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Jurisdiction: The $64,000 Question

Progress Snapshot
Release 5.12 November 2009

by Barbara Esbin*

View as PDF

Matthew Lasar asks the $64,000 question on Ars Technica: "Did Congress really give the FCC power to protect the Net?"[1] The answer, as I have written repeatedly in an essay, law review article, and together with Professors James B. Speta and Glen O. Robinson in an Amicus Brief, is: No, it did not.[2] At least, it did not for any of the reasons advanced by the Federal Communications Commission to date. If the FCC is to regulate the Internet – an outcome I do not think necessary or beneficial – we would be better served by having Congress debate and pass such legislation, than by having unelected government officials attempt to make it up as they go along.

The jurisdictional question, as Lasar notes, lies at the heart of the viability of the FCC's proposed net neutrality rules. The answer depends on one's view of what regulatory powers Congress bestowed upon the agency in the Communications Act of 1934, as amended.[3] Broadly stated, per Title I, Section 1 of the Act, the FCC was created and given jurisdiction over interstate wire and radio commerce in communication for the purpose of making available "a rapid, efficient, Nationwide, and world-wide wire and radio communication service with adequate facilities at reasonable charges."[4] It is in the understanding of specifically how the FCC was to go about carrying out this broad purpose that reasonable minds disagree.

The FCC is a creature of Congress. It has no "common law" ability to make law (or act in a legislative capacity), save for those powers expressly delegated to it by Congress in the Communications Act. The FCC's specific statutory responsibilities with respect to the services of common carriers, spectrum-based services, and the services of cable operators are spelled out, in great detail, in Titles II, III, and VI of the Act.[5] There is no analogous express delegation of regulatory authority over the Internet or Internet services in the Act. The FCC has made clear its view that it may regulate the network management practices of broadband Internet service providers under its implied or "ancillary jurisdiction."

Ancillary jurisdiction is an FCC-created and judicially-sanctioned doctrine that permits the agency to regulate services within its subject matter jurisdiction – interstate wire and radio communications – where such regulation is "reasonably ancillary" to its statutory responsibilities under the Act. Ancillary jurisdiction is a statutory gap-filler that has been upheld sparingly by the courts. There is no argument over the first prong of the test – Internet services are indisputably a form of wire and radio communications. It is the second prong of the test for ancillary jurisdiction that is problematic in the case of Internet service regulation. To what expressly delegated regulatory responsibility are net neutrality rules "reasonably ancillary?" As the D.C. Circuit has found, to meet this test, there must be a requisite degree of "ancillariness" between the regulation proposed, and the statutory responsibility to which it is purportedly ancillary.[6]

In its net neutrality rulemaking the FCC, as it did in its 2008 Comcast P2P Order, relies upon the doctrine of ancillary jurisdiction as the source of its authority "to regulate the network practices of facilities-based broadband Internet access service providers."[7] In the Comcast P2P Order, the FCC cited no fewer than seven separate statutory provisions in support of its ancillary jurisdiction to regulate the Internet network management practices of Comcast.[8] This exercise — searching for snippets and threads of regulatory authority over a communications medium as significant as the Internet in multiple, unrelated statutory provisions — itself should signal to the reviewing court that the exercise is unlikely to produce a credible source of authority. In other words, Congress does not, in the words of the D.C. Circuit, hide elephants in mouseholes.[9]

The FCC's Net Neutrality NPRM devotes a mere four out of 186 paragraphs on the agency's delegated authority to prescribe the proposed rules, and whittles the list of direct statutory sources for its ancillary jurisdiction down to just two substantive provisions: Section 230(b) and Section 706(a).[10] The problem with both of these provisions as sources of regulatory authority is that neither actually directs the FCC to regulate anything in particular. Neither is what one would call an "operative" or "substantive" source of regulatory authority. As demonstrated in greater depth in my law review article, Undue Process,[11] and in the joint Amicus Brief,[12] Sections 230(b) and 706(a) are themselves statements of Congressional policy incapable of supporting FCC regulation of either the Internet or Internet services. If broadband Internet services are as critical to national well-being as many posit, Congress would hardly have scattered the FCC's regulatory authority over them in the interstices of seven or more disparate provisions of the Act.[13] To the contrary, it would have created a new Title governing Internet services directly, as it has for common carrier, spectrum-based broadcast, and cable services.

Lasar observes in his article:

[O]ne of the most striking aspects of the [Communications Act] is how little it actually says about the Internet. The only part of the 333-page document that specifically mentions the ‘Net is Section 230 of the legislation.

The most important part of that block of words reads as follows:

(b) POLICY.—It is the policy of the United States—
(1) to promote the continued development of the Internet and other interactive computer services and other interactive media;

(2) to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation;

(3) to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet and other interactive computer services;

(4) to remove disincentives for the development and utilization of blocking and filtering technologies that empower parents to restrict their children's access to objectionable or inappropriate online material; and

(5) to ensure vigorous enforcement of Federal criminal laws to deter and punish trafficking in obscenity, stalking, and harassment by means of computer.

