Democracy & Technology Blog FCC gets squashed


The U.S. Court of Appeals for the D.C. Circuit ruled that the authority the FCC used to regulate Internet access providers is very limited. The ruling is obviously a victory for broadband Internet access providers. But it is also a victory for the rest of us. As the court noted, the legal interpretation the FCC fought to defend “would virtually free the Commission from its congressional tether.”
In Comcast v. FCC, the court said it was okay for Comcast to discriminate against peer-to-peer file sharing as necessary to manage scarce network capacity. The opinion was written by Judge David S. Tatel, a Clinton nominee.
The question before the court was whether the FCC has any jurisdiction to regulate Internet access providers’ network management practices. The FCC acknowledged it has no express statutory authority, but it argued that section 4(i) of the Communications Act of 1934 (47 U.S.C. ยง 154(i)) authorizes it to “perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions.”
Courts have referred to the commission’s section 4(i) power as its “ancillary authority.” The FCC successfully used this authority in 1968 to restrict the geographic area in which a cable company could operate, even though the Communications Act gave the commission no express authority over cable television at the time. The FCC acted reasonably when it limited the retransmission of distant broadcast signals by cable operators, according to the Supreme Court, because otherwise the commission’s ability to fulfill its statutory responsibility for fostering local broadcast service could have been thwarted.

The FCC couldn’t cite a single statutory responsibility that might justify Internet regulation

This and subsequent cases have established the principle that the FCC may exercise its “ancillary” authority only if it demonstrates that its action is “reasonably ancillary to the . . . effective performance of its statutorily mandated responsibilities.” In the present case, the FCC couldn’t cite a single statutory responsibility impacted as a result of interference with peer-to-peer communications by an Internet access provider.
Comcast v. FCC presents a fairly high hurdle for the FCC to overcome going forward to the extent it seeks to regulate the Internet on the basis of “ancillary” authority.
Public Knowledge is already at work on a backup plan. It recently filed a petition asking the FCC to reclassify high-speed Internet access as a “telecommunications” service subject to common carrier regulation under Title II of the Communications Act — “the home of some heavy-handed regulation, to be sure,” notes Susan Crawford (a former Special Assistant to the President for Science, Technology, and Innovation Policy). She nevertheless supports the idea.
One problem with this approach is the FCC has already taken the position that high-speed Internet access is not a telecommunications service subject to Title II common-carrier regulation. This determination was upheld by the Supreme Court in NCTA v. Brand X (2005). The commission’s logic, noted the Supreme Court, was that cable companies do not “offe[r] telecommunications service to the end user, but rather . . . merely us[e] telecommunications to provide end users with cable modem service.”
In other words, a product or service does not become “telecommunications” subject to heavy-handed Title II common carrier regulation just because it utilizes telecommunications. Imagine the consequences of taking the opposite approach and saying that if a product or service (insert your own example) includes a telecommunciations component the FCC in its discretion can treat it as “telecommunications.”
Public Knowledge’s targets don’t include any product or service, just broadband Internet access providers. The sweeping power it is urging the FCC to grasp, however, knows no such bounds.
It is fallacy to assume there can be one set of rules for broadband service providers and another set for everyone else. Since they are not monopolies, it will not be possible to relegate broadband Internet service providers to distinct legal categories for monopolies. The courts will have no choice but to ensure that their rights and responsibilities are reasonably consistent with ours, and ours with theirs.
Meanwhile, the FCC like all federal agencies needs a Congressional tether and thanks to the D.C. Circuit Court of Appeals it still has one. If in its wisdom Congress believes it is appropriate for the FCC to have statutory authority to regulate the Internet, it can always supply that.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.