Today on Telecom Mythbusters: FCC Ancillary Authority in Comcast/BitTorrent

Cable gets a lot of mileage out of repeating things over and over until folks believe it’s true. Today on Telecom Mythbusters I’d like to focus on the question of “ancillary” authority and regulating broadband. The cable guys generally circulate two myths about this.

1) Ancillary jurisdiction by the FCC is an exceedingly rare, wacky, way out thing and the fact that net neutrality advocates even want to rely on it shows how way out there and kooky it is.

2) The D.C. Circuit has been busy trimming back ancillary jurisdiction so that it really doesn’t exist anymore. Specifically, the D.C. Cir. 2005 decision in American Library Association v. FCC, 406 F.3d 689 (D.C. Cir. 2005) (and, to a lesser degree, MPAA v. FCC, 309 F.3d 796 (D.C. Cir. 2002) worked some kind of mojo against the expansive grant of power by the Supreme Court in United States v. Southwest Cable, 392 U.S. 157 (1968) and the Supreme Court’s explicit statement in Brand X so that the FCC cannot regulate broadband access and prohibit Comcast from targeting specific applications such as BiTtorrent under ancillary jurisdiction. A sub-myth of this is “Title I cannot be the source of authority on its own.”

Marvin Ammori, General Counsel of Free Press, has written a stunning tour de force rebutting these arguments. The 100+ page filing masterfully traces the FCC’s authority under Title I and in this particular proceeding. But for those who don’t want to read through the whole thing, I will give my own take below.

I must once again warn readers that this will be a breathtakingly dull review of applicable case law, along with an examination of FCC precedents and does not go to the juicier merits of policy (not that I expct this to stop the Brett-bot from his inevitable comments). If you do not find legal minutia fascinating beyond words, if you do not thrill at the discussion of the subtle differences between a “Telecommunications Service Provider” and a “Common Carrier,” then for God’s sake, turn back now! Lest your brain dissolve into tapioca pudding from the awesome power of legal analysis unleashed.

(and for Brett: Blah blah blah evil blah blah Free Press blah blah MAP blah blah Ginger)

Otherwise, to see both myths BUSTED, read more below….

Marvin begins by running through the relevant Supreme Court precedent on Title I authority and demonstrates that, contrary to what folks would like to claim, Title I is actually an independent source of authority to carry out any of the Commission’s responsibilities under the act. Marvin then lists numerous statutory provisions that would be frustrated if the Commission lacked authority to prohibit Comcast’s “network management” practices at issue in our complaint. Marvin also demonstrates that the FCC has relied upon TItle I authority in numerous cases pertaining to the regulation of Internet services, such as VOIP, and that the D.C. Circuit has upheld the exercise of Title I authority to require VOIP providers to comply with E911 rules. (Vonage Holdings Corp. v. FCC, 489 F.3d 1232 (D.C. Cir. 2007)).

In addition, Marvin points out that Comcast’s narrow interpretation would have some rather nasty unintended consequences for Comcast (and other broadband providers). Notably, Comcast and other broadband providers absolutely rely on the FCC’s ability to preempt state regulation. But the FCC can only preempt state authority where the FCC itself has authority. If the Commission lacks authority to regulate Comcast’s network management practices under Title I, then it also lacks authority to preempt state authority over regulation of broadband services.

As icing on the cake, Marvin quotes Comcast’s own motion seeking dismissal of the class action against Comcast in California district court. There, Comcast asserts that the network management practices at issue are “within the primary FCC jurisdiction” and assert that only the FCC can regulate its network practices and therefore any state claims or claims under federal law are preempted. While inconsistency in argument is hardly an unusual course for legal argument, it certain makes one forum suspicious to see the polar opposite argued elsewhere.

Which brings us to the two cases repeatedly cited for the proposition that the D.C. Cir. has “trimmed back” the FCC’s ancillary authority. Indeed, Comcast would argue that the D.C. has so trimmed this once fertile source of authority that it has gone from fighting cock to waddling capon. And, I have no doubt that if the DC Circuit were writing on a blank slate, the argument that Title I provides an independent source of authority would meet a chilly reception indeed. Alas for Comcast (and happily for us), the D.C. Circuit does not write on a blank slate. It addressed precisely this question in CCIA v. FCC, 693 F.2d 198 (D.C. Cir 1982). In affirming the FCC’s Title I authority to regulate the “enhanced services” and sale of customer premise equipment (CPE) previously regulated under Title II and reclassified under Title I, the D.C. Cir. said:

The Commission’s exercise of ancillary jurisdiction to impose the separation requirement on AT & T is an integral part of the Computer II regulatory scheme. Several parties attack the validity of this assertion of ancillary jurisdiction by the Commission. In United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968), it was settled beyond peradventure that the Commission may assert jurisdiction under section 152(a) of the Act over activities that are not within the reach of Title II.78 In that case, however, the Supreme Court limited the Commission’s jurisdiction to that which is “reasonably ancillary to the effective performance of the Commission’s various responsibilities.” One of those responsibilities is to assure a nationwide system of wire communications services at reasonable prices…..
In designing the Communications Act, Congress sought “to endow the Commission with sufficiently elastic powers such that it could readily accommodate dynamic new developments in the field of communications.” Congress thus hoped “to avoid the necessity of repetitive legislation.” In Computer II the Commission took full advantage of its broad powers to serve the public interest by accommodating a new development in the communications industry, the confluence of communications and data processing. Because the Commission’s judgment on “how the public interest is best served is entitled to substantial judicial deference,” the Commission’s choice of regulatory tools in Computer II must be upheld unless arbitrary or capricious. Our review of the Commission’s decision convinces us that the Commission acted reasonably in defining its jurisdiction over enhanced services and CPE. We therefore uphold the Computer II scheme.

