Last week the U.S. Supreme Court reversed a 40 year precedent known as Chevron deference. This momentous decision was either a great step toward agency accountability to the legislature or a power grab by courts, depending on what news you follow. 

Regardless of your political leanings, one thing is certain: the reversal of Chevron deference will disrupt regulated industries throughout the country, including the geospatial industry.

In this article I’ll briefly describe Chevron deference and what we can expect out of the gates with its reversal. Then I’ll dive into three specific topics where I see the greatest potential for this decision to impact the geospatial industry including: commercial satellite regulation, net neutrality, and oil and gas exploration. 

Saying Goodbye to Chevron Deference

Chevron Deference empowered federal agencies to interpret ambiguous statutes, resulting in the Federal Register almost doubling in size between 1984 and 2016. 

The doctrine was established by the Supreme Court in the 1984 case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (467 U.S. 837). It dictated that in the event a statute governing an agency was ambiguous, courts should defer to the agency’s interpretation of the ambiguous statute so long as it was “reasonable”. The idea being that agencies are comprised of experts with vast experience and technical knowledge in their specific regulatory spheres, unlike elected members of Congress and their staff. 

This doctrine resulted in great leeway for federal agencies to interpret ambiguous statutes, almost always resulting in more power for the regulatory agency in question. Mostly because when it comes to the legal standards “reasonable” is about as loose as it gets. 

With the doctrine reversed we can expect industry and advocacy groups to lawyer up against regulations they see as thorns in their side, especially if those crafted upon debatable statutory interpretations. In response, agencies will also need to devote a greater portion of their limited budgets to their legal teams. However, while we should anticipate turbulent regulatory waters ahead, don’t expect major impacts to existing rules any time soon, it will take time for rule changing litigation to make its way through courts. 

Moreover, while deregulation can be good for business, for anyone but gamblers uncertainty typically results in reduced spending as ROIs become less predictable. This combined with larger legal expenses will likely be a limiting factor on industry growth within parts of the federal government. With that in mind, here’s where I see change happening in the geospatial industry as a result of Chevron Deference going by the wayside. 

Orbital Debris Mitigation for Commercial Satellite Operators

Earth observation companies will likely take aim at the Federal Communication Commission’s (FCC) orbital debris requirements in an effort to relax or eliminate them. 

In 2020 the FCC issued orbital debris mitigation rules imposing requirements on satellite operators to minimize debris creation and manage collision risks. The Commission reaffirmed these rules earlier this year in response to a petition from industry seeking to change the rules and their application to satellite operators. 

Interestingly, on the same day the FCC reaffirmed the 2020 orbital debris mitigation rules, legislation by the name of the SAFE Orbit Act was introduced in the Senate to authorize space traffic coordination by the Commerce Department’s Office of Space Commerce.

The FCC certainly has the authority to regulate radio communications, upon which satellite operators rely to send and receive data. However, it is not clear the agency has statutory authority to regulate orbital traffic, satellite design not directly related to communications, or impose disclosure requirements. 

If the SAFE Orbit Act becomes law, satellite operators will have an even better chance of successfully challenging the FCC’s orbital debris mitigation rules.

Net Neutrality

Geospatial giants stand to benefit from the repeal of net neutrality. Net neutrality, the principle that internet service providers (ISPs) must treat all data on the internet the same and not discriminate or charge differently by user, content, website, platform, or application, has been a contentious issue for years. 

The FCC’s rules enforcing net neutrality have seen several iterations and legal challenges, influenced heavily by the doctrine of Chevron deference. However, with the undoing of Chevron deference, the FCC’s authority to enforce net neutrality will face significant legal challenges. Unlike previous net neutrality peals and repeals, driven by partisan commissioners, if it’s determined that the FCC does not possess the legal authority to impose net neutrality regulations in the first place, it will take an act of Congress to bring it back from the ashes, which is much less likely to happen.

For geospatial data providers, the implications are potentially substantial. On one hand, geospatial services rely on high-speed, reliable internet to transmit large volumes of data. If net neutrality is weakened or overturned, ISPs could prioritize their own services or those of partners, potentially throttling or imposing higher charges on data-heavy services like those offered by geospatial companies. This could increase operational costs and reduce the quality of service for end-users, impacting the geospatial industry’s growth and innovation.

On the other hand, reversing net neutrality rules could potentially benefit geospatial companies who can afford to pay to play. ISPs may offer premium service tiers, ensuring faster and more reliable data transmission for those willing to pay for it. Geospatial companies that can afford these premium services could experience improved data transfer speeds and reduced latency, enhancing their ability to deliver real-time data and analytics to clients. This would provide a competitive edge in a market where speed and efficiency are crucial.

Furthermore, a deregulated environment could spur ISPs to invest more in network infrastructure and technology, potentially leading to overall improvements in internet services. Enhanced infrastructure would benefit all users, including geospatial data providers, by providing faster and more reliable internet connections. 

Oil and Gas Exploration

Expect the oil and gas industry to expend significant resources on reversing agency decisions limiting oil and gas exploration and extraction. 

The Bureau of Land Management (BLM), the Environmental Protection Agency (EPA), and other federal agencies that regulate this industry have often relied on Chevron deference to interpret broad and sometimes ambiguous statutory mandates related to environmental protection, land use, and resource management. Without Chevron deference, these agencies will find it challenging to create and maintain regulations limiting oil and gas exploration. 

For the geospatial industry, which provides critical data for environmental assessments, site planning, and monitoring in oil and gas exploration, this regulatory uncertainty could have mixed effects. On one hand, less stringent regulations might lead to more exploration projects, increasing demand for geospatial data and services in the private sector. On the other hand, increased legal battles and regulatory uncertainty could delay projects and create a more volatile market environment, making it harder for geospatial companies to plan and invest confidently.

Conclusion

The Supreme Court’s reversal of Chevron deference marks a significant shift in the regulatory landscape that will impact a wide range of industries including the geospatial industry. While this decision introduces greater accountability to regulatory action, it also brings about greater uncertainty and potential volatility. For the geospatial industry, the immediate effects will include more limited federal and private budgets as spending is reallocated to legal teams. Longer term impacts will take time to materialize as litigation works its way through courts.  

Commercial satellite operators well seek opportunities to relax stringent debris mitigation requirements, but could also face new challenges if different regulatory bodies claim overlapping jurisdictions. Net neutrality’s future could directly impact the cost and efficiency of data transmission. If net neutrality is weakened, geospatial data providers might face higher costs and potential throttling, affecting service quality. However, the potential for premium service tiers and improved infrastructure could benefit those able to adapt to these changes, providing faster and more reliable data transmission.

In oil and gas exploration, while there may be a short-term boost in activity due to regulatory rollbacks, the long-term impact of increased legal uncertainty could temper growth. Environmental regulations, permit approvals, and compliance costs will be areas of heightened contention.

Overall, the geospatial industry, like many others, will need to navigate these changes carefully, balancing the opportunities presented by deregulation with the risks and uncertainties of a more contentious regulatory environment. Proactive legal strategies, increased advocacy, and strategic partnerships will be key to thriving in this new era.

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