Wickard for the Internet? Network Neutrality After Verizon v. FCC
By Christopher S. Yoo
The D.C. Circuit’s January 2014 decision in Verizon v. FCC represented a major milestone in the debate over network neutrality that has dominated communications policy for the past decade. This article analyzes the implications of the D.C. Circuit’s ruling, beginning with a critique of the court’s ruling that section 706 of the Telecommunications Act of 1996 gave the Federal Communications Commission (FCC) the authority to mandate some form of network neutrality. Examination of the statute’s text, application of canons of construction such as ejusdem generis and noscitur a sociis, and a perusal of the statute’s legislative history all raise questions about the propriety of the court’s conclusion. Moreover, the precedents on ancillary jurisdiction and common carriage impose limits to the FCC’s section 706 jurisdiction, preventing the FCC from regulating content before or after it is in transit and likely barring the FCC from imposing a strict nondiscrimination mandate. A revised rule based on commercial reasonableness as initially proposed by the FCC could accomplish many of the goals of network neutrality without running afoul of these prohibitions.
Reclassification of broadband Internet access to bring it within the regulatory regime governing traditional telephone service (known as Title II) faces substantial statutory obstacles, would not prevent prioritization of services, and ignores the longstanding problems associated with common carriage regulation and forbearance. The legislative history of section 706 also suggests that the FCC has the authority to preempt the concurrent jurisdiction accorded to state retaliatory authorities. Moreover, calls to extend network neutrality to interconnection between networks overlooks the fact that such arrangements are not universal and instead are based on some type of reciprocity and that requiring zero-price interconnection would ignore the important role played by prices and by bilateral negotiations. The article closes by examining five early examples of network neutrality disputes: MetroPCS/YouTube, AT&T/Apple FaceTime, Verizon/Google tethering apps, Verizon/Google Wallet, and the Amazon Kindle/zero-rating. These cases demonstrate the difficulties surrounding the implementation of network neutrality rules.
Sender Side Transmission Rules for the Internet
By Tejas N. Narechania and Tim Wu
In January 2014, the U.S. Court of Appeals for the D.C. Circuit struck down the FCC’s 2010 Open Internet Order, which contained the Commission’s net neutrality rules. The Commission has since indicated that it will take up the D.C. Circuit’s invitation to implement rules that, consistent with historic practice, meet the court’s test for preventing improper blocking and discrimination of Internet traffic. In this paper, we consider the Commission’s options for a path forward under Title II of the Communications Act. We find that the FCC has at least two available paths. The first is predominantly legal: By adopting the two-stage framework articulated by the D.C. Circuit characterizing broadband transactions as including a call and a response, the Commission can conclude that response, or sender-side, transmissions are a telecommunications service under the statute. The second path is predominantly factual: The Commission can consider whether it is still swayed by its analysis, now well over a decade old, that analogizes broadband subscription services to dial-up Internet access. Regardless of the path the Commission chooses, it will reach a similar destination. Either course allows the Commission to meet the promise to prevent improper blocking and discrimination.
The D.C. Circuit’s decision in Verizon v. FCC, holding that the FCC may regulate broadband but that its nondiscrimination rules were impermissible common carrier regulation of information services, leaves the FCC with few options going forward. Somewhat surprisingly, the D.C. Circuit did not leave the FCC the customary administrative law option of a better explanation for why its nondiscrimination rules were different from common carriage (even though, as I discuss here, such an explanation may have been possible). As a result, the Commission’s best path—both doctrinally and as a policy matter—is to adopt rules based on an antitrust foundation: rules that forbid behavior that may have the effect of foreclosing competition. To be sure, the very best option would be for Congress to act to set fundamental policy in this area (one way or another), but the prospects of that seem slim. This short essay discusses why a competition-law based rule would meet many of the FCC’s Open Internet goals and why the FCC should act, even though both the Department of Justice and the Federal Trade Commission have specific antitrust authority.
Net Neutrality 10 Years Later: A Still Unconvinced Commissioner
By Deborah T. Tate
In January 2014, the Federal Communications Commission suffered its second defeat before the U.S. Court of Appeals for the D.C. Circuit regarding the agency’s authority to impose so-called “net neutrality” regulation on broadband Internet providers. Despite these losses, the FCC is now developing a third version of net neutrality rules. As a former FCC Commissioner who experienced firsthand the investigation of Comcast’s network management practices, I fear that net neutrality rules would undermine competition and consumer choice.
