Adam Crews writes that Congress’s expressly broad grants of rulemaking power mean that the Supreme Court’s Loper Bright decision limiting federal agencies’ discretion will likely affect the Federal Communications Commission less than some other federal agencies. Instead, the major questions and nondelegation doctrines pose greater threats to the FCC’s regulatory discretion.
Editor’s Note: This article is the first in a series that explores how Loper Bright and the end to the Chevron deference doctrine will impact the ability of the federal agencies to regulate the economy. You will be able to read the other articles in the series here.
Although the Supreme Court has now ended the deference previously owed to federal agency regulations under the 1984 Chevron case, the Federal Communications Commission (FCC) should survive relatively unscathed. The bigger question is how it weathers the rise of the major questions and nondelegation doctrines.
Before this June’s Supreme Court ruling in Loper Bright, the Chevron framework guided courts in reviewing an agency’s implementation of a statute it administers. In its simplest form, Chevron gave two instructions: (1) If Congress spoke clearly about what it wanted, the agency had to do what Congress said; (2) but if Congress was silent or gave an ambiguous instruction, courts should uphold the agency’s action if it reflected a reasonable understanding of the statute, even if the court disagreed with the agency about the “best” answer. This framework gave agencies significant flexibility to fill regulatory gaps and to resolve statutory ambiguities.
Consider a famous example involving the FCC. The Communications Act, which the FCC administers, generally imposes utility-style regulation on telecommunications carriers, a class that includes anyone “offering” telecommunications to the public for a fee. So, when a cable company offers broadband internet service that uses high-speed wire connections to transmit data to and from a user’s computer, is it “offering” telecommunications and therefore regulated like a utility? One plausible answer is yes, because the wired telecommunication of data is necessary to the internet service. Another plausible answer is no, because ordinary consumers perceive the offered service as access to information over the internet rather than the transmission of ordinary-language messages (as with a telephone). Because there’s no clear answer, the Supreme Court said that the FCC gets to decide this consequential question on its own.
That example was no outlier. Courts had invoked Chevron to uphold major FCC initiatives like imposing and then repealing net neutrality rules for internet service providers; moving broadcast television from analog to digital technology; making room on the nation’s spectrum for 5G mobile service; and stamping out national security threats in our infrastructure. That list could go on and on. One might think, then, that Chevron’s demise in the Supreme Court’s recent Loper Bright decision would spell trouble for the FCC. In some cases, it might. But one important clarification in Loper Bright suggests that the FCC should have ample authority to continue pursuing its mission with flexibility and discretion.
In Loper Bright, the Court overruled Chevron and criticized several of its premises. One of those premises was that a statutory silence or ambiguity presumptively implies a congressional intention to delegate the gap-filling or ambiguity-resolving task to the administering agency, not to courts. Although the Court took issue with that presumption, it never quibbled with Chevron’s first (and far less controversial) instruction that courts must enforce Congress’s instructions when they are clear. And, importantly, sometimes Congress very clearly delegates significant discretion to an agency. “When the best reading of a statute is that it delegates discretionary authority to an agency,” Loper Bright reaffirms that “the role of the reviewing court … is, as always, to independently interpret the statute and effectuate the will of Congress subject to constitutional limits.” In other words, when Congress is clear about the authority it hands out, courts should respect that delegation.
The FCC is an agency with a lot of expressly delegated discretionary authority. Congress has broadly granted the FCC general power to make rules and regulations in the “public interest” so long as those rules are not inconsistent with the Communications Act’s terms. That power extends to information services (47 U.S.C. § 154(i)), like the internet service from my earlier example; to telecommunications services (47 U.S.C. § 201(b)), like phone service; and to radio services (47 U.S.C. § 303(r)). As the Sixth Circuit recently recognized, these provisions expressly give the FCC the power “to fill gaps in Congress’s regulatory scheme.” That’s the exact function that Chevron served when it presumed that Congress wanted agencies to have gap-filling authority. The FCC doesn’t need Chevron’s presumption to fill gaps because it often has Congress’s clear authorization to do so. Loper Bright tells courts to keep respecting that authority.
