Why Courts Matter

In 2002, the FCC issued a declaratory ruling reclassifying network providers as “information services” instead of “telecommunication services.” This small distinction had important consequences. Telecommunication services, like telephones, had traditionally been tightly regulated and thus under this definition network providers were required to maintain neutral access to their networks. By classifying network providers as information services, the FCC essentially deregulated network providers and no longer required them to assure neutral access to their networks. When the Supreme Court affirmed the legitimacy of the FCC’s decision, net neutrality, which had been the norm when broadband companies were classified as telecommunication services, suddenly became an issue. After a Supreme Court decision, an issue in Congress can become an entirely new problem complicated by the court’s interference. Courts narrow the scope of possible responses to policy problems because they will strike down policies that conflict with precedent and enacting new legislation may be politically difficult. Although they are not elected and serve lifetime tenure, the justices of the Court shape the policy process through the decisions they produce and the precedent those decisions create.

The Supreme Court has the ability to change the venue in which a policy issue is being considered. Statutory interpretation inevitably impacts policy because justices interpret how a policy will be applied. When Congress passes a law the language of that law may be ambiguous – either intentionally or by accident. Statutory interpretation is the process through which courts engage in the interpretation of legislative language in order to apply it. Whether a court decides on one meaning or another, it is shaping that policy in a way that is removed from the legislative process. These decisions can empower certain agencies to implement a specific policy interpretation. Which agency, or venue, controls an issue impacts how an issue will be considered. Affirming an agency’s purview over a certain issue shifts the authority of decision making toward a specific agency. The power to interpret what legislation means gives courts the ability to give agencies authority and shapes how policy will be implemented. Through statutory interpretation, courts give agencies authority which they would not be able to exercise without the court’s added legitimacy. Agencies execute laws passed by Congress, but Congress can check and balance policies that agencies produce with legislation. Intervention by courts, through interpretation of statutes, disrupts this hierarchy and gives agencies added legitimacy. Court decisions can expand the authority of a federal agency and give it more power to make policy by interpreting a statute in favor of a federal agency.

Court decisions constrain policy alternatives and narrow the range of possible outcomes. Once courts interpret a statute, those decisions become the law of the land and affect the way Congress and federal agencies act. Some decisions determine what legitimate policy is and what will not pass constitutional muster. Legislation that flies in the face of precedent can be struck down by courts through the process of judicial review. Policymakers can be forced to pick from options that are legally possible. Even if a majority of legislators support a policy alternative it must fit within the framework established by courts. In statutory cases, if the Supreme Court sides with an agency Congress has the ability to pass clarifying legislation. The process of amending a law post facto can be difficult. Court decisions create new constituencies within agencies and among interest groups who agree with a decision. Stripping an agency of power it already has or taking away benefits from people who are already receiving them is much more difficult once the court’s interpretation becomes the status quo. Courts can create constraints on alternatives that did not exist when the original policy was being considered. Without Congressional clarification, agencies in the executive branch are charged with executing the decisions of the judicial branch. But court decisions also constrain the range of possible actions federal agencies can take. A specific interpretation of a statute binds the actions of a federal agency to that interpretation. Federal agencies cannot override judicial interpretation once it is made. Court decisions frame the environment in which federal agencies are able to act. Decisions made by courts limit the way a policy can be changed or carried out.

The FCC’s controversial declaratory ruling to change the status of cable modem providers would not have survived without the legitimacy the courts granted the decision. In 2002, the FCC reclassified cable modem providers as information services (FCC 2002). This freed network providers from many regulations attached to a telecommunications status. The declaratory ruling was immediately challenged in court. A small company called Brand X challenged the FCC’s authority to make this decision based on the Telecommunications Act of 1996 (Oyez). The Supreme Court was eventually called upon to make a statutory interpretation of the Telecommunications Act. In National Cable and Telecommunications Association v. Brand X Internet Services the Court affirmed the FCC’s authority to determine the regulatory status of network providers based on the language of the statute (Oyez). The Court’s statutory interpretation solidified the FCC’s declaratory ruling in a way that provided legitimacy. The decision also contained the venue where net neutrality would be considered within the FCC by affirming its ability to make decisions regarding network policy. The Supreme Court’s decision ensured that the FCC’s ability to regulate internet providers was legitimate.

Political actors seeking to address the issue of net neutrality with policy alternatives were constrained by the Brand X decision. The Court’s decision altered the status quo in a way that changed the way Congress considered the issue of net neutrality. By the time Brand X was decided, the FCC’s interpretation had been the status quo for three years. Overturning the decision through clarifying legislation required stripping the FCC of power it already exercised and based policy on. Moreover the FCC’s decision created constituencies which supported (or opposed) the declaratory ruling. It initiated polarization over an issue on which there had been political consensus. Accepting the Court’s ruling made congressional attempts to address net neutrality more complicated. Congress had to work within the court’s framework, where regulating network providers included regulating cable networks and other information services. The Brand X decision also meant that the FCC no longer had the power to regulate network providers. In 2007 the FCC fined Comcast for disrupting certain internet users from downloading content (Comcast). Comcast sued the FCC, citing Brand X, arguing that the FCC could not regulate Comcast. A court of appeals ruled that the FCC was not allowed to regulate Comcast like a telecommunications service because of the way the Brand X ruling (Pacer). The agency’s options for encouraging net neutrality were reduced to two possibilities; the FCC could have taken the unprecedented step of regulating information services or it could reverse its 2002 declaratory ruling (Owen). Neither was a political viable solution (Owen). The policy alternatives to existing network policy were narrow because the Brand X exerted tight constraints on what steps federal agencies can take to regulate network providers.

Courts are one of the most powerful institutions in the policy making process because of the constraints they can set on traditional policy actors. Through statutory interpretation, courts can decide what legislative language means and what processes to execute that language are legitimate. Decisions by courts influence how policy is carried out, but also control how future policy can be created. The decision by the FCC to reclassify broadband providers was given force by support from the courts through the Brand X decision. But federal agencies cannot enact policies that conflict with the Court’s interpretation in Brand X. Because support for clarifying legislation did not exist in Congress the court’s interpretations directed how policy would be carried out. The Supreme Court’s Brand X ruling expanded the power of the FCC and established the scope of possible approaches for ensuring a neutral internet. Intervention by the courts is a mechanism that makes certain interpretations of policy legitimate; ensuring that this view dominates the way a policy is executed. The issue of net neutrality was reformed by the Courts and will continue to exist within the scope of debate established by the Brand X decision.