FCC Regulation of the Internet: Verizon v. FCC

Telecommunications & Electronic Media Courthouse Steps Teleforum

In Verizon v. FCC, Verizon is appealing, to the D.C. Circuit Court of Appeals, the Federal Communication Commission’s 2010 Open Internet Order.  At issue in the case is the FCC’s authority to regulate broadband Internet access service, which has traditionally been exempt from common-carrier regulation similar to that applied to telephone voice services, for example.

The oral argument, which is scheduled for Monday, September 9 at 9:30 a.m., will be before Judges Judith W. Rogers, David S. Tatel (who, interestingly, wrote both theComcast Corp. and Cellco Partnership decisions), and Laurence H. Silberman.  Our expert, International Center for Law & Economics Executive Director Geoffrey A. Manne, will attend the oral arguments and offer his perspectives on the merits of the case and the likely outcome.

Featuring:

• Prof. Geoffrey A. Manne, Executive Director, International Center for Law & Economics

In Verizon v. FCC, Verizon is appealing, to the D.C. Circuit Court of Appeals, the Federal Communication Commission’s 2010 Open Internet Order.  At issue in the case is the FCC’s authority to regulate broadband Internet access service, which has traditionally been exempt from common-carrier regulation similar to that applied to telephone voice services, for example.

In 2005 the FCC adopted a policy statement setting out four principles for internet access, including certain “open internet” provisions, such as consumers’ rights to access lawful internet content of their choice, to run applications and use services of their choice, and to connect their choice of legal devices to the network.  The FCC subsequently attempted to enforce these guidelines against Comcast for allegedly throttling (slowing down) or blocking network traffic generated by certain peer-to-peer file sharing software.  But in Comcast Corp. v. FCC, the D.C. Circuit held that the FCC had failed to demonstrate that it had either express statutory authority to regulate broadband internet access service or ancillary authority to regulate the same.  (“Ancillary authority” is authority that isn’t expressly granted in the statute, but is necessary in order to exercise the express authority given in the statute.)

Therefore, when the FCC adopted the 2010 Open Internet Order, it cited a wide range of statutory provisions, including Title III of the Communications Act of 1934, which governs wireless communications.  Substantively, the Order prohibits mobile broadband internet access providers from blocking lawful websites or applications that compete with their voice or video telephony services, prohibits fixed broadband internet access providers from engaging in blocking lawful content, applications, services, or non-harmful devices, prohibits fixed providers from engaging in “unreasonable discrimination” against services, and requires both fixed and mobile broadband internet access providers to disclose their network management practices, performance characteristics, and terms and conditions.

Verizon challenges the Order as  (1) imposing common-carriage requirements on services that are statutorily exempt from such requirements, or otherwise exceeding the FCC’s statutory authority; (2) lacking any explicit statutory authority or ancillary authority; (3) unconstitutional, particularly because it violates the First and Fifth Amendments; and (4) arbitrary and capricious in several respects.

Since Verizon challenged the Order, the D.C. Circuit decided another important case concerning FCC authority.  In Cellco Partnership v. FCC, the court upheld the FCC’s “data roaming” rules governing how wireless providers must treat data subscribers of other providers who roam onto their networks.  Specifically, the court found that the Commission had expansive powers under Title III.  The court also accorded deference to the Commission’s findings that those rules – which required wireless providers to offer data roaming to competitors on commercially reasonable terms – did not constitute “common carriage” requirements.

The oral argument, which is scheduled for Monday, September 9 at 9:30 a.m., will be before Judges Judith W. Rogers, David S. Tatel (who, interestingly, wrote both theComcast Corp. and Cellco Partnership decisions), and Laurence H. Silberman.  Our expert, International Center for Law & Economics Executive Director Geoffrey A. Manne, will attend the oral arguments and offer his perspectives on the merits of the case and the likely outcome.

Featuring:

• Prof. Geoffrey A. Manne, Executive Director, International Center for Law & Economics

Call begins at 2:00 p.m. Eastern Time.

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