It is evident that the five separate policy statements contained in Section 230(b) are quite broad and vague and can be read to contradict one another in several material respects. But read as a whole, the statements more convincingly repel, rather than support, FCC regulation of the broadband Internet and interactive computer services. Section 230(b)(2) containing perhaps the most directly relevant sub-provision: "[It is the policy of the United States –] to preserve the vibrant competitive free market that presently exits for the Internet and other interactive computer services, unfettered by Federal or State regulation." The remainder of Section 230 creates "Good Samaritan" immunity for Internet service providers and other Internet portals that block objectionable content; it specifies no role for the FCC and calls for no FCC rules for its implementation.

In the case of Section 706(a), which was appended as a footnote to Section 7 of the Communications Act by the Telecommunications Act of 1996, Congress directed the FCC "to encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans." As Lasar notes, Section 7 itself declares that:

It shall be the policy of the United States to encourage the provision of new technologies and services to the public. Any person or party (other than the Commission) who opposes a new technology or service proposed to be permitted under this Act shall have the burden to demonstrate that such proposal is inconsistent with the public interest.

The sole regulatory responsibility delegated to the FCC in 706(b) is the obligation to produce a periodic report to Congress on whether advanced telecommunications are being deployed on a reasonable and timely basis. Only upon a negative finding, which the FCC has never made, is the FCC directed to take any action at all.[14] The FCC itself has held that Section 706 does not expand its regulatory jurisdiction in any respect; any action the FCC may wish to take upon a negative report must be found elsewhere in the Act. So too, the policy expressed in Section 7 itself would appear at odds with FCC rules that may effectively relegate new network management technologies to a "guilty-until-proven-innocent" status.

How then do these policy provisions give the FCC the authority to codify and expand its four Internet policy principles into six "rules of the road" for all broadband Internet access service providers – wireline, wireless and satellite – as the Net Neutrality NPRM proposes? They don't. There is no close nexus or requisite degree of ancillariness between, for example, proposed rule "§ 8.13 Nondiscrimination," decreeing that "Subject to reasonable network management, a provider of broadband Internet access service must treat lawful content, applications, and services in a nondiscriminatory manner," and the Section 706(a) charge that the FCC "encourage the deployment of advanced telecommunications capability." To the contrary, broadband deployment is more likely to be adversely affected by rules requiring broadband ISPs to them to repeatedly query Mother FCC: "May I do x, y, or z on my network to manage congestion?"

Neither do the various policy pronouncements contained within Section 230(b)—several of which concern ISPs enabling "blocking and filtering technologies" so that users can restrict access by children to objectionable or inappropriate online material—lend themselves to supporting a nondiscriminatory carriage requirement. There is simply no reasonable relationship between either the specific policy directives or overall purpose of Section 230 and the FCC's proposed rules.[15]

Nor should we want an FCC that just makes it up as it goes along on the foundational question of its own regulatory jurisdiction. Unchecked regulatory discretion under the amorphous doctrine of "ancillary jurisdiction" is every bit as big a danger to a free and open Internet as any of the other dangers the FCC posits to support its net neutrality rulemaking.

I am not alone in my discomfort with the FCC's reliance on ancillary jurisdiction to support its net neutrality regime. The Electronic Freedom Foundation has also raised alarms about the FCC's proposed expansion of its regulatory domain through ancillary jurisdiction because the theory the FCC posits to justify its net neutrality rules simply has no limits:

But Congress has never given the FCC any authority to regulate the Internet for the purpose of ensuring net neutrality. In place of explicit congressional authority, we expect the FCC will rely on its "ancillary jurisdiction," a position that amounts to "we can regulate the Internet however we like without waiting for Congress to act." (See, e.g., the FCC's brief to a court earlier this year). That's a power grab that would leave the Internet subject to the regulatory whims of the FCC long after Chairman Genachowski leaves his post.

Hence the danger. If "ancillary jurisdiction" is enough for net neutrality regulations (something we might like) today, it could just as easily be invoked tomorrow for any other Internet regulation that the FCC dreams up (including things we won't like). For example, it doesn't take much imagination to envision a future FCC "Internet Decency Statement. ... And it's also too easy to imagine an FCC "Internet Lawful Use Policy ..."[16]

I agree completely with these concerns. Unchecked administrative power, no matter how well-intentioned, is dangerous. The problem with the doctrine of ancillary jurisdiction is that it is potentially limitless as exercise after exercise takes the FCC further and further away from its core congressionally-delegated regulatory responsibilities. 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. It is particularly important that unelected government officials stay within the bounds of these delegations. Our individual freedoms as well as our democracy depend on it.


Related PFF Publications

* Barbara Esbin is a Senior Fellow and Director of the Center for Communications and Competition Policy at The Progress & Freedom Foundation. The views expressed in this report are her own, and are not necessarily the views of the PFF board, fellows or staff.

[1] Matthew Lasar, "Did Congress really give the FCC power to protect the Net?," Ars Technica, Nov. 1, 2009, http://arstechnica.com/tech-policy/news/2009/11/does-the-fcc-have-authority-to-enforce-net-neutrality-rules.ars.