The Internet has enabled unfathomable innovation and investment, democratizing commerce and unleashing the entrepreneurial forces of countless individuals—including many women and minorities. Net neutrality regulation would endanger this virtuous cycle, turning the clock backwards toward the highly regulated era of telephone service as a public utility. Broadband providers should be free to negotiate with content companies to finance the networks of tomorrow. The FCC, like the nation, faces real challenges, from spectrum allocation to broadband adoption. We must refrain from regulation taking aim at shadows if we are to realize the promise of unleashing the very best America has to offer to our consumers, our creators, our children and, indeed, the world.
No Dialtone: Second Thoughts on the PSTN’s Demise
By Gerald R. Faulhaber
Kevin Werbach’s excellent article in the last issue, No Dialtone: The End of the Public Switched Telephone Network, tees up an extremely important emerging issue for telecommunications policy: How are we to deal with the imminent demise of the PSTN? As telephony moves from copper wire to IP-based technology, functionality will improve and costs will decrease—but in getting from here to there, regulators, telephone companies, and customers face a very costly transition. Werbach outlines the problems quite well; however, his conclusion and recommendations include not only continued regulation, but the extension of such regulation to the Internet. His rationale for extending regulation to the Internet is quite weak, and in my view, potentially devastating to the Internet as we know it. We are in danger of allowing the telephony tail to wag the Internet dog, to its ultimate detriment.
Wi-Fi Security: Shaping Data Privacy Rules
By Carla Voigt
In 2010, the FCC opened an investigation into Google’s Street View project, after the company admitted in May 2010 that its Street View cars had collected samples of payload data, including “e-mail and text messages, passwords, Internet usage history, and other highly sensitive personal information,” from unsecured Wi-Fi networks. This Note examines the authority of the FCC to address unauthorized interception of unencrypted Wi-Fi data under the Wiretap Act and finds that this outdated regulatory framework places the FCC at a regulatory disadvantage. Part II of this Note explains how Wi-Fi works and why many consumers who believe their private information is protected are actually vulnerable to attack. Part III discusses the FCC’s authority to regulate the interception of Wi-Fi communications under the agency’s general statutory jurisdiction over communications technologies. Part III also explores recent litigation that demonstrates the inconsistencies in statutory interpretation that have arisen as a result of new technology and the ambiguous existing statutory framework. Part IV examines recent FCC administrative litigation and why it is important for the FCC to regulate new technology so as to bolster information privacy. Part V argues that Congress should amend the Wiretap Act to better protect user privacy. Part VI weighs several possible FCC administrative solutions and combinations thereof. Part VII discusses the implications of these administrative and legislative reforms for consumers and corporations.
Cybersecurity is a pressing problem, jeopardizing both national security and individual online safety. As more communications services become Internet-dependent and ultimately transition to an “all-IP” system, our communications system is increasingly vulnerable to cyber attacks. The FCC has direct authority over cable services and telecommunications carriers, both wired and wireless; with that power comes the corresponding authority to ensure the reliability of these services through regulation. However, IP-based broadband service is currently classified as an “information service,” which sidesteps many of the requirements in the Communications Act and the FCC’s corresponding authority to regulate.
To regulate an information service, the FCC must rely on its ancillary authority and satisfy two requirements: (1) the service to be regulated must fall within the FCC’s Title I grant, and (2) the FCC’s regulations must be reasonably ancillary to the agency’s effective performance of a statutory mandate. This Note analyzes the FCC’s ability to use its ancillary authority to require ISPs to implement cybersecurity standards, concluding that the FCC has jurisdiction to implement minimum standards because of the potential for cybersecurity flaws and a lack of minimum standards to cause catastrophic failure of the communications network.
Because of the FCC’s knowledge, institutional competence, and experience with the communications industry, it is in a better position to examine potential regulations and solutions to cybersecurity woes than other government agencies. This Note considers whether the FCC should exercise its ancillary authority, concluding that government intervention is justified by both the market failure in information about vulnerability to cyber attacks, and the compelling need for a reliable communications. The Note concludes with a brief discussion of the costs and benefits of potential regulation.