Thursday, August 6, 2009 - The Progress & Freedom Foundation Blog

Belt & Suspenders

Representatives Markey and Eshoo recently introduced a bill providing the Federal Communications Commission with extensive regulatory authority over the Internet entitled the "Internet Freedom Preservation Act of 2009." The bill would amend Title I of the Communications Act, among other things, to: (i) include a new "Internet Freedom" section containing the FCC's four Internet policy principles and adding a guideline on consumer notification; (ii) impose on Internet access service providers statutory net neutrality duties that incorporate the policies contained in the FCC's Internet Policy Statement as interpreted in the Comcast P2P Order, and other duties that are reminiscent of common carrier obligations; (iii) require the FCC to promulgate rules ensuring that Internet access service providers fulfill the net neutrality duties described in the bill and to establish complaint procedures for aggrieved consumers; (iv) describe the FCC's compliance enforcement authority, including its ability to impose forfeiture liability regardless of whether the provider holds an FCC-issued license; and (v) define the terms used in the provision so that its applicability and scope are evident. If the FCC already has the sweep of jurisdiction to regulate Internet services that it claimed in its 2008 Comcast P2P Order, why would it require a statutory amendment such as the Markey-Eshoo bill?

My colleague Adam Marcus and I recently published a law review article in the Summer 2009 Edition of CommLaw Conspectus, the Journal of Communications Law and Policy that is highly critical of the legal and procedural bases of the Federal Communications Commission's August 2008 Comcast P2P Order. The article, entitled "'The Law is Whatever the Nobles Do;' Undue Process at the FCC," concludes that the FCC's action was beyond the scope of its delegated authority under the Communications Act and that serious flaws exist in the procedural means by which the FCC reached its decision in the case. In particular, the article focuses on the significant defects in the FCC's dual claims that it has so-called "ancillary jurisdiction" to enforce national Internet policy in the absence of an express delegation of regulatory authority over the Internet, and that it may simultaneously exercise that authority by adjudicating the claims contained in the Free Press Complaint, all of which were based on alleged violations of the FCC's 2005 Internet Policy Statement. We have also published an executive summary of the main arguments contained in the lengthy article.

The article dissects the bases upon which the FCC claimed authority to regulate the Internet services provided by Comcast. It demonstrates that the doctrine of ancillary jurisdiction is far more constrained in scope than the expansive powers claimed by the FCC, and that there is no statutory mandate to which this exercise of jurisdiction can be said to be "reasonably ancillary." Among other failings discussed in the article is the fact that the FCC has never concluded a single rulemaking proceeding to regulate cable modem services, broadband industry practices or to promulgate the rules embodying the consumer entitlements contained in the Internet Policy Statement. In other words, even assuming the agency had regulatory authority over Comcast's Internet service, it had no rules of behavior to enforce against the operator. The FCC's action solely, and improperly, rests upon broad and unenforceable policy principles, that cannot, consistent with the Administrative Procedures Act, provide the basis for an enforcement action or adjudication. In addition, at the time it applied the policy principles to the network management practices of Comcast, the FCC lacked established procedures for handling such so-called "formal complaints" against non-common carriers like Comcast.

The Markey-Eshoo bill is but the latest Congressional attempt to provide the FCC with delegated authority to regulate Internet service providers, as sure an indication as any that Congress had not previously delegated such regulatory authority to the FCC. It is noteworthy that the "Internet Freedom" bill would address nearly all of the jurisdictional and procedural flaws identified in our Undue Process article.

As our article explains, in the Comcast P2P Order, the FCC effectively imposed a broad non-discriminatory carriage requirement, as well as several additional new rules of behavior, on all broadband Internet service providers. It also created whole new enforcement mechanisms applicable to entities bringing and defending against claims that the Internet Policy Statement has been violated. It is likely that Congress understands all too well that the FCC's attempt to stitch a patchwork quilt of regulatory jurisdiction over the Internet out of snippets of statutory policy and threads of authority pertaining to services wholly unrelated to the provision of broadband Internet service will not withstand its first washing through the court system. If, as the FCC claims, it already has the sweeping regulatory authority used in the Comcast case to enforce the Internet Policy Statement, a bill such as this would appear unnecessary. This belt & suspenders approach to regulatory authority strongly suggests that the FCC's claimed jurisdiction to regulate Internet services will not hold up on appeal.

posted by Barbara Esbin @ 5:03 PM | Broadband , Capitol Hill , Net Neutrality , Regulation , The FCC