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The FCC’s Authority to Regulate Net
Neutrality After Comcast v. FCC
Kathleen Ann Ruane
Legislative Attorney
January 28, 2011
Congressional Research Service
7-5700
www.crs.gov
R40234
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008
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The FCC’s Authority to Regulate Net Neutrality After Comcast v. FCC
Summary
In 2007, through various experiments by the media, most notably the Associated Press, it became
clear that Comcast was intermittently blocking the use of an application called BitTorrent™ and,
possibly, other peer-to-peer (P2P) file sharing programs on its network. Comcast eventually
admitted to the practice and agreed to cease blocking the use of the P2P applications on its
network. However, Comcast maintains that its actions were reasonable network management and
not in violation of the Federal Communications Commission’s (“FCC” or “Commission”) policy.
In response to a petition from Free Press for a declaratory ruling that Comcast’s blocking of P2P
applications was not “reasonable network management,” the FCC conducted an investigation into
Comcast’s network management practices. The FCC determined that Comcast had violated the
agency’s Internet Policy Statement when it blocked certain applications on its network and that
the practice at issue in this case was not “reasonable network management.” The FCC declined to
fine Comcast because its Internet Policy Statement had never previously been the basis for
enforcement forfeitures. Comcast appealed this decision to the U.S. Court of Appeals for the DC
Circuit, as did other public interest groups.
The DC Circuit ruled on April 6, 2010, that the FCC could not base ancillary authority to regulate
cable Internet services solely upon broad policy goals contained elsewhere in the
Communications Act. Whatever the merits of other jurisdictional arguments the FCC may
advance, the court found that the FCC did not have jurisdiction to enforce its network
management principles on the basis it had advanced in that case. The court did not address the
other questions posed by the case, including whether the FCC could proceed via adjudication.
The court’s ruling has thrown into doubt the FCC’s authority to regulate Internet network
management. The FCC had announced the possibility of reclassifying the transmission
component of broadband Internet services as a telecommunications service under Title II of the
Communications Act. However, on December 1, 2010, Chairman Genachowski announced that
the agency had abandoned its proposal to reclassify broadband Internet services
On December 21, 2010, the Commission adopted new open Internet rules in its Open Internet
Order. As the chairman previously stated, broadband Internet services were not reclassified as
information services. Instead, the Commission cited Section 706 of the Telecommunications Act
of 1996 as well as authority ancillary to its statutory mandates in Titles II, III, and VI of the
Communications Act of 1934. Two commissioners dissented. Commissioner McDowell published
a lengthy rebuttal to the Commission’s jurisdictional argument in his dissenting statement. This
report will analyze both the Commission’s jurisdictional arguments and Commissioner
McDowell’s counter-arguments. On January 20, 2011, Verizon appealed the Commission’s Open
Internet Order, alleging, among other things, that the FCC has acted outside the bounds of its
statutory authority, the rules are arbitrary and capricious, and that the rules are unconstitutional.
This report will be updated as the new court challenge develops further.
For further information on the policy aspects of this debate, see CRS Report RS22444, Net
Neutrality: Background and Issues, by Angele A. Gilroy.
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Contents
Introduction ................................................................................................................................ 1
FCC’s Network Management Principles ...................................................................................... 2
The Ruling Against Comcast ....................................................................................................... 3
Court Opinion in Comcast v. FCC ............................................................................................... 5
Commission’s Proposals to Assert Regulatory Authority Over Broadband Internet
Services Following Comcast v. FCC......................................................................................... 7
Background .......................................................................................................................... 8
Three Possible Paths to Authority Under Current Law........................................................... 9
Chairman Genachowski’s December 1, 2010, Statement...................................................... 12
The Open Internet Rules ........................................................................................................... 12
The Open Internet Rules ..................................................................................................... 12
Application ................................................................................................................... 13
Wireline Rules .............................................................................................................. 14
Wireless / Mobile Broadband ........................................................................................ 16
The FCC’s Authority to Issue the Rules ............................................................................... 17
Section 706 ................................................................................................................... 18
Other Sources of Authority............................................................................................ 23
Constitutional Issues ..................................................................................................... 27
Contacts
Author Contact Information ...................................................................................................... 29
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The FCC’s Authority to Regulate Net Neutrality After Comcast v. FCC
Introduction
Some degree of Internet traffic management is necessary for networks to function effectively. For
example, in order for voice conversations to occur over the Internet, the data packets encoding the
communications must arrive in rapid sequence. Long delays between the arrival of voice data
packets would make voice conversations over the Internet impossible to conduct. Prioritization of
voice data packets over other packets traveling simultaneously over the same network ensures
clear voice transmissions, while minimally delaying other network traffic. Logically, if network
managers have the power to prioritize data packets, they also have the power to subordinate them.
This means network managers have the power to render the applications that depend on packet-
prioritization (like voice or video applications) useless. Accordingly, there must be a line between
network management that is necessary for the Internet to provide quality service to users, and
network management that is anti-competitive or otherwise harmful to the free exchange of
information. Questions have arisen regarding where that line is and who has the ability to draw it.
For more information see CRS Report RS22444, Net Neutrality: Background and Issues, by
Angele A. Gilroy.
In an attempt to separate the unnecessary network management practices from the necessary, the
Federal Communications Commission (FCC) issued an Internet Policy Statement in 2005. The
Internet Policy Statement endeavored to ensure that broadband consumers would have access to
all lawful content on the Internet and that all lawful applications could be used on networks.
These rights may be limited by the needs of broadband providers to reasonably manage their
networks. The Policy Statement was not a regulation carrying the force of law; therefore,
violation of the Policy Statement presumably would not result in liability.
In 2007, through various experiments by the media, most notably the Associated Press, it became
clear that Comcast Corporation (Comcast) was intermittently interfering actively with the use of
an application called BitTorrent™ and, possibly, other peer-to-peer (P2P) file sharing programs
on its network, as a method of traffic management. While initially denying the accusations,
Comcast eventually admitted to the practice and agreed to cease blocking the use of the P2P
applications on its network. However, Comcast maintains that its actions in relation to P2P
programs were reasonable network management and not in violation of the FCC’s policy.
In response to a petition from Free Press for a declaratory ruling that Comcast’s blocking of P2P
applications was not “reasonable network management,” the FCC conducted an investigation into
Comcast’s network management practices. The FCC determined that Comcast had violated the
agency’s Internet Policy Statement when it blocked certain applications on its network and that
the practice at issue in this case was not “reasonable network management.” Comcast disputes the
FCC’s authority to issue such a ruling and appealed the decision to the U.S. Court of Appeals for
the DC Circuit. The court held that the FCC did not make a proper argument for asserting
ancillary jurisdiction over network management practices.
The court’s ruling has thrown into doubt the FCC’s authority to regulate Internet network
management. The FCC had announced the possibility of reclassifying the transmission
component of broadband Internet services as a telecommunications service under Title II of the
Communications Act. However, in a recent statement regarding the status of the rulemaking,
Chairman Genachowski announced that the agency had abandoned its proposal to reclassify
broadband Internet services.
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On December 21, 2010, the Commission adopted new open Internet rules in its Open Internet
Order. As the chairman previously stated, broadband Internet services were not reclassified as
information services. Instead, the Commission cited Section 706 of the Telecommunications Act
of 1996 as well as authority ancillary to its statutory mandates in Titles II, III, and VI of the
Communications Act of 1934. Two commissioners dissented. Commissioner McDowell published
a lengthy rebuttal to the Commission’s jurisdictional argument in his dissenting statement. This
report will analyze both the Commission’s jurisdictional arguments and Commissioner
McDowell’s counter-arguments. On January 20, 2011, Verizon appealed the Commission’s Open
Internet Order, alleging, among other things, that the FCC has acted outside the bounds of its
statutory authority, the rules are arbitrary and capricious, and that the rules are unconstitutional.
This report will be updated as the new court challenge develops further.
FCC’s Network Management Principles
Federal policy towards the Internet, as embodied in Section 230(b) of the Communications Act of
1934, as amended by the Telecommunications Act of 1996, is “to preserve the vibrant and
competitive free market that presently exists for the Internet” and “to promote the continued
development of the Internet.”1 In Section 706 of the Communications Act, Congress instructs the
FCC to encourage “the deployment on a reasonable and timely basis of advanced
telecommunications capability to all Americans.”2
Basing its authority on these two provisions, in 2005, the FCC issued a policy statement intended
to offer guidance to network owners regarding the rights of consumers accessing the Internet
through their networks.3 The FCC acknowledged that information service providers (those who
provide access to the Internet) are not governed by stringent Title II common carrier regulations,
but asserted that it had jurisdiction to issue the Policy Statement pursuant to its Title I ancillary
jurisdiction.4 Title I ancillary jurisdiction permits the Commission to issue additional regulatory
obligations in order to regulate interstate and foreign communications in furtherance of the
Communications Act. In the FCC’s assessment, Title I ancillary jurisdiction granted the FCC
ample authority to take steps to ensure that broadband networks are widely deployed, open,
affordable and accessible to all and to ensure that Internet services are operated in a neutral
manner. Accordingly, the FCC adopted the following principles to encourage broadband
deployment and to preserve and promote the open and interconnected nature of the public
Internet:
• consumers are entitled to access the lawful Internet content of their choice;
1 47 U.S.C. § 230(b)(2).
2 47 U.S.C. § 157 (incorporating section 706 of the Telecommunications Act of 1996, P.L. 104-104, 110 Stat. 56
(1996)).
3 In the Matters of the Appropriate Framework for Broadband Access to the Internet over Wireline Facilities; Review
of Regulatory Requirements for Incumbent LEC Broadband Telecommunications Services; Computer III Further
Remand Proceedings: Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review –
Review of Computer III and ONA Safeguards and Requirements; Inquiry Concerning High-Speed Access to the
Internet Over Cable and Other Facilities; Internet Over Cable Declaratory Ruling; Appropriate Regulatory Treatment
for Broadband Access to the Internet Over Cable Facilities, 20 FCC Rcd 14986 (2005) [hereinafter FCC’s Network
Management Principles].
4 Id. at 14988.
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• consumers are entitled to run applications and use services of their choice,
subject to the needs of law enforcement;
• consumers are entitled to connect their choice of legal devices that do not harm
the network; and
• consumers are entitled to competition among network providers, application and
service providers, and content providers.5
It is also important to note that upon adopting these precepts the FCC expressly stated that it was
“not adopting rules in this policy statement” and that the principles adopted were “subject to
reasonable network management.”6 The Commission termed the Policy Statement to be guidance
and insight into its approach to the Internet that was intended to be consistent with Congressional
directives. The Commission did not put the network management principles out for public
comment, nor did it publish the principles in the Code of Federal Regulations.