Since this here proceeding is the direct descendant of the Computer II regime upheld in CCIA v. FCC, it strikes me as rather difficult to find that this reasoning does not apply here and convey upon the Commission equal discretion to regulate under Title I.

Indeed, rather than “trimming back” ancillary authority, both American Library Association and MPAA are at considerable pains to distinguish the facts of those cases from CCIA and the regulation of information services under Title I. In MPAA, where the FCC tried to require mandatory video description, the D.C. Cir. found that requiring video description mandated creation of specific content — and the Communications Act bars the FCC from dictating content to broadcasters. In American Library Association, the court invalidated the FCC’s broadcast flag regulations because broadcast flag regulated use of the content after a transmission — and thus fell outside the FCC’s ancillary jurisdiction which regulates “transmissions by wire or radio.”

So….on the myth that the FCC can’t regulate broadband under Title I, this myth is definitely —
BUSTED…..BUSTED…..BUSTED!!!!!!!

Stay tuned . . . .

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6 Comments

  1. Brett Glass says:

    Harold, disparaging ad hominem remarks, such as the ones you have directed at me above do not help your argument or Marvin’s, but they do hurt your image. And your credibility.

    For an simple, elegant rebuttal of Marvin’s strained, flawed, and self-servingly one sided analysis, see:

    _or_pdf=pdf&id_document=6519866175″ rel=”nofollow”>http://fjallfoss.fcc.gov/pr…

    Also, remember that the author of the FCC’s four “principles,” Michael Powell, himself said that he did not believe that they were enforceable and hence should not be construed as rules.

    Of course, the above will not prevent the lawyers and lobbyists — who want to earn money by creating “crises” and then soliciting money to deal with them — from bloviating on the subject.

  2. Brett Glass says:

    Quick followup: Since your blogging software seems to have mangled the URL in the message above, I have run it through TinyURL. To view Comcast’s memo, see

    http://preview.tinyurl.com/

    which explains in detail why current law prohibits the FCC from regulating small and independent ISPs out of business — leaving a duopoly and destroying consumer choice. It’s not legal to do so, no matter how much you, Larry Lessig, Tim Wu, and other “inside the Beltway” lawyers would like to do it.

  3. Harold says:

    Brett:
    You started sos trong, then devolved to blah blah blah Ginger.

    Or, from Dilbert’s “Seven Habits of Highly annoying People”: You will not realize this carton is about you.

  4. Brett Glass says:

    Alas, Harold, that cartoon appears to be more about you than about me. Instead of addressing the substance of my argument, you’re reacting solely to the name at the top of my posting — just like the dog in the cartoon.

  5. publius says:

    Ok – let’s assume Title I authority is as broad as we think. And let’s assume that we want to impose say 3 regulations (X, Y, Z) on broadband access. Are we now indifferent b/w the following scenarios:

    1 – Title I regulation with XYZ added

    2 – Title II regulation with forbearance of everything except XYZ

    I’m just trying to think through the implications of a wide reading of Title I in terms of service classifications.

  6. Harold says:

    Publius:

    It depends on the regulations. Title II is very useful because it includes both an explicit grant of authority and certain mandatory elements. Given that I believe that broadband access serves the same essential function as plain old telephone service (POTS) or any other straightforward transmission of information (e.g., snail mail), my inclination is to require a good reason to eliminate basic common carrier regulation rather than shift the burden to those seeking common carrier status for the transmission of information from one point to another. Which is a long-winded way of saying I prefer your Option 2 — Title II regulation with forbearance.

    Title I is useful if what we desire is a complete delegation of authority to the expert agency, guided only by the general intent of Congress. That outcome has advantages and disadvantages depending on how much one trusts such delegations in general and the FCC in particular. I am uncomfortable with having broadband access under Title I rather than Title II both because I think the statutory hair splitting was wrong — what the provider advertises is the service of transporting information back and forth with an expectation that the provider will not interfere in the traffic, fine print be damned — and because Title II contains a much more comprehensive set of responsibilities and limitations on both carriers and regulators. Title II was designed for a world where it is expected that there will be some small number of carriers with market power and that consumers are not in a position to bargain effectively with carriers. Title I has no assumptions other than “FCC, go make sure we have kick ass communications in this country for everyone.”

    At the same time, it is also reasonable to argue that Title II is based on an assumption that networks evolve slowly, and may be ill-suited to the current pace of technological innovation. Even the forbearance proceeding, supporters of Title I will argue, takes too much time and is subject to the evils of regulatory processes.

    A compromise might be a statutory provision similar to that used for cell phones. Section 332 of the Communications Act recognizes that cell phone providers are not generally Title II carriers, but should be treated as such for purposes of Sections 201 and 202 of the Act, and the Commission may apply any other provision of Title II at its discretion. This captures the critical network aspects (interconnection, non-interference with traffic, power to set just and reasonable rates and practices) without the additional regulations arguably designed for a different era.

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