Statutory Interpretation and Extra Innings Advocacy For and Against Network Neutrality

Abstract

This paper investigates the legality of attempts by the Federal Communication Commission (“FCC”) to promote access and investment in broadband under Section 706 of the Telecommunications Act of 1996. Despite two appellate court decisions, which rejected the imposition of common carrier obligations on Internet Service Providers (“ISPs”), the FCC still wants to find a way to mandate openness, transparency and nondiscrimination in the manner by which ISPs handle traffic. The paper concludes that the FCC has limited, but available statutory authority to impose reporting requirements on ISPs and to use its investigative powers to examine interconnection and compensation disputes.

On two separate occasions an appellate court has largely rejected attempts by the FCC to regulate Internet access. Despite clearly prohibiting the FCC from imposing common carrier requirements on ISPs, stakeholders on both sides of the issue parse the court decisions for insights on what the FCC can do ostensibly to promote access and investment in broadband under Section 706 of the Telecommunications Act of 1996. The battle over the role of government in Internet regulation continues, despite clear guidance on what the FCC cannot do.

This paper will consider what the FCC can do by way of implementing Section 706. The paper will report how this statutory language has generated widely different interpretations among stakeholders with particular emphasis on past strategies used by the FCC to secure deference from courts to shape policies and rules. On the matter of Internet access, the D.C. Circuit Court of Appeals has refused to defer to the FCC’s statutory interpretation, because the Commission’s rules impose common carrier duties. However the court did agree that the Section 706 provides the FCC with statutory authority to promote access, innovation and investment in broadband services so long as the duties imposed do not constitute common carriage. Also in a recent case the D.C. Circuit affirmed FCC rules that required wireless carriers to support subscribers’ access to the Internet while “roaming” outside their home service region. While acknowledging that such access constitutes an information service and not a regulated telecommunications service, the court nevertheless endorsed FCC action as serving the public interest without imposing common carrier duties. This case provides network neutrality advocates with hope that the FCC can find ways to resolve disputes and require transparency without overstepping its limited statutory authority.

The paper concludes that the FCC should operate as a referee able to resolve complaints and disputes. The paper suggests that the FCC has statutory authority to impose transparency and reporting requirements on ISPs. Additionally the paper suggests that the FCC can use its investigative powers to determine whether congestion and legitimate network management, or deliberate and unnecessary meddling of subscribers’ traffic, has triggered degradation in service.

Keywords: Network Neutrality, FCC jurisdiction, Open Internet, next generation networks

JEL Classification: K23, L82, L96, L98