The Ruling Against Comcast
In 2007, the Associated Press reported the results of various tests it had conducted to investigate
whether Comcast was blocking P2P applications on its network.7 The AP concluded that Comcast
“actively interfere[d] with attempts by some of its high-speed Internet subscribers to share files
online.”8 The AP alleged that Comcast was specifically targeting P2P applications, such as
Gnutella and BitTorrent™, preventing anyone who wished to use these applications from being
able to do so in an effective way. The Electronic Frontier Foundation conducted similar tests with
similar results. Comcast admitted to interfering with P2P applications on occasions of high
volume traffic, but maintained that its interferences were a reasonable network management
practice.9
As a result, Free Press, a non-profit organization that advocates for media reform, filed a
complaint against Comcast with the FCC. The complaint asked the FCC to declare “that an
Internet service provider violates the [Commission’s] Internet Policy Statement when it
intentionally degrades a targeted Internet application.”10 Free Press also filed a petition with the
Commission requesting that the agency issue a declaratory ruling that would clarify that any
Internet service provider that intentionally degrades or blocks particular applications would be in
violation of the FCC’s Internet Policy Statement. The Commission put the petition out for public
comment.11
5 Id.
6 Id. at n. 15.
7 Peter Svensson, Comcast Blocks Some Internet Traffic, AP Testing Shows, Associated Press, Oct. 19, 2007.
8 Id.
9 Letter from Mary McManus, Senior Director of FCC and Regulatory Policy, Comcast Corporation to Kris A.
Monteith, Chief, Enforcement Bureaus, File No. EB-08-OJ-1518, at 5 (Jan. 25, 2008) (Comcast Response Letter).
10 Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-
to-Peer Applications, File No. EB-08-IH-1518 (Nov. 1, 2007).
11 Broadband Industry Practices Petition of Free Press et al. for Declaratory Ruling that Degrading an Internet
Application Violates the FCC’s Internet Policy Statement and Does Not Meet an Exception for “Reasonable Network
Management, WC Docket No. 07-52, Public Notice, 23 FCC Rcd 343 (WCB 2008).
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After hearing comments from the public and from industry participants, the Commission
determined that Comcast had violated its Internet Policy Statement, because its practice of
degrading usage of P2P applications prevents consumers from using the lawful application of
their choice and does not fall under the exception for reasonable network management.12 The
Commission was particularly troubled by what it determined to be Comcast’s lack of
transparency regarding the company’s network management practices.13 The Commission found
that Comcast was less than forthcoming about its network management practices and that only
after independent evidence emerged that Comcast was not being truthful did the corporation
admit to its true methods of traffic management related to P2P programs.14 The Commission
noted that “[a] hallmark of whether something is reasonable is whether a provider is willing to
disclose to its customers what it is doing.”15 Since Comcast, evidently, was not disclosing its
practices, the Commission viewed its actions as suspect. Furthermore, the Commission found
there were other effective methods for managing the heavy traffic generated by P2P programs that
fell short of interfering with the applications’ ability to function.16
Despite determining in its adjudication that Comcast had violated its Internet Policy Statement,
the Commission did not issue a forfeiture order against the company.17 The Commission also
declined to issue an injunction or a cease-and-desist order against the company. The company had
already agreed to cease its objectionable practices and the Commission determined that a
reasonable transition period was necessary.18 To monitor Comcast’s compliance, the Commission
required Comcast submit to the Commission, within 30 days of the order: (1) the precise contours
of its previous network management practices; (2) a compliance plan “with interim benchmarks
that describe[d] how it intend[ed] to transition from discriminatory to nondiscriminatory network
management practices [by the end of 2008]; and (3) publicly disclose its newly implemented and
protocol-agnostic network management practices.19
Comcast filed the requested documents with the FCC on September 19, 2008.20 Comcast also
filed a certification with the FCC on January 5, 2009, affirming that the company had fulfilled its
12 In the Matters of Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly
Degrading Peer-to-Peer Applications and Broadband Industry Practices Petition of Free Press et al. for Declaratory
Ruling that Degrading an Internet Application Violates the FCC’s Internet Policy Statement and Does Not Meet an
Exception for “Reasonable Network Management,” 23 FCC Rcd 13028 (2008) [hereinafter Comcast Decision].
13 Id. at para. 52.
14 Id. at para. 53.
15 Id.
16 Id. at para. 49.
17 Id. at para. 54. Because the Commission was enforcing a policy statement that had never previously been enforced,
the agency did not issue a forfeiture order in this particular case. The Commission reserved the right to proceed by
adjudication in the future, and believed it could issue forfeiture orders for future violations of the network management
principles.
18 Id.
19 Id. Failure to submit the required documents and / or failure to complete its transition to protocol-agnostic network
management would have resulted in further enforcement action by the Commission. Id. at para. 55.
20 Letter from Kathryn A. Zachem, Vice President, Regulatory and State Legislative Affairs, Comcast to Marlene H.
Dortch, Secretary, FCC, Re: In the Matters of Formal Complaint of Free Press and Public Knowledge Against Comcast
Corporation for Secretly Degrading Peer-to-Peer Applications; Broadband Industry Practices: Petition of Free Press et
al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC’s Internet Policy Statement and
Does Not Meet an Exception for “Reasonable Network Management,” File No. EB-08-IH-1518, WC Docket No. 07-52
(September 19, 2008).
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promise to move to protocol-agnostic network management practices.21 The Commission sent a
letter to Comcast on January 18, 2009 asking the company to clarify its treatment of VoIP
services.22 The Commission expressed concern that Comcast made no distinction between VoIP
services in its filing, but, apparently, treats its own VoIP service offering differently than it treats
other VoIP services. Furthermore, the Commission noted that if Comcast’s VoIP service is a
separate offering of a telephone service (distinct from the broadband offering), then it is possible
that it should be classified as a “telecommunications service.” Telecommunications services are
subject to more stringent regulations under Title II of the Communications. The Commission,
therefore, asked Comcast to explain why it omitted the effects its new network management
practices would have on Comcast’s VoIP service from its required filings and why Comcast’s
VoIP service should not be treated as a telecommunications service under Title II.
Comcast filed its answer with the Commission on January 30, 2009.23 The company argued that
Comcast’s voice service is a separate service from its broadband offering. In the company’s
opinion, it, therefore, was not part of the ongoing discussions about Comcast’s broadband
network management practices and is not affected by the newly implemented management
regime. Comcast also argued that the question of whether Comcast’s voice service should be
treated as a telecommunications service is irrelevant to the current proceedings, but, nonetheless,
asserted that Comcast’s voice offering is not a telecommunications service. The Commission has
yet to take any action in response to Comcast’s letter.
Though Comcast voluntarily ceased the network management practices that the Commission
found objectionable, Comcast appealed the decision of the Commission to the DC Circuit.24
Court Opinion in Comcast v. FCC
On April 6, 2010, the DC Circuit vacated the FCC’s order against Comcast because the FCC had
failed to tie its assertion of ancillary authority to any “statutorily mandated responsibility.”25 After
21 Letter from Kathryn A. Zachem, Vice President, Regulatory and State Legislative Affairs, Comcast to Marelene
Dortch, Secretary, FCC, Re: In the Matters of Formal Complaint of Free Press and Public Knowledge Against Comcast
Corporation for Secretly Degrading Peer-to-Peer Applications; Broadband Industry Practices: Petition of Free Press et
al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC’s Internet Policy Statement and
Does Not Meet an Exception for “Reasonable Network Management,” File No. EB-08-IH-1518, WC Docket No. 07-52
(January 5, 2009).
22 Letter from Dana R. Shaffer, Chief, Wireline Competition Bureau, and Matthew Berry, General Counsel, FCC, to
Katherine A. Zachem, Vice President, Regulatory Affairs, Comcast Corporation, Re: In the Matters of Formal
Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer
Applications; Broadband Industry Practices: Petition of Free Press et al. for Declaratory Ruling that Degrading an
Internet Application Violates the FCC’s Internet Policy Statement and Does Not Meet an Exception for “Reasonable
Network Management,” File No. EB-08-IH-1518, WC Docket No. 07-52 (January 19, 2009).
23 Letter from Kathryn A. Zachem, Vice President, Regulatory and State Legislative Affairs, Comcast to Dana R.
Shaffer, Chief, Wireline Competition Bureau, and Matthew Berry, General Counsel, FCC Re: In the Matters of Formal
Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer
Applications; Broadband Industry Practices: Petition of Free Press et al. for Declaratory Ruling that Degrading an
Internet Application Violates the FCC’s Internet Policy Statement and Does Not Meet an Exception for “Reasonable
Network Management,” File No. EB-08-IH-1518, WC Docket No. 07-52 (January 30, 2009).
24 Petition for Review and, in the Alternative, Notice of Appeal, Comcast Corporation v. Federal Communications
Commission, (No. 08-____) (D.C. Cir. 2008).
25 Comcast v. Federal Communications Commission, No. 08-1291, 2010 U.S. App. LEXIS 7039 (D.C. Cir. April 6,
2010). The court did not address the question of whether the FCC acted appropriately in attempting to enforce the
(continued...)
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dispensing with the FCC’s preliminary arguments against the court’s jurisdiction, the panel
applied the test for ancillary jurisdiction it had announced in American Library Assn. v. FCC,26
and found the FCC’s argument insufficient to satisfy the standards.
The Supreme Court recognizes that the FCC has so-called “ancillary authority” to regulate
services that it has not been granted express authority to regulate.27 The FCC did not claim that it
had express authority to regulate cable Internet service. Rather, the agency argued that regulation
of Internet services was “reasonably ancillary to the . . . effective performance of its statutorily
mandated responsibilities.”28 The FCC relied primarily upon Section 230(b) of the
Communications Act, which states that “it is the policy of the United States ... to promote the
continued development of the Internet and other interactive computer services [and] to encourage
the development of technologies which maximize user control over what information is received
by individuals families and schools who use the Internet.”29 The FCC argued that this statement
of policy, along with the general rulemaking authority in Title I, was sufficient to assert ancillary
jurisdiction over cable Internet network management.
