Unfazed, FCC plods ahead with Broadband Plan, starts a flame war with Verizon

VerizonIn a pair of blog posts since the DC Circuit Court of Appeals' finding Tuesday that the Federal Communications Commission lacked the statutory authority to tell Comcast how to manage traffic on its broadband network, the FCC demonstrated it had officially joined the Internet era by making the dispute into a flame war.

No, the Court did not revoke the FCC's natural authority to regulate the Internet industry, the Commission stated yesterday. However, it may have removed the FCC's epaulets and badge, along with its right to serve as what General Counsel Austin Schlick called "the cop-on-the-beat for 21st Century communications networks."

"Does the FCC still have a mission in the Internet area? Absolutely. The nation's broadband networks represent the indispensable infrastructure for American competitiveness and prospects for future job creation, economic growth, and innovation," Schlick wrote. "The Court did not adopt the view that the Commission lacks authority to protect the openness of the Internet."

Actually, it did. Specifically, the DC Court took the FCC to the proverbial woodshed for presuming that when Congress -- or, more accurately, specific congresspersons -- set policy guidelines rather than made legislation, the Commission could assume those guidelines to be a congressional mandate. The Court cited a 1976 case concerning the National Association of Regulatory Utility Commissioners (NARUC), where the same DC Court overturned the same FCC's authority to regulate how utility companies could make use of the then-nascent digital capabilities of cable TV lines to report, for example, electricity consumption. The FCC could not, the Court found, regulate the use of a medium outside of its mandate for communications. The Court also cited three other significant cases, including some in which it found in the FCC's favor, which are introduced in Betanews' story yesterday.

...Unlike the way it successfully employed policy statements in Southwestern Cable and Midwest Video I, the Commission does not rely on section 230(b) [of the Communications Act of 1934] or section 1 [of the portion of the Act that created the FCC] to argue that its regulation of an activity over which it concededly has no express statutory authority (here Comcast's Internet management practices) is necessary to further its regulation of activities over which it does have express statutory authority (here, for example, Comcast's management of its Title VI cable services). In this respect, this case is just like NARUC II. On the record before us, we see "no relationship whatsoever"...between the Order [regulating Comcast] and services subject to Commission regulation. Perhaps the Commission could use section 230(b) or section 1 to demonstrate such a connection, but that is not how it employs them here.

Instead, the Commission maintains that congressional policy by itself creates "statutorily mandated responsibilities" sufficient to support the exercise of section 4(i) ancillary authority. Not only is this argument flatly inconsistent with [the four key cases establishing ancillary authority, see Betanews' Thursday story], but if accepted it would virtually free the Commission from its congressional tether. As the Court explained in Midwest Video II, "without reference to the provisions of the Act" expressly granting regulatory authority, "the Commission's [ancillary] jurisdiction...would be unbounded."...Indeed, Commission counsel told us at oral argument that just as the Order seeks to make Comcast's Internet service more "rapid" and "efficient"...the Commission could someday subject Comcast's Internet service to pervasive rate regulation to ensure that the company provides the service at "reasonable charges"...Were we to accept that theory of ancillary authority, we see no reason why the Commission would have to stop there, for we can think of few examples of regulations that apply to Title II common carrier services, Title III broadcast services, or Title VI cable services that the Commission, relying on the broad policies articulated in section 230(b) and section 1, would be unable to impose upon Internet service providers. If in Midwest Video I the Commission "strain[ed] the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the Commission and the courts"...and if in NARUC II and Midwest Video II it exceeded those limits, then here it seeks to shatter them entirely.

This is easily the strongest language to date from the DC Court on the limits of the FCC's regulatory powers. Essentially, the Court is saying that the FCC cannot accept Congress' request for it to build a Broadband Plan for the nation (as well as to decide what "broadband" really means anyway) as justification for telling Comcast it can't throttle BitTorrent downloads.

Which is why yesterday afternoon's response from the FCC's Schlick is so astonishing. Blatantly, Schlick's post states that the Court's ruling has only limited effect on the Broadband Plan, which he characterizes as a new kind of mandate. And just who granted the Commission that mandate? Why, Congress, of course, in its request for it to produce the Broadband Plan:

In 2009, Congress directed the agency to develop a plan to ensure that every American has access to broadband. Just three weeks ago, the Commission released its National Broadband Plan. The Plan contains more than 200 recommendations for bringing high-speed service to underserved individuals and communities, and using broadband to promote American competitiveness, education, healthcare, public safety, and civic participation.

The Comcast/BitTorrent opinion has no effect at all on most of the Plan. Many of the recommendations for the FCC itself involve matters over which the Commission has an "express statutory delegation of authority." These include critical projects such as making spectrum available for broadband uses, improving the efficiency of wireless systems, bolstering the use of broadband in schools, improving coordination with Native American governments to promote broadband, collecting better broadband data, unleashing competition and innovation in smart video devices, and developing common standards for public safety networks.

Next: After Comcast, the FCC sets its scopes on Verizon...

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