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A Big (Temporary?) Loss for Net Neutrality

2010 April 7
tags:
by max

Network neutrality proponents are hurting today.  Yesterday the U.S. Court of Appeals for the D.C. Circuit unanimously vacated the FCC’s 2008 order censuring Comcast for blocking certain peer-to-peer traffic.  The decision once again gives ISPs like Comcast the power to withhold bandwidth and thus significantly slow down or even block certain disfavored Internet traffic.

It’s important to emphasize, however, that the court’s decision was not rooted in a lack of support for network neutrality principles.  The question before the court was whether the FCC possessed the legal authority to enforce a principle like network neutrality under its very general ancillary jurisdiction.  Without diving into the complexities of administrative law, federal agencies are created by statute and are thus limited in power depending on the formulation of the particular enabling law.  The FCC is a creature of both the 1934 and 1996 Telecommunications Acts – neither of which gives the FCC the explicit authority to regulate ISPs.  What the FCC was attempting to do with Comcast was use its delegated “ancillary jurisdiction” to regulate Comcast’s network traffic.  But ancillary jurisdiction, almost by definition, has to be ancillary to some express delegation of regulatory authority, which the FCC does not have over ISPs.  This is precisely what the D.C. Circuit said.  It rejected the FCC’s argument that ancillary jurisdiction can be used to further general expressions of policy in the FCC’s enabling statute.  According to the court, ancillary jurisdiction means ancillary to delegations of authority, not expressions of policy.

But this is not necessarily the end of the road.  The Supreme Court might step in and reverse, although I personally don’t see that happening.  Jack Balkin notes that the FCC might change course and assert its express Title II authority over “common carriers” as a jurisdictional grant over ISPs — a route it chose to avoid several years ago in the hopes of lessening the regulatory constraints that come with acting pursuant to express and limited jurisdictional grants (a.k.a. obeying the law).

Unfortunately, the most legally sound option, in my opinion, may actually be the most unlikely to occur.  The most legitimate way for the FCC to assert jurisdiction over ISPs such as Comcast is for Congress to explicitly expand the FCC’s grants of jurisdiction to include ISPs.  Such legislation would require a political will (i.e., 60 votes) negating the influence of special interests in Washington — namely the interests of broadband providers like Comcast.  It just might take a few more years of blocked internet traffic for this type of climate to develop.

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from → Law

  • msapozhn

    I am well aware that the matter of Net Neutrality is near and dear to your heart but honestly, there is and could be no such thing as Net Neutrality. Someone – either private ISPs or a governmental entity – will have control of the switch. And even though my own Internet use was hampered for years by my ISP's policy regarding peer-to-peer communications, I will choose their policies any day over FCC's meddling. The reason is very, very simple. When I don't like what my ISP is doing, I switch to another ISP; when I don't like what FCC is doing, tough luck – and I'll still be paying for it! Even worse, FCC is subordinate to the federal government who show an alarming tendency of skirting the First Amendment way too often for my comfort – Patriot Act or Fairness Doctrine, anyone?

    So the bottomline is, I'm with the Appeals Court on that. Net Neutrality is a great model for an idealized world run by wise, selfless, and unpoliticized leaders. And last time we had those, there was no Internet around.

  • demablogue

    I know my posts on net neutrality might suggest otherwise, but I am
    actually not sure where I stand on the issue in terms of policy. I
    think you raise some very persuasive points cutting against federally
    mandated net neutrality. One thing I am sure about, however, is that I
    would not want net neutrality at the expense of legal legitimacy,
    i.e., the FCC exceeding its congressionally delegated powers to impose
    neutrality principles. In this sense I too side with the Court of
    Appeals. As a policy matter, your approach may lead to bandwidth-
    specialization by ISPs in an effort to seize a peer-to-peer market
    potentially shut out by the Comcasts of the world, which may not be a
    bad result. One problem with this, however, is that such specialized
    ISPs may not want to extend their business to certain, less profitable
    parts of the country. So the choice you speak of may not be available
    to all.

  • msapozhn

    It may be scary to see the FCC to clearly overstep its statutory authority. But it is doubly, nay, hundredfold scarier to have this authority extended on demand by the Congress that routinely wipes its collective behind with the Constitution. That's what governmental institutes do: grow when given half a chance. Heck, look at what the EPA was created as, and what it turned into. Or the IRS.

    Back to the technical side, it is unreasonable to expect specialized ISPs to appear and take the market niche. As you correctly noted, the lobbying power of infrastructure and media giants is so vast that we could reasonably expect such businesses to be promptly legislated and/or regulated out of existence, or to be pushed into a narrow market segment that puts no significant dent to existing monopolies. Didn't you notice that there aren't any small ISPs now, antitrust law be damned?

  • demablogue

    I know my posts on net neutrality might suggest otherwise, but I am

    actually not sure where I stand on the issue in terms of policy. I

    think you raise some very persuasive points cutting against federally

    mandated net neutrality. One thing I am sure about, however, is that I

    would not want net neutrality at the expense of legal legitimacy,

    i.e., the FCC exceeding its congressionally delegated powers to impose

    neutrality principles. In this sense I too side with the Court of

    Appeals. As a policy matter, your approach may lead to bandwidth-

    specialization by ISPs in an effort to seize a peer-to-peer market

    potentially shut out by the Comcasts of the world, which may not be a

    bad result. One problem with this, however, is that such specialized

    ISPs may not want to extend their business to certain, less profitable

    parts of the country. So the choice you speak of may not be available

    to all.

  • msapozhn

    It may be scary to see the FCC to clearly overstep its statutory authority. But it is doubly, nay, hundredfold scarier to have this authority extended on demand by the Congress that routinely wipes its collective behind with the Constitution. That's what governmental institutes do: grow when given half a chance. Heck, look at what the EPA was created as, and what it turned into. Or the IRS.

    Back to the technical side, it is unreasonable to expect specialized ISPs to appear and take the market niche. As you correctly noted, the lobbying power of infrastructure and media giants is so vast that we could reasonably expect such businesses to be promptly legislated and/or regulated out of existence, or to be pushed into a narrow market segment that puts no significant dent to existing monopolies. Didn't you notice that there aren't any small ISPs now, antitrust law be damned?