In American Library Assn. v. FCC, the DC Circuit recently held that the FCC may assert its
ancillary authority when two conditions are met: (1) the Commission’s general jurisdiction grant
under Title I covers the regulated subject and (2) the regulations are reasonably ancillary to the
Commission’s effective performance of its statutorily mandated responsibilities.30 The court
agreed that condition one had been met. Cable Internet services falls within the general
jurisdiction granted to the Commission under Title I. The court held, however, that the FCC had
failed to satisfy the second condition because statements of policy could not be considered to be
statutorily mandated responsibilities under the Communications Act.31
The court detailed each case heard by the Supreme Court and by the DC Circuit where ancillary
jurisdiction was the basis for the FCC’s authority to act in the case. In each case, the court found
that where the FCC had ancillary authority to exercise jurisdiction, the FCC’s argument for
jurisdiction related to a specific grant of authority to regulate in a related area and did not rely
solely on a policy statement, as the Commission had done here. The court expressed concern that
if it had adopted the FCC’s argument and allowed ancillary authority to rest on statements of
policy in the Communications Act, the FCC’s authority to regulate would have been nearly
boundless and the agency could find reason to regulate in many new areas where Congress had
not granted specific authority to do so.
The court also addressed the other statutory provisions upon which the FCC claimed to rely for
jurisdiction.32 Some of these statutory provisions, such as Section 706 of the Communications
(...continued)
policy statement through an adjudication because the FCC did not clear its jurisdictional hurdle.
26 403 F. 3d 689, 691-92 (D.C. Cir. 2005).
27 See United States v. Southwestern Cable Co., 392 U.S. 157 (1968), United States v. Midwest Video Corp., 406 U.S.
649 (1972), FCC v. Midwest Video Corp., 440 U.S. 589 (1979).
28 Comcast v. Federal Communications Commission, 600 F. 3d 642 (D.C. Cir. 2010).
29 Id. at 649.
30 Id. at 45.
31 Id. at 653.
32 Id. at 654 - 656.
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Act,33 arguably might grant the FCC specific authority to regulate in an area reasonably related to
the regulation of cable Internet services. In each case, however, the court found the FCC had
failed in some way to properly advance the argument for jurisdiction on the basis of these other
statutory provisions. Therefore, the court found that it could not hold that the FCC had ancillary
authority to regulate cable Internet services based upon any of these specific grants of regulatory
authority.
Commission’s Proposals to Assert Regulatory
Authority Over Broadband Internet Services
Following Comcast v. FCC
The decision of the DC Circuit in Comcast v. FCC34 has thrown the agency’s current authority to
regulate broadband Internet network managment into doubt. Broadband Internet services are
currently classified as information services, to which Title I of the Communications Act applies.35
The FCC does not possess direct authority to regulate services classified under Title I,36 and was
unsuccessful in its initial attempt to assert ancillary authority over broadband Internet network
management in the Comcast case. As a result, the agency announced the possibility of
reclassifying the transmission component of broadband Internet services as a telecommunications
service under Title II of the Communications Act.37 The FCC hoped this potential reclassification
would ground the FCC’s authority to regulate broadband Internet services more firmly in the
governing law. After receiving feedback on the reclassification proposal, Chairman Genachowski
stated that the FCC had abandoned its plan to reclassify broadband Internet services, and, in its
most recent order adopting open Internet rules, would make alternative arguments for asserting
jurisdiction.38 Nonetheless, the Commission’s plan for reclassification may continue to be
relevant in the jurisdictional debate going forward, in the event that the Open Internet Order,
33 Section 706 of the Communications Act states that “the Commission ... shall encourage the deployment on a
reasonable and timely basis of advanced telecommunications capability to all Americans.” The court agreed that this
could be a direct mandate to regulate. The Commission, however, is legally bound by its previous interpretation of
Section 706. The Commission had previously found that Section 706 did not constitute an independent grant of
authority. In the court’s opinion, the Commission could not rely on Section 706 as an independent grant of statutory
authority in this case, because it had previously held that Section 706 was not an independent grant of authority and it is
bound by its own interpretation of the section. Id. at *30 – 31. The Commission does have the option of conducting a
rulemaking to reinterpret Section 706 as an independent grant of regulatory authority. The Commission would have to
complete that rulemaking before asserting Section 706 as a source of ancillary authority. See FCC v. Fox Television
Stations, Inc., 129 S.Ct. 1800, 1811 (2009).
34 Comcast v. Federal Communications Commission, 600 F.3d 642 (D.C. Cir. 2010). (Comcast) CRS Report R40234,
The FCC’s Authority to Regulate Net Neutrality After Comcast v. FCC , by Kathleen Ann Ruane.
35 See, Inquiry Concerning High-Speed Access to the Internet Over Cable & Other Facilities; Internet Over Cable
Declaratory Ruling; Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable Facilities, 17
FCC Rcd 4798 (2002) (Cable Modem Declaratory Ruling).
36 Id.
37 Press Release, Chairman Julius Genachowski, FCC, The Third Way: A Narrowly Tailored Broadband Framework
(May 6, 2010). [“Genachowski Statement”]. Press Release, Austin Schlick, FCC, A Third-Way Legal Framework for
Addressing the Comcast Dilemma (May 6, 2010). [“Schlick Statement”].
38 Federal Communications Commission, Chairman Julius Genachowski, Remarks on Preserving internet Freedom and
Openness (Dec. 1, 2010). Available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-303136A1.pdf.
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The FCC’s Authority to Regulate Net Neutrality After Comcast v. FCC
discussed in the following section, fails to survive judicial review, and Congress does not act to
clarify the FCC’s authority.
Background
In order to understand the uncertainty surrounding the FCC’s authority over broadband Internet
services, some background is needed. After the passage of the Telecommunications Act of 1996,
the FCC found it necessary to determine what kind of service broadband Internet service was.39
The agency’s choices were to classify broadband Internet access as an information service,40 over
which it would have no direct authority to regulate under Title I, or as a telecommunications
service,41 over which it would have extensive authority to regulate under Title II. There was also
an intermediate option. The FCC contemplated classifying the transmission component of a
broadband Internet service as a telecommunications service, while classifying the processing
component as an information service.42 The FCC ultimately chose to classify broadband Internet
services as information services only.43
At the time, in 2002, the provision of broadband Internet services arguably was still a nascent
industry, and the FCC expressed a desire to avoid introducing into the developing market what it
thought could be too many regulations.44 However, this was a contentious question. The Supreme
Court, in NCTA v. Brand X, made the final decision.45 The question before the court was whether
the FCC could define cable-modem services (i.e., cable broadband services) as information
services. Opponents of that classification argued that the FCC did not have discretion to define
cable modem services as an information service. The court, however, sided with the FCC. What is
important for the purposes of this discussion is that the court did not say that cable modem
services are clearly and unambiguously information services. Instead, the court said that the
definitions of telecommunications services and of information services were ambiguous as they
related to cable modem services, and that the FCC, as the agency with jurisdiction under the
Communications Act, had the authority to interpret those definitions.46 The court gave deference
39 It is worth noting that the Ninth Circuit Court of Appeals had issued a ruling declaring that cable modem Internet
service was a telecommunications service, prior to the FCC’s decision to implement a rulemaking on this issue. AT&T
Corp. v. City of Portland, 216 F.3d 871, 877-79 (9th Cir. 2002). However, as discussed infra, despite the FCC reaching
the opposite conclusion, the Supreme Court upheld the FCC’s interpretation of the Communications Act.
40 Information services are defined as:
the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving,
utilizing, or making available information via telecommunications, and includes electronic
publishing, but does not include any use of any such capability for the management, control or
operation of a telecommunications system or the management of a telecommunications service.
47 U.S.C. § 153(20).
41 Telecommunications services are defined as:
the offering of telecommunications for a fee directly to the public, or to such classes of users as to
be effectively available directly to the public, regardless of the facilities used.
47 U.S.C. § 153(46).
42 The agency identified a portion of cable modem Internet services as “Internet connectivity,” which is the portion the
agency would seek to redefine as a telecommunications service today. See Cable Modem Declaratory Ruling, 17 FCC
Rcd at 4809-11.
43 Cable Modem Declaratory Ruling, 17 FCC Rcd at 4819.
44 Id. at 14856.
45 Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) (Brand X).
46 Id. at 987.
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to the FCC’s determination that cable modem services should be defined as information services
and determined that the FCC’s classification of cable modem services in this way was
reasonable.47
However, three Justices dissented. Justice Scalia authored the dissent, concluding that cable
modem services were actually two separate services: the computing service which was an
information service, and the transmission service, which was a telecommunications service.48 The
classification that these Justices believed the Communications Act clearly mandated was the
classification that the FCC recently proposed to apply to broadband Internet services.49
Three Possible Paths to Authority Under Current Law
In advancing the idea of reclassification of broadband services, prior to the adoption of the Open
Internet Order discussed below, Chairman Genachowski announced his intention to pursue what
he termed “light touch” Title II regulation of broadband services in May of 2010.50 As explained
in the statement of the FCC’s General Counsel, it was the intention of the FCC to commence a
rulemaking to reclassify only the transmission component of broadband access services (“Internet
connectivity”) as a telecommunications service, while the data processing portion of the service
would remain an information service.51 The Chairman argued that, in choosing only to reclassify
the transmission component of broadband access services, the reach of the FCC’s jurisdiction
would have been sufficiently narrowed so as to avoid giving the agency the authority to regulate
Internet content. This plan, according to the Chairman at the time, also would have avoided the
imposition of regulation so pervasive as to become burdensome.52
In keeping with this announcement, on June 17, 2010, the FCC released a notice of inquiry (NOI)
into the framework of broadband Internet services.53 In the NOI, the agency asked for comment
on a number of questions. The FCC made clear that its ultimate goal in issuing the NOI was to
determine the best avenue for restoring the agency’s previous understanding of its authority to
regulate broadband Internet services.54 In other words, the FCC was seeking firmer ground for its
authority to continue rulemakings along the lines of the broadband network management
rulemakings55 and the order it issued in 2007 finding Comcast to be in violation of the FCC’s
network management policies.56 In doing so, the FCC recognized that the DC Circuit’s decision
47 Id. at 991, 1002-03.
48 Id. at 1005 (Scalia, J., dissenting).
49 See Genachowski Statement, supra note 4; Schlick Statement, supra note 4.
50 Genachowski Statement, supra note 4.
51 Schlick Statement, supra note 4.
52 Genachowski Statement, supra note 4.
53 In the Matter of Framework for Broadband Internet Service, Notice of Inquiry, GN Docket No. 10-127 (2010)
available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-114A1.pdf. [“NOI”]
54Id. at ¶¶ 1-2.
55 See Preserving the Open Internet: Broadband Industry Practices, GN Docket no. 09-191, WC Docket No. 07-52,
Notice of Proposed Rulemaking, 24 FCC Rcd 13064 (2009).
56 See Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading
Peer-to-Peer Applications; Broadband Industry Practices et al., WC Docket No. 07-52, Memorandum Opinion and
Order, 23 FCC Rcd 13028 (2008).