[2] Barbara Esbin, The Progress & Freedom Foundation, "'The Law is Whatever the Nobles Do:" Undue Process at the FCC, Progress on Point No. 15.12, Aug. 2008, http://www.pff.org/issues-pubs/pops/2008/pop15.12undueprocess.pdf; Barbara Esbin and Adam Marcus, "The Law is Whatever the Nobles Do": Undue Process at the FCC, 17 CommLaw Conspectus *1 (2009), available at http://commlaw.cua.edu//articles/v17/17.2/Esbin-Marcus-Revised.pdf; Brief Amicus Curiae of Professors James B. Speta and Glen O. Robinson and The Progress and Freedom Foundation in Support of Petitioner Comcast Corporation and Urging That the FCC's Order Be Vacated, Comcast Corp. v. FCC, No. 08-1291 (D.C. Circuit Court of Appeals), available at http://www.pff.org/issues-pubs/filings/2009/081009-amicus-brief-comcast-vs-FCC-(08-1291)pdf.

[3] Communications Act of 1934, as amended, 47 U.S.C. §§ 151, et al ("The Act").

[4] 47 U.S.C. § 151 (2000).

[5] See Titles II, III, and VI of the Communications Act of 1934, as amended, 47 U.S.C. §§ 201-276; §§ 301-399b §§ 521-573 (2002).

[6] NARUC v FCC, 533 F.2d 601, 613 (D.C. Cir. 1976).

[7] In the Matter of Preserving the Open Internet; Broadband Industry Practices, Notice of Proposed Rulemaking, 2009 FCC LEXIS 5421, FCC Release Number 09-93, ¶ 83 (Oct. 22, 2009) ("Net Neutrality NPRM"), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-93A1.pdf.

[8] In re Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer Applications; Broadband Industry Practices, Petition of Free Press et al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC's Internet Policy Statement and Does Not Meet an Exception for "Reasonable Network Management," Memorandum Opinion and Order, 23 F.C.C.R. 13,028, ¶ 1 (Aug. 1, 2008) ("Comcast P2P Order"), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-08-183A1.pdf.

[9] Am. Library. Ass'n. v. FCC, 406 F3d 689, 704 (D.C. Cir. 2005), quoting Whitman v. Am. Trucking Ass'ns 531 U.S. 457, 468 (2001).

[10] Net Neutrality NPRM, at ¶¶ 83-87.

[11] Barbara Esbin and Adam Marcus, "The Law is Whatever the Nobles Do": Undue Process at the FCC, 17 CommLaw Conspectus *1 (2009), available at http://commlaw.cua.edu//articles/v17/17.2/Esbin-Marcus-Revised.pdf.

[12] Brief Amicus Curiae of Professors James B. Speta and Glen O. Robinson and The Progress and Freedom Foundation in Support of Petitioner Comcast Corporation and Urging That the FCC's Order Be Vacated, Comcast Corp. v. FCC, No. 08-1291 (D.C. Circuit Court of Appeals), available at http://www.pff.org/issues-pubs/filings/2009/081009-amicus-brief-comcast-vs-FCC-(08-1291).pdf.

[13] Indeed, in its Brief to the D.C. Circuit supporting the Comcast P2P Order, the FCC cited yet an eighth provision of the Act, Section 543 (governing cable rate regulation, not even mentioned in the underlying Order, as supporting its ancillary jurisdiction to regulate Comcast's cable modem network management practices. See Brief for Respondents, Comcast Corp. v. FCC, No. 08-1291 (D.C. Circuit Court of Appeals), http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-293573A1.pdf. According to the FCC's General Counsel, the Brief more fully explicates the FCC's jurisdictional basis for the rulemaking than the NPRM itself. See "Statutory Authority and Ancillary Jurisdiction," Tech Law Journal Daily Email Alert No. 2,008, Oct. 23, 2009 (TLJ asked Austin Schlick, The FCC's General Counsel, at the FCC's meeting on October 22, 2009 what is the statutory authority for the just released NPRM. He said "Read our brief in the Comcast case.").

[14] 47 U.S.C. § 706(b) (2000).

[15] The Net Neutrality NPRM does include one new jurisdictional basis insofar as it proposes to extend the Internet policy principles to wireless Internet access service providers: the FCC's authority to allocate and license spectrum usage pursuant to Title III. Net Neutrality NPRM at ¶ 86. As the FCC notes, it has "relied upon Title II authority in the past to regulate services provided by wireless carriers." Id. Unfortunately, this is the extent of the FCC's guidance on precisely how its Title III radio spectrum allocation and licensing authority would support a wireless broadband Internet access service rule limiting the provider's ability, for example, to manage congestion on its network.

[16] Corynne McSherry, The Electronic Frontier Foundation, "Is Net Neutrality a FCC Trojan Horse?," Deeplinks Blog, Oct. 21, 2009, http://www.eff.org/deeplinks/2009/09/net-neutrality-fcc-perils-and-promise.



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