Reconsidering Chevron Deference: Implications for Tech Policy

The Supreme Court is poised to reconsider a fundamental principle of administrative law. The “Chevron Doctrine” requires the court to defer to agency interpretations of ambiguous statutes, rather than resolving the ambiguity itself. Chevron is one of the most-cited cases in legal history, and revising its approach to statutory construction could significantly impact how agencies regulate society. This is particularly true of tech policy, where agencies play a prominent role in shaping the legal landscape.

As AEI Senior Fellow Adam White recently explained, one byproduct of a strong Chevron Doctrine is regulatory uncertainty. Every four to eight years, the White House changes hands, bringing new agency officials that often use Chevron to undo the work of their predecessors. The whipsaw effect of such changes can be economically disruptive and at some point erodes fundamental rule of law values.

Broadband regulation could be Exhibit A in support of White’s point. In 2005, the Supreme Court upheld a Federal Communications Commission (FCC) decision that broadband is an “information service” subject to light-touch regulation under the Telecommunications Act, rather than a “telecommunications service” subject to Title II common carrier regulation. But a decade later, the FCC changed its mind, reclassifying broadband under Title II to justify its net neutrality rules—only to reverse itself again in 2018 by a new FCC determined to repeal those rules. In each case, Chevron mandated that courts defer to the agency’s decision, even though this means endorsing the idea that the same statutory language meant the opposite of what it meant a few years ago. Unsurprisingly, after a change in administration the new FCC is poised to change its mind yet again later this year.

One might think it a perk that agencies have the flexibility to shape doctrine in response to political feedback. But presidential elections are noisy signals. Is a vote for Joe Biden expressing a specific desire for strong net neutrality rules, as opposed to immigration reform, worker rights, or simply a distaste for Donald Trump? It’s hard to draw definitive conclusions about voters’ views on specific policy questions.

And the resulting instability imposes significant costs on society. Regulatory uncertainty chills investment: Shareholders are less willing to invest capital in new networks if a changing legal environment casts doubts on their expected rate of return. Wireless companies may be reluctant to explore cutting-edge innovation like network slicing if regulators could limit its usefulness going forward. And consumer protection waxes and wanes, sometimes inadvertently, as when the FCC’s Title II classification stripped the Federal Trade Commission of authority to apply privacy rules to broadband providers as it does the rest of the economy.

So if Chevron is limited, what will happen to broadband regulation? While it’s premature to predict with certainty, it’s possible courts will then decide themselves whether broadband fits better under Title I or Title II. The answer is not self-evident: Justice Scalia famously described the Telecommunications Act as “not a model of clarity” but “in many important respects a model of ambiguity or even self-contradiction.” Several courts, including the DC Circuit in the latest round of litigation, have suggested that Title II is the better interpretation. And it is possible that, freed of Chevron’s shackles, a court will decide this way once and for all.

But this is less likely in the wake of another recent strand of the Supreme Court’s administrative law jurisprudence, the Major Questions Doctrine. This doctrine suggests that, absent “clear congressional authorization,” courts should be reluctant to find that Congress intended an agency to decide important questions of economic and political significance. The Major Questions Doctrine developed as an exception to Chevron, to prevent agencies from transforming ambiguous language in long-extant statutes to support expanded agency powers. While on the DC Circuit, then-Judge Kavanaugh argued that this doctrine prevented the FCC from classifying broadband under Title II, a statutory scheme that pre-dated broadband and was written to discipline landline telephone monopolies. The Supreme Court’s latest Major Questions decision cited Kavanaugh’s decision approvingly.

Regardless of the answer, both industry and society would benefit from judicial certainty. A decision would fix the statute’s meaning once and for all, making the regulatory rules of the road clear for broadband providers and consumers. And if Congress disagrees with the court’s decision, it will be incentivized to correct the problem itself, rather than relying on agencies to do so. There are significant benefits to congressional decision-making: it increases political accountability by putting hard questions in the hands of officials who are directly elected. And, more importantly, the legislative process allows for bipartisan compromise on statutes with buy-in from a broader swath of the political spectrum. In that sense, reconsidering Chevron can be an important step toward restoring Congress’s rightful place as the primary depository of federal legislative power.