D.C. Circuit Reverses FCC Regulation of Broadband Network Management Practices
On April 6, 2010, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the Federal Communications Commission (FCC) exceeded its authority when it sought to regulate Comcast’s network management practices for its high-speed Internet access service. The court vacated the FCC’s Aug. 1, 2008, ruling that Comcast’s former practice of using various techniques to moderate the amount of bandwidth used by peer-to-peer services such as BitTorrent violated the FCC’s 2005 “Internet Policy Statement.”
The FCC’s 2008 order addressed a Comcast network management technique that had the effect of giving lower priority to some peer-to-peer upload sessions so that the latency-sensitive applications of the vast majority of its Internet customers would remain uninterrupted. The Commission ruled that the practice violated the Commission’s 2005 “network neutrality” policy guidelines and amounted to discriminatory “blocking” and “monitoring” of Internet content, as well as “interference” with consumers’ “right to access” lawful Internet content.
That order was controversial for several reasons, including the FCC’s effective repudiation of its earlier policy and Congress’ explicit declaration of U.S. national policy, to keep the Internet “unfettered by Federal or State regulation.” Most importantly, the FCC found that its jurisdiction to enforce its Internet network management principles could be inferred from other policy statements as authority that was “ancillary” to those policy goals.
For a more detailed analysis of the FCC’s decision, see our Aug. 1, 2008, advisory, “FCC Imposes New Government Constraints on Internet Network Management.”
In vacating the FCC’s order, the court ruled that for the FCC to take regulatory action based on its so-called “ancillary” authority, the agency must identify a specific statutory responsibility that Congress had granted to the agency, and explain how the challenged action supports the agency’s fulfillment of that specific statutory responsibility.
In the order, the FCC had instead justified its action by relying on Congress’ general statements of policy regarding interstate communications in general (Section 1 of the Communications Act) and the Internet (Section 230 of the Act). The court ruled that this was insufficient justification under well-established precedent. The agency also argued to the court that certain statutory provisions did constitute the required specific grant of authority. The court rejected those arguments as either unsupported by the statutory language itself or contradicted by earlier FCC rulings, still in effect, taking a different interpretation of the statute.
While rejecting the FCC’s action in this case, the court found that FCC orders based on ancillary authority must be considered on a case-by-case basis, leaving open the possibility that different FCC regulatory actions regarding the Internet could conceivably be sustained. In addition, the court did not make any broader pronouncements on the prospect, widely discussed in the press, of the FCC re-thinking its now nearly decade-old ruling that high-speed Internet access service is an unregulated “information service.” To the contrary, in explaining why the FCC’s order must be set aside, the court referred to that original ruling as being “still binding” on the Commission and the industry.
Now that the D.C. Circuit has rejected an attempt to assert regulatory jurisdiction over Internet access under Title I, it is possible the FCC will look more closely at reversing its years of treating broadband Internet as an “information service” and consider reclassifying broadband as a “telecommunications service” subject to regulation under Title II of the Communications Act. The debate over reclassifying broadband is already before the FCC in existing proceedings, including a proceeding on so-called network neutrality, as discussed in our Oct. 22, 2009, advisory, "FCC Commences 'Net Neutrality' Rulemaking." The FCC also touched on the potential for reclassifying broadband service in its recent report to Congress on a National Broadband Plan. (Please see our March 16, 2010, comprehensive advisory, "An Analysis of the FCC's National Broadband Plan.")
Consequently, the court’s ruling sets the stage for possible further proceedings at the FCC, court cases, or legislation in Congress. The decision, coupled with the controversy surrounding the FCC’s ongoing network neutrality proceeding, will likely intensify efforts to obtain legislation to address the FCC’s control of the Internet. Indeed—perhaps in anticipation of the court’s ruling and in recognition of the limited factual record before the FCC—there have already been calls for Congress to enact specific legislation regarding regulation of high-speed Internet access.
Davis Wright Tremaine represents providers of broadband services in all matters before the FCC, other state and federal agencies, and in court. Please contact us for any further information.