an opposition on the ballot, says, let's repeal this, right. Traditional marriage for everybody. And that passes. And so they repeal same-sex marriage. Now, this never happened. No state that passed either predecessor, which there were various forms of arrangements that were tantamount or analogous to marriage, civil unions in Vermont, that sort of thing. None of the states that either passed civil unions or gay marriage ever reversed that decision. But this bar question asks that as a hypothetical.

0:52:52 Thomas: Yeah.

0:53:38 Andrew: So it says state authorizes gay marriage, then opposition gets on the ballot and they take it away. And so then the question is, persons affected, and again, I will interpret that for purposes. This is the question. That means somebody who got gay married, right, sues the state government for unconstitutionally taking away the rights that they had and doing it for no legitimate purpose in violation of the due process clause of the 14th Amendment. So the question is, given that background, will the court grant the request of the lawsuit, declare the ballot proposition void and reinstate the right of same sex couples to marry? Marry. Makes sense? This is a yes or no question. And there are two yes answers and two no answers. So you have to not only get the answer correct, but you have to get the reasons therefore correct.

So answer A, yes, under the due process clause, no compelling state interest justifies denying same-sex couples the the fundamental right to marry. B, yes, because under the Fourth Amendment, it would be an illegal interference against the right of privacy guaranteed to everyone. C, no, because the people voted to take a provision out of the existing Constitution, and when that is done by public vote, it cannot be altered.

0:53:54 Thomas: Okay.

0:54:03 Thomas: No,

0:54:56 Andrew: D, no because the ballot proposition was properly placed on the ballot and all statutory procedures were followed, thus precluding the courts from taking adverse action. So there are your choices, Thomas, first, what do you think?

0:55:12 Thomas: This is a really hard one, um, man, and it's interesting too that it seems to be testing a principle that doesn't really relate to any one state, so it's because it's generic state, so, uh, it's not as though I would have to know the details of like what particular state, state rules are on amending their constitution and stuff. So that's interesting to me. But I would say that it really seems to me that if the right didn't exist and then a ballot measure enacted it, that a ballot major could then take it away. It would be surprising to me if they'd be able to have a constitutional argument or have some argument that a bullet measure that that just granted something, couldn't take it away right after.

0:56:02 Thomas: So, I mean, that's my intuition, which I think is D. The answer would be, for me, I think it's going to be D. I don't know. It's not what my heart wants, but I don't know. That's what makes sense to me. Really am not too sure about this, but I'm going to go with D because it just seems to me that if the ballot measure could put it on, that the ballot measure, if the ballot measure giveth, the ballot measure could take it away. Uh, it's, that's what it feels like to me, but that's my answer. Well, now we'll see what our expert, uh, legal expert Phil Ferguson has to say on my answer. What do you think?

0:56:34 Phil: I'm trying to parse the difference between C and D. Uh, I mean my knee-jerk answer would be stare decisis and standing, but uh, that wasn't given to me so I can't use that, those, those are the legal words I know. So, um, but because the people, people voted, boy, you know, I'm so torn between C and D that I'm going to go with A, final answer. All right. Um,

0:56:55 Thomas: Right, I didn't think about that, could have been C. Yeah, shoot, which One Was a, all right.

0:57:06 Andrew: A is yes. Under the The due process clause, no compelling state interest, justifies denying same-sex couples the fundamental right to marry.

0:57:17 Thomas: Well, that's Phil's answer, that's

0:57:18 Andrew: OK. And as always, if you would like to play along with Thomas and Phil on Thomas Takes the Bar Exam, question number 21, you can play along on Twitter. When we announce the episode, simply quote and retweet our tweet. That is at Open Args. Include your answer, your reasons, therefore, you can do that by grabbing a screenshot of a multi-page answer, as sometimes people do, or by confining it to 140 characters. Sometimes pithy wins, sometimes lengthy wins, sometimes incorrect answers win if they make us laugh. So, uh, so play are you along, saying, and we, you're look for not it going to give me the answer now on the recording? That's absolutely Oh,

0:57:56 Thomas: That's what we were telling you yeah that's

0:57:58 Phil: Well, correct all I mean, it seems funny when it happens to Thomas, but now that I am involved, I am not really cool with this. I would like to

0:58:07 Andrew: Right

0:57:59 Thomas: Why I said you have to listen on Tuesday Thank you there Yeah, it's not so nice, is it, everybody, denied yeah thanks

0:58:11 Phil: Appeal to the bench. And we

0:58:13 Andrew: Will we will address Phil's appeal in opening arguments episode 65 airing next Tuesday Well, thanks, guys. Great Great fun, thanks yep. Again for playing along with us and being on the show twice sure

0:58:22 Phil: Fun. Now

0:58:22 Thomas: Phil just absolutely you. And that's it for today's show. Andrew, I want to thank our listeners. I want thank Phil for popping in yet again. Again, we'll see if he did any better than Thomas of Thomas Takes the Bar Exam. We'll find out. And thanks, Andrew, for being our expert every day, week in, week out, telling us how to think about these important legal questions. And we will see you guys next week.

0:58:58 Clip: This has been Opening Arguments with Andrew and Thomas. If you love the show and want to support future episodes, please visit our Patreon page at patreon.com/law. If you can't support us financially, it'd be a big help if you could leave us a five star review on iTunes, Stitcher, or whatever podcast delivery vehicle you use. And be sure to tell all your friends about us. For questions, suggestions, and complaints, email us at openarguments@gmail.com. The show notes and links are on our website at www.openargs.com. Be sure to like our page on Facebook and follow us on Twitter at OpenArgs. Until next time. This podcast is a production of Opening Arguments Media, LLC. All rights reserved.