Comcast v FCC

04/09/10

• Personal jurisdiction - at what point does an individual or a company's activities on the net subject them to the jurisdiction of another state?
• Privacy - do we have the same expectation of privacy in our email as we do in our regular mail? Should we? What about chat room or instant messages? Anonymous posts to message boards or blogs? List of websites we visit? Books or music we buy online?
• Regulation - Who will regulate the internet, to what ends and to what extent?

Earlier this week the DC Court of Appeals handed down a ruling that will help determine the outer limits of the third question in Comcast v FCC. Headlines have sprouted up all over the net implying that this is a case about net neutrality, but that's like saying Peter Jackson's adaptation of the Lord of the Rings trilogy is about the scenic wonders of New Zealand. That may be the setting, but not the plot. The Lord of the Rings is an epic struggle between good and evil over the fate of every living creature, much like the ongoing battle between me and my cable company. This case is about the limits of the FCC's statutory authority to regulate Internet Service Providers, or ISP's.

In 2007 Comcast subscribers noticed that Comcast was interfering with their ability to use P2P applications. P2P, or Peer to Peer, applications allow users to exchange files at a high speeds by connecting directly, bypassing servers. The problem from the perspective of an ISP is that it tends to use up large amounts of bandwidth. A complaint was made to the FCC, which determined that it had jurisdiction over ISP's network management practices and that it could rule through adjudication rather than regulation. While the FCC was proceeding, Comcast changed its policies allowing its users to once again use P2P applications. The FCC issued an order requiring Comcast to notify users of its new policies and indicated that should it change back, an injunction would follow. Comcast complied with the order but brought a suit against the FCC challenging its authority to regulate network management policies.

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Although Comcast made three arguments, the circuit court began and ended with the first - jurisdiction. Had this truly been a case about net neutrality there would have been discussion about the merits of net neutrality rules and whether Comcast violated them, but the court spent no more time discussing these issues than Frodo and Sam spent marveling at the beauty of the landscape.

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The FCC claimed it had ancillary jurisdiction. Ancillary jurisdiction stems from three Supreme Court cases that recognized the FCC's regulatory authority over cable TV in the early days of cable, before Congress expressly amended the Communications Act to give the agency a statutory mandate. The DC Circuit developed, based on these cases, a two part test to determine whether or not ancillary jurisdiction applied. ''The Commission ... may exercise ancillary jurisdiction only when two conditions are satisfied: (1) the Commission's general jurisdictional grant under Title I [of the Communications Act] covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission's effective performance of its statutorily mandated responsibilities.'' Part 1 of the test was conceded by Comcast so only part 2 was addressed by the court.

The court found that there were no statutory responsibilities that the FCC could point to as justification for its claim of jurisdiction. Although the FCC raised several sections of the Communications Act, in each case the court found that they were policy statements as opposed to statutory responsibilities and pointed to a long line of cases that said policy statements were only controlling when they explained how to implement actual statutory powers.

So what does this mean for net neutrality? It means that the issue is still ripe for Congress to address. Whether they do so by handing over regulatory authority to the FCC in the future or not is up to Congress but until they expressly do so the FCC can't create net neutrality through its regulations - at least not in the DC Circuit.