The Supreme Court in a 6-3 vote overturned the landmark decision in Chevron v. Natural Resources Defense Council, sharply limiting the authority of federal administrative agencies including the FCC.[1] After the decision in Loper Bright Enterprises v. Raimondo,[2] it will be easier to challenge and overturn agency decisions, and federal agencies will be more hesitant to adopt new regulations absent clear Congressional direction. At the same time, the need for clear Congressional direction means that new legislation will need to spell out the agency’s role in greater detail.

While the Loper decision involved a statute governing fisheries,[3] the decision will have far-reaching and significant effects across scores of federal agencies, impacting core policy matters on everything from banking to healthcare to energy and the environment, and of particular relevance to this analysis, telecommunications.

The overturning of the Chevron doctrine promises to impact ongoing telecommunications and broadband policy debates, including the regulatory classification of broadband Internet services and the scope of the FCC’s Title II authority. It may also reopen prior regulatory debates on everything from spectrum allocation matters to pole attachment and rights-of-way management decisions.

I. OVERVIEW OF THE DECISION

A. What is Chevron Deference?

The Chevron doctrine of judicial deference to agency interpretation arose forty years ago in a case examining whether an Environmental Protection Agency (EPA) regulation was consistent with the provisions of the Clean Air Act. (Interestingly, the EPA Administrator at the time was none other than Justice Gorsuch’s mother.) To answer the question, the Chevron court adopted a two-step approach for reviewing agency actions, essentially requiring courts to defer to the agency’s interpretation if the underlying statute is ambiguous or silent as to the activity in question.

Chevron deference was in large part based on the presumed expertise and institutional knowledge of the agency. Since its adoption, Chevron deference has allowed agencies, including the FCC, to address changing and evolving technologies and policies that may not have been anticipated at the time of the statute’s enactment.

B. The Loper Decision

The Loper decision represents a long-standing and concerted effort, particularly among conservatives, to overturn or reign in the deference afforded to administrative agencies under Chevron.[4] In reversing Chevron, the Loper Court concluded that 1) Chevron deference is inconsistent with the requirements of the Administrative Procedures Act (“APA”), and 2) Chevron deference violates the U.S. Constitution.

First, the Court noted that, under the APA, the role of “the reviewing court” – not the agency whose action it reviews – is to “decide all relevant questions of law” and “interpret … statutory provisions.”[5] The Court further found that the APA “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the statute.”[6] The Court, therefore, concluded that Chevron deference is fundamentally inconsistent with the APA and must be overturned.

Second, the Court held that Chevron deference runs counter to the Article III of the U.S. Constitution, which assigns to the federal judiciary the responsibility and power to adjudicate “Cases” and “Controversies.” The Court reasoned that this Constitutional requirement necessarily requires that courts and not independent agencies determine the meaning of laws.

In reaching these conclusions, the Court specifically rejected the presumption that agency interpretations should be given deference because of the subject matter expertise of the agencies. The Court held that Chevron’s presumption is “misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.”[7]

The Court also criticized the fact that Chevron deference required courts to accept and uphold a reasonable agency interpretation of a statute even if that interpretation was not the most reasonable interpretation. As Justice Gorsuch noted in his concurring opinion, this can result in a game of regulatory ping pong, with successive administrations adopting contradictory interpretations of the same law being upheld under Chevron. To illustrate his point, Justice Gorsuch focused on the FCC’s multiple conflicting interpretations of the regulatory classification of broadband Internet service under the federal Communications Act over the past twenty years:

Under Chevron, executive officials can replace one “reasonable” interpretation with another at any time, all without any change in the law itself. The result: Affected individuals “can never be sure of their legal rights and duties.” How bad is the problem? Take just one example. Brand X concerned a law regulating broadband internet services. There, the Court upheld an agency rule adopted by the administration of President George W. Bush because it was premised on a “reasonable” interpretation of the statute. Later, President Barack Obama’s administration rescinded the rule and replaced it with another. Later still, during President Donald J. Trump’s administration, officials replaced that rule with a different one, all before President Joseph R. Biden, Jr.’s administration declared its intention to reverse course for yet a fourth time. See, Safeguarding and Securing the Open Internet, 88 Fed. Reg. 76048 (2023); Brand X, 545 U. S., at 981–982. Each time, the government claimed its new rule was just as “reasonable” as the last. Rather than promoting reliance by fixing the meaning of the law, Chevron deference engenders constant uncertainty and convulsive change even when the statute at issue itself remains unchanged.[8]

C. Standard of Review in the Wake of Loper

Rather than defer to agency determinations, the courts will now instead exercise their own independent judgment in determining the meaning of statutory provisions. The Court in Loper, however, stated that in exercising such judgment, “courts may – as they have from the start – seek aid from the interpretations of those responsible for implementing particular statutes.”[9] The Court indicated that “such interpretations constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”[10] Thus, the key difference is that while courts may, and often should, look to agency expertise for guidance, the courts may not defer to agency interpretations.[11]

D. Impact on Prior Agency Decisions

The Court stated that it was not reversing previously decided cases that relied on Chevron deference, stating that “the holdings of those cases that specific agency actions are lawful – including the Clean Air Act holding of Chevron itself – are still subject to statutory stare decisis despite our change in interpretive methodology.”[12]

The Dissenting Opinion, however, notes that the majority’s ruling does not address the fact that many agency rulings and interpretations were never challenged and may therefore be vulnerable to challenge. The possibility of such challenges to existing agency rulings has increased further with a decision by the Supreme Court just a few days after the Loper decision was announced. In Corner Post, Inc. v. Board Of Governors of the Federal Reserve System, the Court held that legal challenges to federal regulations can be brought outside the normal six year statute of limitations if someone is not adversely affected by an agency rule until after the six-year window of time to file suit.