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in Comcast v. FCC had thrown the agency’s assertions of ancillary authority over broadband
network management into considerable doubt.57
The NOI listed three main potential paths forward and sought comment on the feasibility of each.
The first question the NOI asked was whether the FCC could find a better way to assert ancillary
authority over broadband Internet services.58 The DC Circuit did not foreclose on the possibility
of the FCC asserting ancillary authority in other ways. It merely rejected the FCC’s argument in
that particular case.59 Therefore, the FCC asked whether broadband Internet services may
continue to be classified as information services while the agency asserts a different (or multiple
different) statutory basis for exercising ancillary jurisdiction. There are a number of potential
theories for ancillary jurisdiction for which the FCC sought comment.60 It appears that ultimately,
one of these options, or a combination thereof, will be the path the FCC will choose. Allowing
broadband Internet services to remain information services will mean that the FCC may proceed
straight to a network neutrality rulemaking without having to first engage in a reclassification
rulemaking.
The other two potential paths towards firmer authority to regulate would have involved direct
regulation under Title II of the Communications Act. Therefore, it would have been necessary to
reclassify at least the Internet connectivity portion of broadband Internet services as a
telecommunications service, because only telecommunications services are governed by Title II.
The FCC asked for comment on how to define Internet connectivity for reclassification.61
Assuming the FCC chose one of these two paths, this reclassification would likely have been
reviewed by the courts, in light of the fact that the Supreme Court upheld the agency’s previous
classification of broadband Internet services as a unified information service. However, as
discussed earlier, Brand X gave deference to the FCC’s interpretation of the Communications Act
in this area.62 Furthermore, in the recent case FCC v. Fox Television, the Supreme Court held that
when an agency issues a new (and different from its previous) interpretation of a statute it has the
authority to implement, the agency “need not demonstrate to a court’s satisfaction that the reasons
for the new policy are better than the reasons for the old one.”63 The agency must show only that
its current interpretation is reasonable, though in some circumstances a more detailed justification
for the change must be made than would otherwise be necessary if the agency was rulemaking on
a blank slate.64
Assuming that such a reclassification would have been upheld by the courts, the second potential
path forward would have been to apply the full force of Title II regulation to broadband Internet
connectivity (as the FCC would define it). The FCC sought comment on the potential effects of
such a decision.65 The third option was to apply limited Title II regulation to broadband access
and to forbear from applying the portions of Title II to broadband access services that the FCC
deemed contrary to the public interest. Section 401 of the Telecommunications Act of 1996
57 NOI, at ¶ 1.
58 Id. at ¶ 30.
59 Comcast, 600 F. 3d at 661.
60 NOI, at ¶¶ 32-51.
61 Id. at ¶¶ 52-66.
62 Brand X, 545 U.S. at 991.
63 FCC v. Fox Television Stations, Inc. 129 S. Ct. 1800, 1811 (2009).
64 Id.
65 NOI, at ¶ 52.
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requires the FCC to forbear from applying any regulation or provision under Title II to a provider
of telecommunications services if the Commission determines that
(1) enforcement of such regulation or provision is not necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection with that
telecommunications carrier or telecommunications service are just and reasonable and are
not unjustly or unreasonably discriminatory; (2) enforcement of such regulation or provision
is not necessary for the protection of consumers; and (3) forbearance from applying such
provision or regulation is consistent with the public interest.66
In their May 2010 statements, the Chairman and General Counsel argued that this provision
would require forbearance from many of Title II’s more onerous provisions, such as the rate
regulation and tariff provisions, because applying those provisions would not be consistent with
the public interest.67
The NOI asked for comment on this potential action.68 It further asked for comment on the
provisions on Title II from which the agency should not forbear. In particular, the NOI asked for
comment on applying the provisions of Title II that the FCC had identified as likely to be needed
to have adequate enforcement authority in its earlier press releases on this issue.69 These
provisions are Sections 201 (requiring service upon request and reasonable rates),70 202
(prohibiting unreasonable discrimination),71 208 (granting the FCC authority to act upon
complaints),72 222 (protecting privacy),73 254 (universal service),74 and 25575 (access for disabled
persons).76 In the FCC’s announcements, the General Counsel identified these provisions as
potentially sufficient to “do the job” of providing enough authority to accomplish the FCC’s
goals.77 However, the NOI asked for comment on other provisions that may have been necessary
to assert jurisdiction as well.78
66 Codified at 47 U.S.C. § 160.
67 See Genachowski Statement, supra note 4; Schlick Statement, supra note 4.
68 NOI, at ¶ 74. The Chairman and General Counsel analogized this approach to its regulation of wireless voice
communications. In 1993, Congress specified that Title II applies to wireless communications, such as cellular phone
service. 47 U.S.C. § 332(c). Section 332(c) gave the FCC the discretion to determine which regulations under Title II
should be inapplicable to wireless voice services; however, the FCC could not forbear from applying Sections 201, 202,
or 208 to wireless voice services. Id. Similarly, the statement of the Chairman has pledged to apply Sections 201, 202,
and 208 to broadband access services
69 NOI, at ¶¶ 74-85.
70 47 U.S.C. § 201.
71 47 U.S.C. § 202.
72 47 U.S.C. § 208.
73 47 U.S.C. § 222.
74 47 U.S.C. § 254.
75 47 U.S.C. § 255.
76 Genachowski Statement, supra note 4.
77 Schlick Statement, supra note 4.
78 NOI, at ¶¶ 86-7.
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Chairman Genachowski’s December 1, 2010, Statement
In a statement made on December 1, 2010, Chairman Genachowski announced that the FCC had
abandoned its proposal, described above, to reclassify broadband Internet services as
telecommunications services and that they would remain classified wholly as information
services.79 In his statement, the Chairman indicated that the FCC would anchor its authority to
implement the new regulations in various sections of the Communications Act. The Commission
did attempt to anchor its regulations as the chairman described, and its jurisdictional argument is
described in further detail below.
The Open Internet Rules
On December 21, 2010, the FCC, in a 3-2 vote along party lines, adopted new net neutrality
regulations.80 The rules will not take effect until 60 days after the notice of their adoption has
been posted in the Federal Register. The rules are high-level and general in nature because the
FCC plans to enforce the rules through adjudication, on a case-by-case basis. As a result major
questions remain regarding the scope and application of the rules, despite the fact that they have
been adopted. For example, assuming the FCC has the authority to issue and enforce the rules, it
is unclear, because the rules are vague, exactly which actions by broadband service providers the
FCC will deem in violation of the rules. However, it likely can be presumed that a scenario such
as the one presented by the Comcast decision, described above, would violate the rules. Another
major question is whether the FCC has the authority to issue the rules at all. The FCC did not
choose to reclassify broadband Internet access under Title II and, therefore, cannot rely on its
clear Title II authority to regulate. Nonetheless, the FCC appears to claim, at least in part, that it
possesses direct authority to issue these rules, as well as ancillary authority to issue the rules.
Because there is already an unfavorable court decision related to the FCC’s ancillary authority in
this area, it is unclear whether the agency’s new argument to assert such authority will survive a
court challenge. On January 20, 2011, Verizon appealed the Open Internet Order, alleging, among
other things, that the FCC has acted outside the bounds of its statutory authority, the rules are
arbitrary and capricious, and that the rules are unconstitutional.81 The legal issues presented by
the Open Internet Order may be resolved in this case.
The Open Internet Rules
The FCC has adopted what it has termed basic rules of the road for broadband Internet access
services and traffic management.82 The Commission contends that the rules are necessary to keep
the Internet open to all and to spur investment in new technologies and broadband infrastructure
deployment. While the Commission acknowledges that there is only “one Internet,” it also
concedes that there may be differences in network structure and capabilities. Particularly, the
Commission recognizes the difference between the technological capabilities of wireline or fixed
79 Federal Communications Commission, Chairman Julius Genachowski, Remarks on Preserving internet Freedom and
Openness (Dec. 1, 2010). Available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-303136A1.pdf.
80 In the Matter of Preserving the Open Internet, Broadband Industry Practices, FCC 10-201, GN Docket No. 09-191,
WC Docket No. 07-52 (2010). (hereinafter “Open Internet Order”).
81 Verizon v. FCC, D.C. Cir. 11-1014 (D.C. Cir. 2011).
82 Id. at ¶ 1.
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broadband access providers and wireless broadband access providers.83 Wireless, in the
Commission’s view, is still in the development stages and does not have the large capacities that
wireline providers have. For that reason, more content management may be necessary on the part
of wireless providers. As a result, the rules the Commission will apply to wireline and wireless
are slightly different.
Application
The term “broadband Internet access service” is defined as,
A mass market retail service by wire or radio that provides the capability to transmit data to
and receive data from all or substantially all Internet endpoints, including any capabilities
that are incidental to and enable the operation of the communications service, but excluding
dial-up Internet access service. This term also encompasses any service that the Commission
finds to be providing a functional equivalent of the service described in the previous
sentence, or that is used to evade the protections set forth in this Part.84
This definition applies to all broadband Internet access providers, be they cable, fiber, wireless, or
some other access method, that offer their services to retail customers. In other words, they offer
their services to residential customers, small businesses, and other end users. The term does not
include access services offered to large-scale enterprise customers. Furthermore, the rules apply
to all Internet traffic, not just to voice and video services.85
It is important to note that the rules apply only to Internet access services. They do not apply to
so-called “edge service” providers, which are application and Internet content providers.86 Edge
services could encompass anything from blogs, to Google, to so-called app stores. The
Commission refrained from regulating edge services. The Commission noted that the
Communications Act grants the FCC jurisdiction over “the utilization of networks and spectrum
to provide communication by wire or radio.”87 It appears the Commission may not believe this
grant of jurisdiction encompasses the content of the communications travelling over those
networks and spectrum. However, the Commission has asserted jurisdiction over the contents of
communication in the past. For example, the fairness doctrine governed the contents of some
broadcast communications.88 The FCC’s indecency regulations also restrict some broadcast
content.89 The Commission does not explicitly state in its order that it does not have jurisdiction
83 Id. at ¶ 49.
84 Id. at ¶ 44.
85 Id. at ¶ 45.
86 Id. at ¶ 46.
87 Id. at ¶ 50.
88 In the Matter of Editorializing by Broadcast Licensees, 13 FCC Rept. 1246 (1949).
89 See CRS Report RL32222, Regulation of Broadcast Indecency: Background and Legal Analysis, by Kathleen Ann
Ruane. Despite the fact that the Commission has successfully regulated broadcast content in the past, that does not
necessarily mean that the Commission will have the authority to regulate Internet content in the future. Aside from the
question of whether the content of communications over the Internet is within the FCC’s jurisdiction, the Supreme
Court has held on a number of occasions that speech over the broadcast airwaves is entitled to a lower standard of
scrutiny than speech over most other forms of media including cable and the Internet. See Reno v. ACLU, 521 U.S. 844
(1997)(applying strict scrutiny to regulation of indecent speech over the Internet); Turner Broadcasting v. FCC, 512
622 (1994) (finding regulations of speech over cable in general to be subject to strict scrutiny); FCC v. Pacifica
Foundation, 438 U.S. 726 (1978)(upholding regulation of indecent speech over broadcast by applying a form of
intermediate scrutiny); Red Lion Broadcasting v. FCC, 395 U.S. 367 (1969)(upholding the constitutionality of the
(continued...)
