“Where are you going?” Aunt Beru, Star Wars (1977).
I wrote in an earlier post that the FCC lacked jurisdiction to enact its proposed net neutrality rules as written. Today the D.C. Circuit issued an opinion holding that the FCC failed to justify ancillary jurisdiction “over Comcast’s network management practices.” (Comcast v. FCC, No. 08-1291 at 3 (D.C. Cir. Apr. 6, 2010).) In this post, I explain what the court did and what options remain open to the FCC in its net neutrality proceeding.
In the Comcast case, the court applied its existing two-part ancillary jurisdiction test, which is satisfied if (1) the FCC’s general jurisdictional grant under Title I of the Communications Act covers the regulated subject and (2) the regulations are reasonably ancillary to the FCC’s effective performance of its statutorily mandated responsibilities.” (Comcast v. FCC, No. 08-1291 at 7.) The parties conceded that the first part of the test had been met because Comcast’s Internet service qualifies as “interstate and foreign communication by wire” within the meaning of Title I of the Communications Act. (Id. at 7-8 (citing 47 U.S.C. § 152(a).) The case thus turned on whether the regulation of Comcast’s network management practices was reasonably ancillary to the FCC’s statutory responsibilities for “something.”
The court rejected the FCC’s reliance on Sections 230(b) and 151 of the Act because those sections are merely statements of policy, and “policy statements alone cannot provide the basis for the Commission’s exercise of ancillary authority.” (Comcast v. FCC, No. 08-1291 at 22.) The court likewise dismissed section 706 of the Telecommunications Act of 1996 as a basis for statutory jurisdiction because the FCC has previously held that section 706 does not constitute an independent grant of authority. (Comcast v. FCC, No. 08-1291 at 31.)
The court noted that other provisions that the FCC cited in support of its authority – sections 256, 257, 201, and 623, and its Title III authority over broadcasting – might include express delegations of authority, but the court held that these provisions nevertheless did not support the FCC’s exercise of ancillary authority in this case. The court concluded that section 256 could not support ancillary jurisdiction because that section disclaims any delegation of authority. (Comcast v. FCC, No. 08-1291 at 32.) Section 257 is inapplicable because there is no connection between that section’s reporting requirement and the regulation of network management. (Comcast v. FCC, No. 08-1291 at 33.) The court refused to consider the FCC’s arguments pursuant to section 201 and Title III because the FCC had not developed those bases for jurisdiction in the FCC’s order. (Comcast v. FCC, No. 08-1291 at 33-34.) And the court rejected the FCC’s exercise of jurisdiction pursuant to section 623 because that section is narrowly concerned with basic tier cable service rates and the FCC had not linked network management to basic tier cable rates. (Comcast v. FCC, No. 08-1291 at 35-36.)
Given this thorough rejection of the FCC’s asserted bases for exercise of its ancillary authority, what options does the FCC have left? Below are four possibilities, in no particular order:
Option One: The FCC could try to justify ancillary jurisdiction using new arguments. If the FCC tries this route, it’s going to need to be much more specific than the very general statements of jurisdiction contained in the net neutrality NPRM. In the Comcast case, the FCC tried to rely on a general assertion of jurisdiction based on dicta in the Brand X case, in which the Supreme Court said “the Commission remains free to impose special regulatory duties on [ISPs] under its Title I ancillary jurisdiction.” (Comcast v. FCC, No. 08-1291 at 13.) Although the D.C. Circuit court conceded that this statement might allow the FCC to impose some kinds of obligations on broadband providers, the court held that “each and every assertion of [ancillary] jurisdiction” must be “independently justified.” (Comcast v. FCC, No. 08-1291 at 15.) The FCC would thus have to find an actual, statutorily mandated responsibility for each of the six proposed net neutrality regulations. Given the court’s skepticism in Comcast, that seems like a tall order. Thus, in the short term, the net neutrality NPRM is likely going nowhere.
Option Two: The FCC could abandon its quest to regulate net neutrality. This option would certainly survive legal scrutiny, but appears to have been rejected already by the FCC majority (See statements here, here, and here (although Chairman Genachowski didn’t issue his own statement, instead relying on a media representative)). Presumably, the majority feels compelled to “do something” after issuing an NPRM on the issue.
Option Three: Classify broadband Internet access as a “telecommunications service.” This is the option favored by Free Press, among others, who believes it’s an “easy fix.” In my view, this approach would be far from “easy.” Although an agency can reinterpret a statute, it can only do so when it provides a reasoned explanation for its change in interpretation. At a minimum, this would require a notice and comment rulemaking and, presumably, new data or changed circumstances. None of that seems so easy to me – not to mention that heavy-handed Title II regulation of the Internet could very well cause chaos in the broadband access market, which has never been subject to Title II regulation as a whole.
Option Four: Finally, the FCC could ask Congress to revise the communications statutes to provide express jurisdiction over broadband. Such an approach would be legally sound and the most intellectually coherent. Agencies are supposed to act only pursuant to delegated authority. Any common-sense reading of the Telecommunications Act of 1996 clearly indicates that Congress intended that the FCC leave the Internet alone. Given that expression of Congressional intent, a change in course should be prescribed by Congress, not an agency without clear delegated authority.
[Edit] Option Five: In my initial post, I forgot to add the most immediate option – appeal to the Supreme Court. I forgot to add it because success seems so unlikely. Nevertheless, it is an option the FCC could try to pursue.
“Looks like I’m going nowhere . . . .” Luke, Star Wars (1977).
TAGS:
net neutrality