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June 27, 2005

Regulate the Internet?

Several interesting passages from the majority opinion in Brand X strongly suggest the FCC has authority to regulate cable modem services, even if those service are not common carrier telecommunications services.   (The Court affirms the FCC's decision that they are not.) This may be winning by losing for the cable companies, and it raises much broader issues.

After discussing that common carriers are required to charge reasonable rates (etc.), interconnect, and pay universal service fees, the Court says (pp. 3-4):

Information-service providers, by contrast, are not subject to mandatory common-carrier regulation under Title II, though the Commission has jurisdiction to impose additional regulatory obligations under its Title I ancillary jurisdiction to regulate interstate and foreign communications, see §§ 151-161.

And, toward the end of the opinion (p. 31), when it is addressing the argument that leaving cable-modem services outside of common carrier regulation creates irrationally different treatment between them and DSL (which is in common carriage), the Court says:

Any inconsistency between the order under review and the Commission’s treatment of DSL service can be adequately addresses when the Commission fully reconsiders its treatment of DSL service and when it decides whether, pursuant to its ancillary Title I jurisdiction, to require cable companies to allow independent ISP access to their facilities.

Of course, this precise issue was not before the Court, and, in a passage speaking specifically about the Commission’s rulemaking authority, the Court, while it cited to section 151 also cited not to 154 (the Title I rulemaking grant) but to section 201.

 
As I’ve written, I don’t think the FCC’s ancillary jurisdiction allows them to put common-carrier regulation on cable modem services (or other Internet services). The entire structure of the Act creates substantive rules based on service categories – common carrier services, spectrum uses, cable services. It is a huge expansion to say that the Commission has complete regulatory authority over anything that is communications

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