On January 14, 2014, the United States Court of Appeals for the District of Columbia Circuit issued its decision in Verizon v. FCC, the case regarding the Federal Communications Commission’s Open Internet Order. The decision leaves the door open for the FCC’s regulation of the internet, but strikes down certain provisions of the Order, leaving many to wonder what the future holds for innovation, experimentation, and competition in the online marketplace.
While the court did not unequivocally uphold the Commission’s net neutrality protections, it recognized the FCC’s authority to regulate broadband internet service and access under Section 706 of the Telecommunications Act of 1996, and found that open internet requirements would promote deployment. Specifically, it found support for the Commission’s conclusion that absent open internet requirements, “broadband providers represent a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” The court also deferred to the FCC’s finding that broadband providers have the ability to impose restrictions on edge providers’ conduct, particularly given end users’ inability to immediately respond to ISPs’ activities in this regard. Nonetheless, the court vacated and remanded the non-discrimination and no-blocking requirements adopted in the Order on the basis that they improperly constitute common carriage regulation of broadband services, but left in place the FCC’s transparency (i.e., disclosure) requirements.
Randy May and John Bergmayer held a spirited discussion about this landmark decision.
The Federalist Society's Faculty Division hosted a panel discussion that asked "Is IP Property or Government-Conferred Monopoly?" on Friday, January 3, 2014, during the 16th Annual Faculty Conference.
Panel 1: Is IP Property or Government-Conferred Monopoly?
1:00 - 2:45 p.m.
Warwick New York Hotel
New York NY
Is the antitrust enforcement authority of the Federal Trade Commission, proceeding under the FTC Act, broader than that of other litigants – whether private plaintiffs or the Department of Justice – proceeding under the Sherman Act? Section 5 of the FTC Act prohibits “unfair methods of competition in or affecting commerce” – language which some have interpreted as equivalent in scope with parallel provisions of the Sherman Act. As recent Supreme Court decisions have appeared to narrow the scope of the Sherman Act, however, the FTC has moved in the opposite direction. In addition to the Valassis and U-Haul “invitation to collude” cases (a cause of action not recognized under the Sherman Act), the FTC has pursued so-called “Sherman Act plus” antitrust actions against N-Data and Intel. Is this seeming divergence between FTC Act and Sherman Act enforcement authority legally defensible? What are its broader policy implications?
The Corporations, Securities & Antitrust Practice Group hosted this panel on "'New' Antitrust Enforcement Authority under the FTC Act" on Thursday, November 14, during the 2013 National Lawyers Convention.
Corporations: 'New' Antitrust Enforcement Authority under the FTC Act: Defensible Statutory Interpretation or Plumbing the Penumbras?
12:00 p.m. – 2:00 p.m.
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 the Comcast 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.