Last week, the Free State Foundation published my latest Perspectives (0) article. In it, I discuss the history of the Federal Communications Commission’s ancillary authority to regulate entities outside its jurisdictional core. The article shows that the Commission’s claim to jurisdiction over broadband Internet providers stretches beyond the limits recognized by judicial precedent, and may bode ill for the agency on that basis. An excerpt is below; the full piece provides much greater depth.
Whether the agency will successfully defend its net neutrality rules will turn largely upon its ability to defend this jurisdictional theory, known as Title I ancillary authority. At first glance, one might think the agency’s chances are good: the United States Supreme Court has long recognized that Title I allows the Commission to oversee at least some communications beyond the broadcasters and telephone companies that lay at its historical regulatory core. Title I acts as the rough agency equivalent of the Constitution’s “necessary and proper” clause, permitting the Commission to regulate other communications by wire or radio if such regulation is “necessary to ensure the achievement of the Commission’s statutory responsibilities.”
But the legal arguments over net neutrality show that the Commission’s recent reliance on Title I is both quantitatively and qualitatively unmoored from its historical origins. The Commission has invoked its ancillary authority roughly as often in the past six years as it did in the preceding seventy-three years combined. And it has increasingly done so not to perfect its statutory obligations over twentieth century broadcasting, cable, and telephone networks, but to create new obligations on twenty-first century IP networks.
In an apparent attempt to remain relevant in light of technological change, the Commission seeks to transform itself from an agency that carries out a congressional mandate to one that creates common-law-like regulation of the Internet. But the Commission’s ancillary authority cannot support such lofty aspirations. The statute, prior case law, and basic rule of law principles require that any claimed authority be subject to principled constraints.
The article goes on to examine the origin of the agency’s ancillary authority, established in a trilogy of cases involving the agency’s initial efforts to regulate cable television. These cases show that the agency can use ancillary authority only to regulate interstate communications by wire or radio, and only where the regulation is “necessary to ensure the achievement of the Commission’s statutory responsibilities,” a limit emphasized by both Congress and the Supreme Court. But the Commission has done little to show how the broadband rules are “necessary” to its continued regulation of broadcast, cable, or telephone service. Moreover, the there is virtually no limit to the potential regulations the Commission could enact under its theory. In the earlier Comcast case, the DC Circuit emphasized that a limiting principle is important to prevent the Commission from being “free[d] from its congressional tether.”
In a sense, the Commission’s effort to stretch its ancillary authority to encompass Internet service and activities is understandable. Consumers are fleeing the twentieth century communications networks that lay at its regulatory core, at an unprecedented rate. They are instead focusing on twenty-first century IP networks, which are similar in some ways to their predecessors, but also different in many ways. Thus far, Congress has not provided the Commission guidance regarding what, if anything, it should do in response to this transition. So the Commission has attempted to fill the policy void itself, using whatever tools it perceives to be at its disposal.
But the Commission cannot use Title I to freelance at the edge of its statutory authority. Both the language of the Act and the cable cases teach that ancillary authority allows the Commission flexibility when carrying out the will of Congress – not to make new rules when Congress fails to act. The distinction was captured well by Chief Justice Burger’s concurrence in Midwest Video I: “The almost explosive development of [cable television] suggests the need of a comprehensive re-examination of the statutory scheme as it relates to this new development, so that the basic policies are considered by Congress and not left entirely to the Commission and the courts.” Similarly, the explosive growth of the Internet suggests the need to revisit the Act yet again.
Going forward, the basic policies of American communications law must be set by Congress, not the agency. In its current form, the Communications Act offers only thin reeds, reeds that cannot support the weight of an agency-manufactured “law of the Internet.”
The full text of the article is available here (1).