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to place any regulations on edge services. Given the agency’s history of successfully regulating
some communication content, the Commission may believe that it does have jurisdiction over
edge services and may merely be refraining from exercising its jurisdiction at this time.
Wireline Rules
The Commission has imposed three basic rules on wireline (fixed) broadband service providers: a
transparency rule, a rule against blocking, and a rule against unreasonable discrimination. The
Commission worded the rules as general principles, but gave guidance to industry regarding what
might be considered in compliance and in violation of the rules.
Transparency
The Commission adopted a transparency rule requiring fixed broadband service providers to
supply to customers, both on their websites and at the time of sale, disclosure regarding the
network management practices the provider employs.90 This rule is geared toward providing the
Commission and the public with a barometer by which to gauge network management. The goal
appears to be to empower the public and consumer advocacy groups to hold broadband
companies accountable to their own descriptions of their network management practices. The
final rule reads,
A person engaged in the provision of broadband Internet access service shall publicly
disclose accurate information regarding the network management practices, performance,
and commercial terms of its broadband Internet access services sufficient for consumers to
make informed choices regarding use of such services and for content, application, service,
and device providers to develop, market and maintain Internet offerings.91
The rule is intended to allow discretion to broadband providers in determining exactly what
information the providers will disclose. However, the Commission did provide suggestions for
the type of information it would expect to see in these disclosures. Specifically the Commission
identified three main topics the disclosures likely should cover: network practices, performance
characteristics, and commercial terms.92 Within the network management disclosures the
Commission suggested that companies provide information regarding their congestion
management practices, their application-specific management practices, and their device
attachment rules. Within the performance characteristics section, the Commission suggested
including a service description, including the expected performance level of the service, and the
impact of specialized services that may be offered. Within the commercial terms section, the
Commission has suggested inclusion of information such as pricing; privacy policies, including
information regarding how the data collected by the provider is utilized; and redress options for
resolving disputes.
(...continued)
fairness doctrine by applying a form of intermediate scrutiny). Therefore, even if the content of these communications
does fall under the FCC’s jurisdiction, the constitutional scrutiny the FCC might face should it attempt to burden that
speech may prove prohibitive to regulation.
90 Open Internet Order, supra note 83, at ¶ 53.
91 Id. at ¶ 54.
92 Id at ¶ 56.
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The Commission stressed that these suggestions were neither necessary nor all-inclusive of what
a broadband service provider should include in its disclosure. Rather, each broadband provider
should consider its own network and services and tailor information to fit its particular service.
Furthermore, the Commission stressed that this rule does not require broadband providers to
disclose proprietary information.
No Blocking Rule
The no blocking rule is intended to ensure that end users can access any lawful content or
application they wish over the Internet.93 The Commission contends that the rule is necessary to
ensure openness and competition in the provision of broadband Internet access services.
Moreover, most, if not all, major broadband providers currently claim that they do not block any
lawful content over their networks. The rule reads,
A person engaged in the provision of fixed broadband Internet access service, insofar as such
person is so engaged, shall not block lawful content, applications, services, or nonharmful
devices, subject to reasonable network management.94
The rule covers all lawful communication over the Internet, including those communications that
may not fit cleanly into the definition of application, services, or any other listed item.
Furthermore, “no blocking” also means “no impairing or degrading” lawful content so as to
render the content unusable, subject to reasonable network management.95 As an example,
applications that deliver video streaming over the Internet require a great deal of Internet
capacity. Slowing down the speed at which the video is delivered to the end user may make the
video unwatchable or otherwise disrupt the experience. Broadband service providers have the
capability to intentionally slow down these delivery speeds. The Commission makes clear that
such intentional slowing is a violation of the open Internet rules. However, the rule is subject to
reasonable network management. As an example, at times of high volume of Internet traffic, in
order to allow all of their customers to have Internet access in a given area, the broadband
provider may find it necessary to slow the delivery of online products such as streaming video.
Such slowing, when necessary as a management tool, likely would not be considered to be a
violation of the no blocking rule, according to the Commission.
No Unreasonable Discrimination Rule
The rule against unreasonable discrimination is distinct from, yet closely related to, the rule
against blocking. The unreasonable discrimination rule recognizes that many fixed broadband
access providers are also Internet content providers; furthermore, they may have affiliations with
some Internet content providers, but not all. As a result, fixed broadband Internet providers have
both the capability and the incentive to favor the delivery of their own and their affiliates’ Internet
content over that of non-affiliated content to their subscribers. The rule, therefore, states,
A person engaged in the provision of fixed broadband internet access service, insofar as such
person is so engaged, shall not unreasonably discriminate in transmitting lawful network
93 Id. at ¶ 62.
94 Id. at ¶ 63.
95 Open Internet Order, supra note 83, at ¶ 66.
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traffic over a consumer’s broadband Internet access service. Reasonable network
management shall not constitute unreasonable discrimination.96
The more transparent an access provider is about traffic management, the more likely it will be
considered to be reasonable.97 Furthermore, the more control granted to the end user to manage
the content he or she wishes to receive, the more likely the management will be considered to be
reasonable. Also, the rule does not preclude fixed broadband Internet providers from developing
tiered levels of service, where heavy Internet users could pay more for faster speeds, and lighter
users might pay less.98 Nonetheless, the Commission expressed concern for “pay for priority”
agreements wherein a broadband provider and a third party agree to favor some traffic over other
traffic.99 The Commission indicated that pay for priority agreements might violate the
unreasonable discrimination prohibition. It is unclear what the difference between tiered services
and pay for priority services might be. Presumably, the Commission will flesh out this distinction
and many others as cases begin to come before the Commission.
Reasonable Network Management
To provide greater guidance as to what is permissible, the Commission also developed a
definition for what activities will be considered to be reasonable network management. The
definition reads,
A network management practice is reasonable if it is appropriate and tailored to achieving a
legitimate network management purpose, taking into account the particular network
architecture and technology of the broadband Internet access service.100
Legitimate purposes include, but are not limited to, ensuring network security and integrity,
addressing traffic that is unwanted by end users, and reducing or mitigating the effects of
congestion on the network. The scope of what constitutes reasonable network management as it is
applied to differing network architectures (cable, fiber, wireless, etc.) will be more specifically
defined by the Commission on a case-by-case basis as investigations of rule violations begin.
Wireless / Mobile Broadband
The rules the Commission established for mobile broadband are somewhat different than those
for fixed broadband services. In the Commission’s view, mobile broadband is at an earlier stage
of development than fixed broadband, and is evolving rapidly.101 Not only is it at an earlier
development stage, but it also currently has less overall capacity for delivery of advanced Internet
services, like streaming video, than fixed broadband services. As a result, the Commission has
applied only the transparency and no blocking rules, subject to reasonable network management,
to mobile broadband.102 The Commission has promised to continue monitoring the development
96 Id. at ¶ 68.
97 Id. at ¶ 70.
98 Id. at ¶ 72.
99 Id. at ¶ 76.
100 Open Internet Order, supra note 83, at ¶ 82.
101 Id. at ¶ 94.
102 Id. at ¶ 96.
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of mobile broadband and to revisit the potential to apply an unreasonable discrimination rule in
the future.103
Transparency
The transparency rule applies to mobile broadband in much the same way that the rule applies to
fixed broadband services.104 Mobile broadband providers are not required to allow all third-party
devices and applications to attach to their network, but mobile broadband providers must disclose
their certification procedures for such devices and applications.
No Blocking Rule
The rule against blocking is slightly different for mobile broadband providers than it is for fixed
broadband providers. The no blocking rule for mobile broadband reads,
A person engaged in mobile broadband Internet access service, insofar as such person is so
engaged, shall not block consumers from accessing lawful websites, subject to reasonable
network management; nor shall such person block applications that compete with the
provider’s voice or video telephony services, subject to reasonable network management.105
This rule is more narrow than the no blocking rule that has been applied to fixed services in that it
only prevents blocking of lawful websites, rather than preventing the blocking of all lawful
Internet content. Importantly, it also prevents blocking of Internet services that might compete
with a wireless provider’s voice and video telephony services.106 This likely means that wireless
broadband providers cannot block programs like Skype from operating over their wireless
networks.
Furthermore, the rule is subject to reasonable network management. Reasonable network
management has the same meaning as the definition above. The Commission stated that the
definition is broad enough to encompass different network architectures, and did not believe it
necessary to develop a different definition for mobile and fixed network management.107
The FCC’s Authority to Issue the Rules
As discussed in detail above, the Commission previously attempted to assert authority to regulate
broadband Internet network management by arguing that such regulations were reasonably
ancillary to the Commission’s implementation of Section 230(b) of the Communications Act. The
DC Circuit Court of Appeals rejected that assertion. Section 230(b) is a statement of policy,
which does not give the Commission the statutory responsibility to act in any way.108 In order to
have ancillary authority, according to the appeals court, the Commission must ground its
jurisdiction in a “statutorily mandated responsibility,” and a statement of policy is insufficient to
103 Id. at ¶¶ 105 - 106.
104 Id. at ¶ 97.
105 Id. at ¶99.
106 Open Internet Order, supra note 83, at ¶¶ 101 - 102.
107 Id. at ¶ 103.
108 Comcast v. Federal Communications Commission, 600 F. 3d 642, 658-659 (D.C. Cir. 2010).
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meet that standard.109 As a result, the court invalidated the FCC’s judgment against Comcast in
that case. However, the court left open the possibility that the FCC might find authority to
implement network management rules elsewhere in the Communications Act. In its analysis, the
court specifically mentioned Section 706 of the Telecommunications Act of 1996 as a possible
source for the requisite authority, but the court also found that the Commission was bound by its
own interpretation of Section 706. The court found that the Commission had interpreted 706 as a
direction to use its existing statutory authority to encourage broadband infrastructure deployment
and competition, rather than as an independent grant of new rulemaking authority.110
Following the court’s decision, the FCC explored a number of jurisdictional arguments. Among
them were different arguments for asserting ancillary authority, as well as a suggestion to
reclassify and regulate at least some aspect of broadband Internet services under Title II of the
Communications Act with a promise to forbear from applying the most stringent aspects of Title
II to these services. In the end, the Commission has chosen not to reclassify broadband Internet
services as telecommunications services. They will remain information services, regulated
primarily under Title I of the act.
