Reconsidering Chevron Deference: Implications for Tech Policy (Daniel Lyons, February 01, 2024, AEIdeas)

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.