February 3, 2011 | By Abigail Phillips

Part I: FCC “Ancillary” Authority to Regulate the Internet? Don’t Count on It

The FCC published its long-awaited final Report and Order on net neutrality at the end of December (more on that in part 2 of this post), but the debate is far from over. Republican members of Congress have loudly voiced their displeasure with the attempt to regulate internet activity; they’ve already filed a bill putting internet regulatory authority solely in the hands of Congress. Democratic members have filed their own bill establishing clear regulatory authority in the FCC, and they generally complain that the regulations don’t go far enough.

In addition, Verizon and MetroPCS recently challenged the FCC Order in the D.C. Circuit. Since the Order hasn’t yet been published in the Federal Register, we think they’ll have an uphill battle arguing that the issue is ripe for review. But it’s clear the companies are filing now for a reason: to try to ensure that the Order is reviewed by the same court that last year held the FCC had overstepped its authority in trying to regulate Comcast for its non-neutral practices regarding BitTorrent.

In that case, the Court rejected the FCC’s overbroad argument that it had “ancillary” jurisdiction to discipline Comcast based on its mandates under the Telecommunications Act. Surprisingly, the FCC hasn’t really changed its position. The Order focuses on Section 706 of the Telecommunications Act, along with a host of other provisions to again argue—yes—ancillary jurisdiction to regulate the Internet, despite the D.C. Circuit’s earlier rejection of this very theory. It’s as if the FCC hopes that by throwing everything within reach at the problem, a court is bound to find at least one justification for the kind of broad regulatory authority over the Internet the Commission now seeks.

We’re wholly in favor of net neutrality in practice, but a finding of ancillary jurisdiction here would give the FCC pretty much boundless authority to regulate the Internet for whatever it sees fit. And that kind of unrestrained authority makes us nervous about follow-on initiatives like broadcast flags and indecency campaigns. In general, we think arguments that regulating the Internet is “ancillary” to some other regulatory authority that the FCC has been granted just don’t have sufficient limitations to stop bad FCC behavior in the future and create the “Trojan horse” risk we have long warned about.

For what it’s worth, Section 706 itself isn’t a great hook for FCC authority to regulate non-neutral behavior. 706 authorizes the FCC to take steps to stimulate build-out of telecommunications infrastructure, especially in order to increase the reach of telecom services to more Americans. (In the language of the statute, the FCC “shall encourage the deployment on a reasonable and timely basis of advanced communications capability.”) While promoting network openness may somehow result in the building of new infrastructure—laying more fiber, etc.—the suggestion that regulating the Internet is “ancillary” to the effective performance of the FCC’s 706 responsibilities is a stretch and seems far beyond what Congress intended with this section. None of the other provisions cited in the Order are very promising either.

If the D.C. Circuit does hear the Verizon and MetroPCS cases, we think it’s very likely that they’ll again hold that the FCC’s latest argument for ancillary jurisdiction under 706 doesn’t give it a pass to regulate the Internet.

In the second part of this post, we’ll look at the main provisions of the final Report and Order and see how those compare with EFF’s comments on the FCC’s original Notice of Proposed Rulemaking.


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