Section 706
The FCC centers its jurisdictional argument around Section 706 of the Telecommunications Act
of 1996.111 Because the FCC chose not to reclassify broadband Internet access services as
telecommunications services, it was believed that the Commission would again attempt to argue
that it has ancillary authority to oppose the open Internet rules. That, however, does not appear to
be the case in relation to its jurisdictional argument under Section 706. It appears that the FCC is
claiming that Section 706 grants the FCC the direct authority to impose the open Internet rules.112
If the Commission has had direct authority to implement these rules all along, it may seem
strange that the Commission initially attempted to assert its ancillary (indirect) authority. The
FCC explains this apparent discrepancy in this way: “Indeed our authority under Section 706(a) is
generally consistent with—albeit narrower than—the understanding of ancillary jurisdiction
under which the Commission operated” prior to the Comcast decision.113 As a result, the
Commission, in its view, had never had occasion to read Section 706 as a specific grant of
rulemaking authority because it had previously believed itself to possess more expansive
authority to regulate under its indirect ancillary jurisdiction.114
Section 706(a), the Commission’s main source of authority under the section, reads,
In general, the Commission and each State commission with regulatory jurisdiction over
telecommunications services shall encourage the deployment on a reasonable and timely
109 Id. at 658-659.
110 Id. at 658.
111 Codified at 47 U.S.C § 1302.
112 See Open Internet Order, ¶ 117.
113 Id. at ¶ 122.
114 Commissioner McDowell, in his dissenting statement, describes it this way. “In other words, apparently, the
agency’s confused understanding of the limits of its ancillary authority meant that the Commission then did not have to
rest on Section 706(a) in order to overreach by ‘pursu[ing] a stand-alone policy objective’ not moored to a ‘specifically
delegated power.” Dissenting Statement of Commissioner Robert M. McDowell, Open Internet Order, FCC 10-201, at
135 – 172, available at http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db1223/FCC-10-201A1.pdf.
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basis of advanced telecommunications capability to all Americans (including, in particular,
elementary and secondary schools and classrooms) by utilizing, in a manner consistent with
the public interest, convenience, and necessity, price cap regulation, regulatory forbearance,
measures that promote competition in the local telecommunications market, or other
regulating methods that remove barriers to infrastructure investment.115
Advanced telecommunications capability is defined as follows:
without regard to any transmission media or technology, as high-speed, switched, broadband
telecommunications capability that enables users to originate and receive high-quality voice,
data, graphics, and video telecommunications using any technology.116
The Commission argues that this provision “provides the Commission with the specific
delegation of legislative authority to promote the deployment of advanced services, including by
means of the open Internet rules.”117
In the Comcast decision, because the statutory language says “shall encourage,” the DC Circuit
acknowledged that Section 706 contains what could arguably be a “direct mandate.”118 It is
unclear whether the court was referring to a direct mandate arguably sufficient as a jurisdictional
hook upon which the Commission might hang its ancillary authority argument, or a mandate to
directly impose the open Internet rules, as the Commission attempts to do in this order.
Nonetheless, the DC Circuit believed that the Commission had already foreclosed on this
possibility by finding that Section 706 granted the Commission no new regulatory authority.
Despite the court’s analysis, the Commission argues that Section 706 grants direct authority to
issues these rules. First, the Commission argues that the DC Circuit was mistaken in its
characterization of the FCC’s interpretation of Section 706.119 The DC Circuit read the FCC’s
prior interpretation of 706 to mean that the FCC believed that Section 706 granted the agency no
new regulatory authority.120 Indeed, the agency seemed to say precisely that when it found that
Section 706(a) gave the Commission an affirmative obligation to encourage the deployment of
advanced telecommunications services (which includes broadband services) using its existing
regulatory, forbearance, and adjudicatory powers.121 The Commission disagrees with the court
and clarifies that its previous interpretation of Section 706(a) dealt only with its forbearance
authority.122 The Commission argues that it found that Section 706(a) did not grant the FCC the
power to forbear from regulation above and beyond the authority already granted to the
Commission under Section 10 of the act. In other words, Section 706(a) directed the Commission
to use its existing forbearance authority and forbearance process to encourage the deployment of
advanced services. However, the language of the statute directs the Commission also to use “price
115 47 U.S.C. § 1302(a).
116 47 U.S.C. § 1302(d).
117 Open Internet Order, supra note 83, at ¶ 122.
118 Comcast v. Federal Communications Commission, 600 F. 3d at 658.
119 Open Internet Order, supra note 83, at ¶ 118.
120 Comcast v. Federal Communications Commission, 600 F. 3d at 658 – 659.
121 Deployment of Wireline Serv. Offering Advanced Telecomms. Capability et al., 13 FCC Rcd 24012, 24046 (1998).
122 Open Internet Order, supra note 83, at ¶ 119.
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cap regulation . . . and other regulating methods that remove barriers to infrastructure
investment.”123 It is this language that the FCC contends grants new regulatory authority.
The Commission argues that Congress “necessarily invested the Commission with the statutory
authority to carry out” price cap regulation, regulatory forbearance, and other measures that
promote competition in the telecommunications market, as well as other regulatory methods that
would promote infrastructure investment when it enacted 706.124 The Commission, therefore
reads Section 706(a) as an authorization “to address practices, such as blocking VoIP
communications, degrading or raising the cost of online video, or denying end users material
information about their broadband service, that have the potential to stifle overall investment.”125
The Commission seems to be saying that the open Internet rules, which govern the management
of these networks after they have been deployed, are necessary to encourage the deployment of
broadband networks.
It appears, however, that the FCC made precisely this argument to the DC Circuit in the Comcast
case, and the court rejected the argument. The Court quoted the FCC’s order first interpreting
Section 706: “[S]ection 706(a) does not constitute an independent grant of forbearance authority
or of authority to employ other regulating methods.”126 In the court’s opinion, that language
directly contradicted the FCC’s assertion that the interpretation applied only to the FCC’s
forbearance authority, and refused to accept the FCC’s argument. In future litigation, the FCC
may argue that the Open Internet Order is the first occasion on which the agency has interpreted
the entirety of Section 706, despite the DC Circuit’s analysis to the contrary. The agency may
argue that its interpretation of Section 706, as well as its interpretation of its own order
interpreting Section 706, is entitled to judicial deference.127 The degree of deference accorded,
whether deference is warranted at all, may depend on the circumstances and the posture of the
case. It is, therefore, unclear to what extent the DC Circuit’s previous rejection of the FCC’s
argument for jurisdiction under Section 706 will affect the FCC’s argument going forward.
The Commission further relies on a different case from the DC Circuit Court of Appeals to
support its interpretation of Section 706. Indeed, the court in Ad Hoc Telecom v. FCC found that
Section 706 speaks in very broad terms and instructs the FCC to facilitate broadband deployment.
The court went on to say that “the general and generous phrasing of Section 706 means that the
FCC possesses significant, albeit not unfettered, authority and discretion to settle on the best
regulatory or deregulatory approach to broadband—a statutory reality that assumes great
importance when parties implore courts to overrule FCC decisions on this topic.”128 However,
that case occurred in a deregulatory context. The case involved a challenge to an FCC order to
forbear from regulation, rather than impose new regulations. Furthermore, the FCC had complied
with the requirements of Section 10 forbearance proceedings, using its existing forbearance
123 47 U.S.C. § 1302(a).
124 Open Internet Order, supra note 83, at ¶ 120.
125 Id.
126 Comcast v. Federal Communications Commission, 600 F. 3d at 659 (quoting Deployment of Wireline Serv.
Offering Advanced Telecomms. Capability et al., 13 FCC Rcd at 24044) (emphasis in original).
127 “Judicial deference is the degree to which a court will uphold and respect the validity of an agency’s interpretation
of a statutory provision during judicial review of the agency’s decisions. The amount of deference that an agency
interpretation of its own statute will receive from a reviewing court ‘has been understood to vary with the
circumstances.’” CRS Report R41546, A Brief Overview of Rulemaking and Judicial Review, by Vanessa K. Burrows
and Todd Garvey, (citing United States v. Mead Corp., 533 U.S. 218, 228, 236-37 (2001).
128 572 F. 3d 903, 906-907 (D.C. Cir. 2009).
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authority to encourage broadband deployment, as it previously had interpreted Section 706 to
direct. This case, therefore, is arguably consistent with the Comcast court’s interpretation of
Section 706. The Comcast court argued as much in responding to the FCC’s citation of Ad Hoc
Telecom. The Comcast court opined,
... we cited section 706 merely to support the Commission’s choice between regulatory
approaches clearly within its statutory authority under other sections of the Act, and upheld
the Commission’s refusal to forbear from certain regulation of business broadband lines as
neither arbitrary nor capricious. Nowhere did we question the Commission’s determination
that section 706 does not delegate any regulatory authority.129
The Ad Hoc Telcomm case did not determine whether the FCC had authority to issue regulations
beyond authority it already possessed prior to the enactment of Section 706 because the question
was not at issue. That question remains open and may be at the heart of any challenge to the
FCC’s open Internet rules.130
Commissioner McDowell, who voted against the rules, takes issue with the Commission’s
interpretation of Section 706.131 McDowell notes that the 1996 act and Section 706, specifically,
were intended to be deregulatory in nature. Indeed, the very case the Commission cites as
supporting its interpretation of Section 706 involved the FCC’s choice to ease the regulatory
burdens on special access providers.132 In Commissioner McDowell’s analysis, the imposition of
the open Internet rules not only has no basis in the statute, but also would have the opposite effect
that the Commission claims.133 McDowell believes that rules governing network management
would stifle investment and would not serve the goals of Section 706 even if 706 did grant the
FCC the authority to regulate broadband network management. Commissioner McDowell,
however, does not believe that 706 grants such authority, because broadband Internet services are
information services, and nothing in Section 706 grants the FCC the authority to regulate
information services.134 The FCC has also admitted on previous occasions that it does not have
direct authority to regulate information services.135
Commissioner McDowell’s criticism appears to be unaddressed by the Commission in its order.
