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Tuesday, April 6, 2010

The Nobles Must Follow the Law
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The D.C. Circuit ruled today in favor of Comcast in the company's challenge to an FCC enforcement action concerning its provision of Internet service. The court's ruling reaffirms the primacy of the rule of law and the legislative authority of Congress to determine whether and how our nation's communications networks are to be regulated. I have said from the outset in my "The Law is Whatever the Nobles Do" series that the FCC's action against Comcast's Internet network management practices was unlawful because Congress has not delegated to the FCC regulatory authority over the provision of Internet services, and the FCC may not self-generate such authority through creative use of the doctrine of implied or "ancillary jurisdiction." The court's decision rests on the foundational principles that the FCC's regulatory authority is not unbounded, the agency is not free to make it up as it goes along and the FCC possess no plenary authority to regulate an Internet service provider's network management practices. That is to say, the administrative nobles in our system must follow the laws as Congress writes them; they do not stand above the law and cannot self-generate their legal authority.

As the D.C. Circuit wrote, the FCC may properly exercise its ancillary jurisdiction over matters not expressly mentioned in the Communications Act, but only when that exercise is reasonably ancillary to—that is, in support of—an expressly-delegated regulatory responsibility. In its Comcast-BitTorrent Order, the FCC could not show, despite strenuous efforts, that regulating Internet network management practices was reasonably related to any of its express regulatory mandates in the Communications Act. This all-important limitation on the exercise of its implied powers, according to the court, is what keeps the agency from freeing itself "from its congressional tether." Paraphrasing an earlier Supreme Court decision, the court observed that the FCC's Comcast decision, not only "'strain[ed] the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the Commission and the courts,'" it sought to "shatter them entirely."

It bears mention that the FCC's proposed "open Internet" rules are premised on the same jurisdictional theory—that the FCC may regulate on the basis of Congressional statements of policy alone (as opposed to statutorily mandated responsibility)—that the D.C. Circuit has now invalidated. I filed comments in the open Internet rulemaking on the sole issue of whether the FCC has regulatory authority to regulate the Internet generally and, more specifically, an Internet service provider's network management practices. My comments demonstrated that the Notice of Proposed Rulemaking proposes extensive regulatory constraints on the provision of Internet services and that the FCC lacks jurisdiction to adopt its proposals under the Communications Act and the controlling case law. Specifically, I demonstrated why the ancillary jurisdiction theory proffered by the FCC in the Comcast BitTorrent Order, its brief on appeal defending the Order before the D.C. Circuit, and in the jurisdictional section of the NPRM did not "hold water."

My network neutrality comments concluded as follows:

The NPRM places its proposed rules in a long continuum of prior FCC actions that purportedly concerned the "openness" of the Internet to demonstrate that it is not "writing on a blank slate in this proceeding." More specifically, the NPRM correctly notes that "it has long been U.S. policy to promote an Internet that is both open and unregulated." This is certainly true. The Act contains no Congressional directive to the FCC to regulate the Internet, interactive computer services, or information services. Sections 230(b) and 706(a) constitute the "ends" that Congress has identified for the Commission to pursue. To the extent that Congress has spoken about the "means," it has indicated an affirmative desire to leave the Internet and interactive computer services unregulated...
The [Communications] Act simply does not grant to the FCC general regulatory authority over the Internet, consistent with affirmative Congressional desire to keep it unregulated. And the Internet has flourished immensely under this framework. The NPRM abandons this wise policy course by proposing extensive regulation of Internet services pursuant to the very same statutory provisions and policies cited in support of its earlier de-regulatory moves. This strongly suggests that the rules proposed contravene both Congressional intent and the agency's own settled understandings of that intent.
The Commission's view that it may use its ancillary jurisdiction to regulate based solely on broad policies contained in the Act would give the Commission almost limitless jurisdiction to regulate any communications technology at will. This theory would essentially render the majority of the provisions of the Act meaningless, including the carefully crafted Congressional directives. Express delegations of regulatory authority by Congress are important for two reasons: they both give power and limit its exercise in ways agreed upon by our elected representatives through duly-enacted legislation. If there are to be "rules of the road" for the Internet, it is Congress that must write them. Paraphrasing Chief Justice Burger's observation in Midwest Video I, the explosive development of the Internet "suggests a need for a comprehensive re-examination of the statutory scheme as it relates to this new development, so that the basic policies are considered by Congress and not left entirely to the Commission and the courts."

The D.C. Circuit's Comcast ruling largely tracks my analysis of the flaws in the FCC's jurisdictional arguments, concluding that under the controlling precedents of the Supreme Court, the D.C. Circuit and the relevant precedents of other Circuit Courts of Appeal, the FCC may not regulate the network management practices of an Internet service provider as "reasonably ancillary" to its responsibilities under sections 1, 230(b), 201, 256, 257 and 623 of the Communications Act and section 706 of the Telecommunications Act of 1996.

In reaction to this court's ruling an FCC Spokesperson has stated:

Today's court decision invalidated the prior Commission's approach to preserving an open Internet. But the Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.

It thus appears that the FCC is now repudiating the "prior Commission's approach to preserving an open Internet," and may be considering "other methods for achieving this important end." This is surely a reference to rumored plans to "re-classify" broadband Internet access service from an "information service" to a common carrier "telecommunications service" so that it can be more pervasively regulated under the FCC's express regulatory authority pursuant to Title II of the Act. This would be inadvisable for many reasons noted by FCC Commissioner Robert McDowell, not the least of these is that such a move would send investors "running for the hills" and thereby undermine all the effort the FCC has put into developing its National Broadband Plan.

All of the above strongly suggests that the time has come for our elected representatives to take up the question of whether and how the FCC should regulate the provision of Internet services. Verizon EVP Tom Tauke has suggested that an "extreme makeover" of the Communications Act is now in order, including taking an ex post rather than ex ante approach to Internet service regulation. I have previously questioned whether one need approach this task with a "scalpel or a steamroller." Regardless of whether the Act undergoes an extreme makeover or just a slight "nip & tuck," the continuing legal uncertainty with respect to FCC jurisdiction over the provision of Internet services cries out for legislative attention.

In the meantime, the Commission is well within its rights to expand its aspirational Internet policy principles to include the principles of non-discrimination and transparency, and may wish to use the record it is building on the open Internet to make recommendations to Congress for additional authority. But the FCC should refrain from attempting to codify these principles under either its ancillary jurisdiction or through the expedient of regulatory "reclassification" in the absence of an explicit delegation of authority by Congress over either the Internet or Internet service providers.

Image: Scales Of Justice, a Creative Commons Attribution (2.0) image from crobj's photostream

posted by Barbara Esbin @ 4:16 PM | Broadband , Cable , Communications , Net Neutrality , Neutrality , The FCC

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