II. POTENTIAL IMPACT ON TELECOMMUNICATIONS AND BROADBAND POLICY

The Supreme Court’s abandonment of Chevron deference could have a significant impact on a variety of telecommunications and broadband rules and policies. The decision will likely result in a flurry of challenges to FCC and NTIA rulings and polices that may not be clearly supported by statutory language.

A. Open Internet Order

Among the most notable FCC rulings that will be impacted by the Loper decision is the FCC’s 2024 Open Internet Order. As discussed above, the FCC’s back and forth reclassification of broadband Internet access service under the federal Communications Act, as a Title I unregulated “information service” or a Title II regulated “telecommunications service,” was specifically referenced in the Concurring Opinion of Justice Gorsuch to illustrate the inconsistent policy that can result from deference to agency rulings.

Several Internet service provider groups are currently challenging the FCC’s Open Internet Order in the U.S Court of Appeals for the Sixth Circuit. The removal of Chevron deference and Justice Gorsuch’s Concurrence have given the petitioners an additional basis to overturn the FCC’s Order, which the court will likely do if it does not agree with the FCC’s interpretation that broadband Internet access service is a “telecommunications service” subject to Title II regulatory authority. In fact, immediately following the Loper decision, the Sixth Circuit directed parties to file supplemental briefing material addressing the effect of the Loper decision on the court’s analysis of a motion to stay the Open Internet Order.

B. Other Likely Challenges

Among the other key telecom and broadband policy areas that we would expect to see challenges, or an expanded basis for challenge, are the following:

• The FCC Digital Discrimination Order.[13] The FCC’s Order has been appealed to the U.S. Court of Appeals for Eighth Circuit.
• Challenges to the scope of the FCC’s administration of the federal Universal Service program under the so-called non-delegation doctrine,[14] as well as the FCC’s appointment of the Universal Service Administrative Company to manage the federal Universal Service Fund. There have been multiple challenges in various federal courts, some of which are still ongoing.
• NTIA’s adoption of a low-cost service option requirement for Broadband Equity, Access and Deployment (“BEAD”) funding.

C. Prior FCC Determinations

The Loper decision, when combined with the aforementioned Corner Post decision, could enable litigants to reopen FCC decisions in areas where the law is thought to have been settled. A putative petitioner might argue that the agency’s prior decision was never challenged (and therefore not granted Chevron deference), or the specific matter did not harm the petitioner so during the initial six-year statute of limitations. A petitioner could challenge prior FCC decisions involving spectrum regulations, pole attachments, and myriad other issues if the issue was never previously challenged, or if the petitioner is impacted only after the regulation was upheld.

D. An Updated Telecommunications Act?

We expect that uncertainty surrounding the FCC’s authority to undertake crucial policy initiatives will lead to increased calls for major new telecommunications/broadband legislation. Universal service contribution reform, for example, is viewed as a priority across the political spectrum, yet the FCC’s authority to do so is now in question. In the absence of clear legislative direction on that and other issues – including net neutrality, digital equity, consumer privacy, and the question of whether the FCC may exert regulatory authority over broadband Internet access as a general matter – the future of telecommunications policy will be clouded by uncertainty.

[1] Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837.

[2] Loper Bright Enterprises Et Al. v. Raimondo, Secretary Of Commerce, 603 U. S. ____ (2024)(“Opinion of the Court”) https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf. The Loper case was adopted with a companion case Relentless, Inc., et al. v. Department of Commerce, et al.

[3] The Magnuson-Stevens Fishery Conservation and Management Act. See 90 Stat. 331 (codified as amended at 16 U. S. C. §1801 et seq.).

[4] Ironically, Chevron was adopted by a conservative court upholding Reagan era regulations adopted by an EPA administered by Justice Gorsuch’s mother.

[5] Opinion of the Court, at 21.

[6] Id., at 1.

[7] Id., at 5.

[8] Concurring Opinion of Justice Gorsuch, at 23.

[9] Opinion of the Court, at 16 citing Skidmore v. Swift & Co., 323 U. S. 134, at 140 (1944).

[10] Id., at 16.

[11] The Court further clarified that the ruling does not impact instances where Congress specifically conferred authority to an agency to interpret statutory terms, noting that some statutes “expressly delegate to an agency the authority to give meaning to a particular statutory term.” In such instances, the court’s role is to determine whether the agency has engaged in “reasoned decision making” within the boundaries of the authority delegated under the statute.

[12] Id., at 34. “Stare decisis” is a legal doctrine governing judicial adherence to the precedent set by prior rulings.

[13] Implementing the Infrastructure Investment and Jobs Act: Prevention and Elimination of Digital Discrimination, Report and Order and Further Notice of Proposed Rulemaking, GN Docket No. 22-69, FCC 23-100 (rel. Nov. 20, 2023).

[14] The “non-delegation doctrine” is the principle under the Constitution’s separation of powers that holds that legislative bodies cannot delegate their legislative powers to executive agencies or private entities.