Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs.

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In Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967 (2005), the U.S. Supreme Court upheld a ruling by the Federal Communications Commission under the Telecommunications Act of 1996 that broadband cable modem service is an "information service," rather than a "telecommunications service." This promoted free enterprise by placing cable companies outside of the common-carrier regulation of the mandatory Title II of the Communications Act of 1934, 48 Stat. 1064, as amended, 47 U.S.C.S. § 151 et seq.

Justice Clarence Thomas wrote the opinion for the 6-3 Court. He applied Chevron deference to allow the FCC to embrace free enterprise for high-speed cable access. The Court emphasized that "a court's opinion as to the best reading of an ambiguous statute ... is not authoritative," and deference to the agency interpretation is appropriate. The agency was allowed to reject a prior Court of Appeals decision that held that broadband cable modem service is a "telecommunications service."

Justice Antonin Scalia dissented, and was joined by Justices David Souter and Ruth Bader Ginsburg. Justice Scalia complained about the implicit transfer in authority from the courts to the agencies, whereby an agency interpretation disfavored by a judicial decision was being upheld:

This is not only bizarre. It is probably unconstitutional. As we held in Chicago & Southern Air Lines, Inc. v. Waterman S. S. Corp., 333 U.S. 103, 92 L. Ed. 568, 68 S. Ct. 431 (1948), Article III courts do not sit to render decisions that can be reversed or ignored by Executive officers. In that case, the Court of Appeals had determined it had jurisdiction to review an order of the Civil Aeronautics Board awarding an overseas air route. By statute such orders were subject to Presidential approval and the order in question had in fact been approved by the President. Id., at 110-111, 92 L. Ed. 568, 68 S. Ct. 431. In order to avoid any conflict with the President's foreign-affairs powers, the Court of Appeals concluded that it would review the board's action "as a regulatory agent of Congress," and the results of that review would remain subject to approval or disapproval by the President. Id., at 112-113, 92 L. Ed. 568, 68 S. Ct. 431. As I noted in my Mead dissent, 533 U.S., at 248, 150 L. Ed. 2d 292, 121 S. Ct. 2164, the Court bristled at the suggestion: "Judgments within the powers vested in courts by the Judiciary Article of the Constitution may not lawfully be revised, overturned or refused faith and credit by another Department of Government." Waterman, supra, at 113, 92 L. Ed. 568, 68 S. Ct. 431. That is what today's decision effectively allows. Even when the agency itself is party to the case in which the Court construes a statute, the agency will be able to disregard that construction and seek Chevron deference for its contrary construction the next time around.