This may be because the Commission determined that the statutory delegation to advance
deployment of “advanced telecommunications services” covers broadband Internet services.136 If
129 Comcast v. Federal Communications Commission, 600 F. 3d at 659.
130 Argument has yet to begin in the challenge filed by Verizon, Inc. to the Open Internet Order. Once briefing has
begun the primary arguments at issue may come into sharper relief. Verizon v. FCC, D.C. Cir. 11-1014 (D.C. Cir.
2011).
131 Dissenting Statement of Commissioner Robert M. McDowell, Open Internet Order, FCC 10-201, at 135 – 172,
available at http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db1223/FCC-10-201A1.pdf (hereinafter
McDowell Statement).
132 See Ad Hoc Telecomm, 527 F. 3d at 904.
133 McDowell Statement, supra note 129, at 155.
134 Id. at 155-157.
135 See, Comcast Decision, 23 FCC Rcd 13028 (2008), FCC’s Network Management Principles, 20 FCC Rcd 14986
(2005).
136 As noted above, advanced telecommunications capabilities are defined in Section 706 “without regard to any
transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables
users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.”
47 U.S.C. § 1302. This may be broad enough to encompass broadband Internet services, though that does not
necessarily mean that it grants the Commission the direct authority to impose the open Internet rules.
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these rules encourage the deployment of advanced telecommunications services, broadband
Internet services are advanced telecommunications services, and the Commission has been
granted statutory authority to regulate the deployment of advanced telecommunications services
by Section 706, as the Commission argues is the case, then perhaps further parsing of information
services versus telecommunications services was viewed to be unnecessary. However, there may
be an important distinction between the authority to encourage the deployment of advanced
telecommunications services and the authority to regulate the services themselves. The
Commission appears to believe that the regulation of the services themselves encourages their
deployment by promoting competition in the market for the provision of the services. It will
likely require the determination of a reviewing court to clarify whether the Commission’s
interpretation is correct, or at least reasonable in the light of judicial deference accorded to agency
interpretations of the statutes the agency has been charged with implementing.
Commissioner McDowell further notes that if Section 706 is broad enough to grant the FCC the
authority to issue the open Internet rules, then it is difficult to see where that authority to regulate
the Internet ends.137 The FCC answers this charge by arguing that its authority in this area is
limited in three ways.138 First, the Commission argues that its jurisdiction must be read in
conjunction with Sections 201 and 202 of the Communications Act, which limit the
Commission’s subject matter jurisdiction to “interstate and foreign commerce in wire and radio.”
While, this appears to be a broad grant of jurisdiction, nonetheless, the Commission reads it to be
a limiting principle. Second, the FCC’s authority under Section 706 is limited only to actions that
would encourage the deployment of advanced telecommunications systems to all Americans.
However, this is precisely what Commissioner McDowell and other critics of the order claim the
open Internet rules do not encourage.139 Lastly, the manner in which the Commission takes action
under Section 706 must comport with the public interest, convenience, and necessity. As a result,
the Commission argues that its Section 706 authority is “not unfettered.” However,
determinations of what is in the public interest are largely left to the discretion of the agency
implementing the rules.140 It is unclear what, if any, restraint or limitation the requirement of
acting in the public interest might place on the FCC in this context.
The Commission further cites Section 706(b) as a source of authority for issuing the open Internet
rules. Section 706(b) reads,
The Commission shall, within 30 months after the date of enactment of this Act [enacted
Oct. 10, 2008], and annually thereafter, initiate a notice of inquiry concerning the availability
of advanced telecommunications capability to all Americans (including, in particular,
elementary and secondary schools and classrooms) and shall complete the inquiry within 180
days after its initiation. In the inquiry, the Commission shall determine whether advanced
telecommunications capability is being deployed to all Americans in a reasonable and timely
fashion. If the Commission’s determination is negative, it shall take immediate action to
accelerate deployment of such capability by removing barriers to infrastructure investment
and by promoting competition in the telecommunications market.141
137 McDowell Statement, supra note 129, at 159.
138 Open Internet Order, supra note 83, at ¶ 121.
139 McDowell Statement, supra note 129, at 153 - 159.
140 The FCC’s ability to determine what would be in the public interest is broad, but presumably not unlimited.
However, it is not clear whether, or in what manner, such determinations would be considered by a hypothetical
reviewing court. See, e.g., 5 U.S.C. § 706.
141 47 U.S.C. § 1302(b).
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Recently, the Commission found that broadband services are not being deployed to all Americans
in a reasonable and timely fashion.142 Commissioner McDowell notes that the Commission made
this determination in spite of the fact that 95% of all Americans have access to broadband
services.143 In light of its determination that broadband deployment has been unsatisfactory, the
Commission cites its mandate to “take immediate action to accelerate deployment of such
capability by removing barriers to infrastructure investment and by promoting competition in the
telecommunications market” as another source of authority for issuing the rules.144 The
Commission argues that the rules will promote competition in the market by preventing
anticompetitive activity such as blocking of unaffiliated applications or discrimination against
unaffiliated content providers. It is possible that the Commission conflates competition for the
provision of advanced telecommunications services (meaning among Internet service providers)
with competition among Internet content providers. It is unclear whether regulating the
management of broadband networks to prevent unfair treatment of different content providers
will promote competition for the provision of broadband Internet access services. The
Commission does not explain the nexus between the two in its order. However, if there is a court
challenge to the order, perhaps further explanation will be forthcoming at that time. It is also
possible that a nexus between the two is not required. It may be that the language of Section
706(b) is broad enough to encompass the management of content over broadband lines within the
scope of the provision of broadband/advanced telecommunications services.
Other Sources of Authority
The Commission does not base its jurisdictional argument solely on Section 706. The
Commission also argues that it has a number of jurisdictional hooks in Titles II, III, and VI to
assert ancillary authority to regulate broadband network management.145 In order to assert
ancillary jurisdiction the Commission must show that the attempted action is within its
jurisdiction and the action is “reasonably ancillary to the effective performance of a statutorily
mandated responsibility.”146 According to the DC Circuit, that means an exercise of ancillary
authority will only be valid if the action is in support of the Commission’s performance of one of
its mandated duties.147 The Commission in this order argues that its ancillary authority generally
stems from its specific authorities to promote competition and investment in voice, video, and
audio services.148 The Commission does not limit its open Internet rules to the provision of voice,
video, and audio services because “it would not be sound policy to attempt to implement rules
concerning only voice, video, or audio transmissions over the Internet.”149 However, the
Commission gives no explanation for why such policy would be unsound.
142 Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable
and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996, 25 FCC Rcd 9556, 9558 (2010).
143 McDowell Statement, supra note 129, at 158.
144 Open Internet Order, supra note 83, at ¶ 123.
145 Id. at ¶ 125.
146 Comcast v. Federal Communications Commission, 600 F. 3d at 658.
147 Id.
148 Open Internet Order, supra note 83, at ¶ 124.
149 Id.
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Commissioner McDowell, in his rebuttal, does not believe these jurisdictional assertions are
sufficient.150 McDowell argues that “for the ancillary authority arguments to prevail here, the
Order must identify specific subsections within Title II, II or VI that provide the ancillary hook,
and then show how the Commission’s assertion of power will advance the regulated services
directly subject to those particular provisions. Existing court precedent shows that sweeping
generalizations are not sufficient.”151
Nonetheless, the Commission does cite specific sections of Titles II, III, and VI, which grant the
Commission rulemaking authority. The questions for a reviewing court may be (1) whether the
Commission has adequately argued that some regulation of Internet traffic is necessary for the
Commission to achieve its enumerated responsibilities; and (2) if the Commission does have
ancillary authority to enact rules governing network management to preserve competition in the
discrete industries over which it does have direct responsibility, whether that justifies the
regulation of all broadband Internet network management.152
Title II
The Commission cites Title II as its authority to regulate voice services.153 The primary
jurisdictional argument here would appear to be that regulation of broadband Internet
management is reasonably ancillary to the Commission’s regulation of voice services, because
VoIP voice services are currently being used as interchangeable services with traditional
telephone services and the use of VoIP is heavily affecting the market for traditional telephone
services. Section 201 of the Communications Act grants the Commission the broad authority to
ensure that charges and practices related to the provision of telecommunications services be just
and reasonable.154 This provision, historically and in its most basic interpretation, applied to
common carriers providing traditional telephone services. The FCC, in its order, argues that
interconnected VoIP services are increasingly being substituted for traditional telephone
services.155 Furthermore, there are companies that provide both traditional voice services and
broadband Internet services. These companies have the “incentive and ability to block, degrade,
or otherwise disadvantage the service of their online voice competitors.”156 Because of these
market realities, the Commission argues that Section 201 grants the Commission the authority to
prevent anticompetitive practices through the open Internet rules.
Commissioner McDowell argues that the assertion of ancillary authority under Section 201 to
prevent discrimination is inapt.157 Section 201 does not reference discrimination; it references just
and reasonable rates. If any part of Title II would support an anti-discrimination rule, it would be
150 McDowell Statement, supra note 129, 159 – 160.
151 Id. at 160.
152 The Comcast court required that each assertion of ancillary jurisdiction be “independently justified.” 600 F. 3d at
651. It is unclear exactly how that requirement will apply to this order. Perhaps the FCC intends to assert a different
jurisdictional argument for each adjudication it undertakes in order to independently justify each action. On the other
hand, it is possible that the FCC may argue that, taken together, its ancillary jurisdiction arguments in this order are
sufficient to satisfy the requirement of “independent justification.”
153 Open Internet Order, supra note 83, at ¶ 125.
154 47 U.S.C. § 201.
155 Open Internet Order, supra note 83, at ¶ 125.
156 Id.
157 McDowell Statement, supra note 129, at 163.
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Section 202, which specifically prevents unreasonable discrimination, according to McDowell.
However, the Commission does not mention Section 202 as a source of authority. In response to
McDowell’s criticism, the Commission may argue that the anticompetitive practices it seeks to
prevent may result in unjust and unreasonable rates, which Section 201 grants the Commission
the authority to prevent. This argument may develop further should the Commission’s authority
be challenged in court.