This broad power, however, has its pitfalls. Here’s an example from when Chevron was alive and well. The Communications Act not only gives the FCC the power to fill gaps, but it also affirmatively allows the FCC to “modify” aspects of Congress’s regulatory scheme. When the FCC sought to use that authority to excuse certain telecommunications carriers from one of their obligations under the Act, the Supreme Court invalidated that policy as exceeding the agency’s authority. In an analysis that the dissent criticized as “a rigid literalism,” the Court in the 1994 case MCI Telecommunications v. AT&T construed the FCC’s modification power as allowing only moderate or minor changes—not a broader forbearance authority. In other words, when confronted with a facially sweeping grant of power, the Court adopted a narrowing construction that undercut some of the FCC’s regulatory flexibility. Chevron deference could not save the agency because the Court saw its narrow reading as Congress’s unambiguous command. (In keeping with the theme of broadly empowering the FCC, though, Congress would shortly thereafter grant the agency explicit power to “forbear from applying” utility-style regulatory requirements in certain circumstances.)
The Court’s approach in MCI Telecommunications would eventually evolve into a much bigger beast: the major questions doctrine. In the 2022 case West Virginia v. EPA, the Court held that in “certain extraordinary cases” of vast economic or political significance, it would require “more than merely a plausible textual basis” for agency action and instead look for “clear congressional authorization.” Even before Loper Bright, the major questions doctrine was understood to trump Chevron’s ordinary presumption in favor of agency gap-filling.
Post-Loper Bright, the major questions doctrine is still a stumbling block for agencies like the FCC. On August 1, the Sixth Circuit stayed implementation of the FCC’s latest effort in a years-long back-and-forth to impose net neutrality by reclassifying broadband internet as a telecommunications service subject to heightened regulation. The reason: “Net neutrality is likely a major question requiring clear congressional authorization.” Although the FCC had invoked its broad gap-filling powers (like § 201(b), above) as “clear congressional delegation of authority to classify broadband as a common carrier,” the court concluded that this authority was too general to support a “major question” policy. Even if Chevron had lived, the newly crystallized major questions doctrine would likely still have thwarted some of the agency’s most ambitious policy changes.
The still bigger problem for the FCC is not even that its powers are too general, but that they might be too unconstrained. Any time Congress delegates power to an agency, it must provide sufficient guidance (in legal parlance, an “intelligible principle”) for how the agency can use that power. Otherwise, Congress risks authorizing the agency to legislate rather than merely execute a policy. This is called the non-delegation doctrine: the idea that the Constitution allows only Congress, and never the executive branch, to make law.
The FCC’s recent Sixth Circuit loss on net neutrality followed hot on the heels of an even bigger loss in the Fifth Circuit. There, the court held that the FCC’s universal service program—a multi-billion-dollar set of annual subsidies designed to promote the nationwide availability of affordable telecommunications service—was unconstitutional. One of the problems that the court identified was that the Communications Act gives the FCC too much gap-filling power for this program and too little guidance. Although Loper Bright acknowledged that Congress can “expressly delegate to an agency the authority to give meaning to a particular statutory term,” and that courts should honor such delegations “subject to constitutional limits,” the Fifth Circuit found a potential nondelegation issue with the FCC’s delegated authority to define what counts as “universal service.” What Loper Bright left alive, a reinvigorated nondelegation doctrine could still kill. (In the interest of full disclosure, I worked on this litigation while an attorney for the FCC.)
Simply put, the FCC has bigger problems than the loss of Chevron. Yes, Chevron was a useful tool to facilitate statutory gap-filling—the process by which agencies speak to specific, emerging issues that Congress did not address itself. Loper Bright, however, still tells courts to honor statutes that permit agencies to “fill up the details” in a statutory scheme, as the Communications Act does for the FCC. Chevron’s demise poses a bigger threat to the FCC’s ability to put a favorable gloss on ambiguous statutory terms. But as MCI Telecommunications shows, even under Chevron courts were more likely to police an agency’s ambiguity resolution when the stakes were high enough.
Precisely because the FCC has such broad regulatory power under the Communications Act, its biggest threats might come not from Chevron’s fall but from the rise of the major questions and nondelegation doctrines. That threat was coming regardless of Chevron’s fate. Under these doctrines, the FCC’s general gap-filling powers might be too broad to cover major policies, while its more specific gap-filling powers might be too unguided to be constitutional. We’ll likely hear from the Supreme Court soon enough on both counts.
Author Disclosure: The author served as counsel of record for the FCC in the Fifth Circuit Consumers’ Research litigation discussed in the article.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
