970 F.3d 372
D.C. Cir.2020Background
- Charter, Time Warner Cable, and Bright House merged to form "New Charter," a major cable broadband provider; the FCC approved the license transfers only with extensive conditions addressing broadband service.
- Four FCC-imposed broadband conditions at issue: (1) seven-year ban on charging "edge"/programming suppliers for interconnection (no paid interconnection), (2) seven-year ban on usage-based pricing/data caps, (3) requirement to enroll 525,000 low-income households in a heavily subsidized 30 Mbps $14.99 plan within four years, and (4) buildout to 2 million additional customer locations within five years.
- Plaintiffs: three former customers who saw post-merger bill increases (France, Frank, Haywood), one additional individual (Gruffat), and the Competitive Enterprise Institute (CEI) asserting associational standing via Gruffat.
- Plaintiffs petitioned the FCC for reconsideration; the FCC delayed and then denied reconsideration on procedural/standing grounds; plaintiffs appealed to the D.C. Circuit.
- The D.C. Circuit held that three individual subscribers had Article III standing to challenge the interconnection ban and the discounted‑services condition, lacked standing for usage‑based pricing and the buildout condition, and vacated the two challenged conditions because the FCC declined to defend them on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction / ability to appeal FCC order | Appellants are "aggrieved" under 47 U.S.C. § 402(b) and may seek review despite not all filing initial comments; CEI also challenges via associational standing | FCC argued appellants forfeited review by not commenting and that petitioners lacked standing before agency | Court: statutory review proper; §405(a) does not bar suit because FCC had opportunity to pass on issues (others raised them and agency addressed them) |
| Standing re: interconnection (ban on paid peering) | Ban forced New Charter to forgo edge-provider revenue, causing subscriber price increases; vacating will likely lead to pay interconnection and lower subscriber prices | FCC suggested other causes (e.g., servicing costs) and argued redress uncertain because New Charter might not lower prices even if allowed paid interconnection | Court: plaintiffs showed injury, traceability, and redressability (two-sided market economics); standing sustained; condition vacated (FCC refused to defend merits) |
| Standing re: usage-based pricing ban | Plaintiffs argued ban causes cross-subsidization and higher prices for light users; vacating would permit usage pricing and redress | FCC and record showed predecessors rarely used usage-based pricing; no evidence New Charter would adopt it | Court: plaintiffs failed to show traceability/redressability; no standing |
| Standing re: low-income discounted-service mandate | Plaintiffs argued mandated price discrimination likely raised prices for non‑favored subscribers; vacating would let New Charter narrow program and lower prices | FCC noted some voluntary low-income offers existed and New Charter had proposed a program; FCC contended redress speculative | Court: economic evidence and FCC findings support traceability and substantial likelihood of redress; standing sustained; condition vacated (FCC declined to defend merits) |
| Standing re: buildout requirement | Plaintiffs argued costs of mandated buildout raised consumer prices | FCC and record showed buildout largely accomplished or sunk; plaintiffs offered no proof New Charter would abandon completed work or lower prices if condition removed | Court: no standing; redressability lacking |
Key Cases Cited
- Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) (Supreme Court upheld FCC’s prior classification of cable broadband for jurisdictional purposes)
- Mozilla Corp. v. FCC, 940 F.3d 1 (D.C. Cir. 2019) (court upheld FCC’s 2018 reclassification of broadband as Title I service)
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (standing and Article III jurisdiction precedents)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (injury‑in‑fact requirements for Article III standing)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (traceability and redressability standards for standing)
- Ohio v. American Express Co., 138 S. Ct. 2274 (2018) (two‑sided market pricing dynamics)
- Nollan v. Cal. Coastal Comm’n, 483 U.S. 825 (1987) (limits on conditioned government approvals unrelated to transaction)
- Tozzi v. HHS, 271 F.3d 301 (D.C. Cir. 2001) (standing where record evidence tied third‑party conduct to agency action)
- CEI v. NHTSA, 901 F.2d 107 (D.C. Cir. 1990) (standing where third‑party market responses were predictable)
- Time Warner Entm’t Co., L.P. v. FCC, 144 F.3d 75 (D.C. Cir. 1998) (agency opportunitiy to pass doctrine and precedent for vacating conditions when agency declines to defend merits)