The Commission further cites Section 251(a), which requires telecommunications carriers to
interconnect with one another as a source of ancillary authority.158 The Commission noted that
VoIP services typically allow their subscribers to call customers of traditional phone networks. If
VoIP services could be blocked or degraded, then the traditional phone customers would also
suffer. To the extent, therefore, that VoIP services are information services, the Commission
argues that it has ancillary authority to issue the open Internet rules, and to the extent VoIP
services are telecommunications services, interference by the broadband provider with the
communication would likely be a direct violation of Section 251(a). The Commission declined to
determine whether VoIP service providers are telecommunications carriers.159
Title III
The Commission cites Title III as its authority to regulate some video and audio services,
particularly broadcast radio and television.160 The Commission argues that the open Internet rules
are necessary for the Commission to perform its Title III “responsibilities to ensure the orderly
development … of local television broadcasting’ and the ‘more effective use of radio.’”161 The
Commission notes that many broadcasters, both radio and television, are now providing their
content over the Internet in one form or another as well. Many MVPDs are broadband Internet
service providers as well, and, as a result, may have the incentive to block or degrade content
offered by broadcasters over their Internet connections, or the broadband provider might choose
to charge unreasonable fees for delivery of that content over the Internet. Without the open
Internet rules, the Commission argues impairment of delivery of content over the Internet might
also impair broadcasters’ ability to provide high quality broadcast content.
McDowell finds this argument to be tenuous.162 He argues that the Commission does not cite any
specific grant of statutory authority to support its ancillary jurisdiction, as McDowell would argue
the Comcast case required.163 Instead the Commission cites its Title III responsibilities in general
and notes that broadcast licensees are now also supplying content online. In McDowell’s reading,
158 Open Internet Order, supra note 83, at ¶ 126.
159 Commissioner McDowell criticized this jurisdictional assertion as well. He noted that Section 251 places a duty on
telecommunications carriers to interconnect, but the Commission refused to determine whether VoIP providers were, in
fact, telecommunications carriers. If they are not telecommunications carriers, then the “effect of the order is to do
indirectly what the Commission is reluctant to do explicitly.” McDowell Statement, supra note 129, at 164.
160 Open Internet Order, supra note 83, at ¶ 127.
161 Id. at ¶ 128.
162 McDowell Statement, supra note 129, at 164.
163 For its part, in the order, the Commission cited 47 U.S.C. §§ 303 and 307 as its sources of statutory authority.
Section 303 grants the Commission the authority to allocate broadcasting zones and directs the Commission to
“generally encourage the larger and more effective use of radio in the public interest.” Section 307 grants the
Commission the authority to issue spectrum licenses. See Open Internet Order, supra note 83, fn. 402-403. McDowell
may find these provisions too general, or policy oriented to qualify as anchors for ancillary jurisdiction in this instance.
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this is not a sufficient basis for the assertion of ancillary authority. Again, however, the arguments
both for and against this jurisdictional assertion may be more fully informed by a court decision.
Title VI
The Commission also argues that under Title VI it has the authority to protect competition in the
multichannel video programming distribution market (MVPD market). “A cable or telephone
company’s interference with the online transmission of programming by DBS operators or stand-
alone online content aggregators that may function as competitive alternatives to traditional
MVPDs would frustrate Congress’s stated goals” including “promoting ‘competition and
diversity in the [MVPD] market”; “increasing the availability of satellite cable programming and
satellite broadcast programming to persons in rural and other areas not currently able to receive
[it]”; and “spurring the development of communications technologies.”164 For this proposition,
the Commission cites specifically Section 628 which prohibits cable companies from engaging in
unfair or deceptive acts or practices the purpose of which is to impede MVPDs from delivering
satellite cable or satellite broadcast programming.165 It further directed the FCC to issue rules
proscribing such practices and specified that telephone companies offering video programming
were subject to the same rules as cable operators.
As it had noted previously, the Commission reiterated that many broadband Internet access
providers are also MVPD providers. These dual providers may have the incentive to block or
degrade the Internet content of their MVPD competitors. As a result, the Commission argues that
the open Internet rules are ancillary to the performance of its rulemaking authority to promote
competition in the MVPD market under Section 628.166
Commissioner McDowell also disagrees with this assertion of ancillary jurisdiction. He argues
that, though Section 628 does specifically grant rulemaking authority to the Commission over
video services provided by MVPDs, the jurisdictional hook is too tenuous to justify the open
Internet rules.167 There has never been an example of broadband service providers degrading the
provision of broadband video services, a scenario which seems to be the primary motivation for
the enactment of the rules. It seems to Commissioner McDowell, therefore, that the Commission
might be attempting to fix a market that is not “broken.”
Spectrum Licensing
The Commission has the authority to grant spectrum licenses and broad authority to place
conditions on those licenses.168 It has imposed network management rules on specific licenses in
the past, particularly the 700 megahertz spectrum license.169 Furthermore, the Commission has
the authority to retroactively apply requirements to license and has decided to apply the network
management rules to all mobile broadband providers.170 Therefore, the Commission argues that it
164 Open Internet Order, supra note 83, at ¶ 129.
165 47 U.S.C. § 548.
166 Open Internet Order, supra note 83, at ¶ 131.
167 McDowell Statement, supra note 129, at 166.
168 47 U.S.C. § 307.
169 Open Internet Order, supra note 83, at ¶ 134.
170 47 U.S.C. § 316(a)(1).
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has the authority to impose these rules on spectrum licensees. Again, Commissioner McDowell
finds the assertion of ancillary jurisdiction to be too generalized. The Commission could have
cited narrower provisions to apply the transparency and no blocking rules to these entities.171 The
approach taken here, McDowell argues, is contrary to the holding of the Comcast case.
Reporting to Congress
Lastly, the Commission cites Section 4(k) as authority to issue the transparency rules in the open
Internet order. Section 4(k) requires the Commission to supply an annual report to Congress
which must contain the information the Commission believes to be necessary to provide Congress
with a clear picture of the regulation of interstate wire and radio communication.172 The report
must also contain recommendations as to what additional legislation might be desirable. The
Comcast court appeared to agree that this provision could grant the Commission authority to
impose disclosure requirements on broadband Internet service providers. The court said “certain
assertions of the Commission authority could be reasonably ancillary to the Commission’s
statutory responsibility to report to Congress. For example the Commission might impose
disclosure requirements on regulated entities in order to gather data needed for such a report.”173
It is possible, therefore, that should the no blocking or anti-discrimination open Internet rules be
struck down, the transparency rules may be upheld on the jurisdictional basis asserted here.
Constitutional Issues
A number of industry commenters argued that the imposition of the open Internet rules violated
their First Amendment rights.174 These commenters argued that management of their broadband
networks was equivalent to the editorial judgments made by cable and satellite providers when
choosing which programming to provide to their customers.175 The Supreme Court has upheld
such editorial decisions to be speech protected by the First Amendment in the context of cable
operators’ programming choices,176 and commenters argue that broadband network management
stands on the same legal ground. Under this legal theory, rules that burden a broadband provider’s
ability to discriminate in the provision of content over its broadband network burden free speech
and may be unconstitutional.
The Commission disagreed. First, the Commission distinguished between broadband Internet
services and the editorial judgments made by cable programming and other MVPD providers.177
Cable and satellite providers, it said, must make the editorial judgment of deciding which
programs and which channels to provide to their customers. That was the critical factor in making
those entities “speakers” in the Commission’s reading of Court precedent.
171 McDowell Statement, supra note 129, at 165 – 166.
172 47 U.S.C. § 154(k).
173 600 F.3d at 659.
174 See, e.g., AT&T Comments at 235–44; AT&T Reply at 167–73; Verizon Comments at 111–18; Verizon Reply at
108–17; TWC Comments at 44–50; TWC Reply at 51–56.
175 Open Internet Order, supra note 83, at 140.
176 See Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 636 (1994).
177 Open Internet Order, supra note 83, at ¶¶ 140 – 142.
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The Commission argued that “broadband providers typically are best described not as ‘speakers’
but as conduits for speech.”178 The Commission reached this conclusion because, generally, it is
the end users of broadband services (both content providers and individuals) who determine what
content will be delivered to a particular computer (or other web surfing device). Furthermore,
broadband providers do not market themselves on the basis of their editorial presence. To the
contrary, from the Commission’s point of view broadband providers market themselves based on
their lack of intervention. The Commission, therefore, argues that broadband Internet access
providers are not speakers, and network management is not speech entitled to First Amendment
protection. The network management rules govern conduct only, the Commission reasons. From
this point of view, if accepted by a reviewing court, the open Internet rules would not implicate
the First Amendment.
The Supreme Court has yet to address whether the provision of broadband services or network
management of broadband services is speech. There appears, however, to be case law contrary to
the Commission’s interpretation.179 Federal district courts have twice concluded that the provision
of broadband services is “speech” protected by the First Amendment.180 However, neither case is
controlling precedent in any federal court of appeals that might hear a challenge to the open
Internet order. Commissioner McDowell, in his dissent, also argued that the provision of
broadband services is speech and that management of the network, determining which traffic to
prioritize and how to route is editorial conduct worthy of First Amendment protection in the same
way as cable and satellite providers.181 The Commission acknowledged these cases in a footnote,
but disagreed with their interpretation. A definitive determination of whether the provision of
broadband services constitutes speech protected by the First Amendment will likely have to be
made by a reviewing court.
Even if the provision of broadband services constitutes protected speech, the Commission
contends that the open Internet rules would survive constitutional scrutiny.182 In the
Commission’s analysis, the open Internet rules do not discriminate on the basis of content or
viewpoint. The regulations are triggered by the service provided and not by the content of any
message conveyed. Therefore, the Commission argues, the rules would be reviewed by the courts
as a content neutral restriction on speech that qualifies for what is known as intermediate
scrutiny.183 Unlike the more rigorous strict scrutiny, under which most burdens on free speech are
reviewed, intermediate scrutiny requires only that the regulation further a government interest
unrelated to the interest in suppressing free speech and that the regulation refrain from burdening
more speech than is necessary.184 The Commission argued that it would meet that standard
because the government has an interest in preserving the open Internet and encouraging
competition, and the rules, rather than burdening speech, actually protect the speech interests of
all Internet speakers.185 However, only a reviewing court can determine definitively which
178 Id.
179 See Ill. Bell Tel. Co. v. Vill of Itasca, 503 F. Supp. 2d 928 (N.D. Ill. 2007); Comcast Cablevision of Broward Cnty.,
124 F. Supp. 2d 685 (S.D. Fla. 2000).
180 Id.
181 McDowell Statement, supra note 129, at 169 – 172.
182 Open Internet Order, supra note 83, at ¶ 145.
183 Id. See also, Turner I, 512 U.S. 642, 660-662. CRS Report 95-815, Freedom of Speech and Press: Exceptions to the
First Amendment, by Kathleen Ann Ruane.
184 Turner I, 512 U.S. at 662.
185 Open Internet Order, supra note 83, ¶ 146.
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constitutional standards properly apply in this instance and whether the Commission has satisfied
that standard.
Author Contact Information
Kathleen Ann Ruane
Legislative Attorney
kruane@crs.loc.gov, 7-9135
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