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Unjustified hysteria over DC Circuit FCC decision

By 16 April 2010 10 Comments

The amount of hysteria over the DC Circuit Court decision to hand Comcast a victory over the FCC and the sheer volume of misinformation being propagated to the media is astounding.  The claim that the DC Circuit has somehow “stripped” the FCC of all ancillary powers and that even the National Broadband Plan is in jeopardy has no basis in reality.  The theory being propagated is that Title II reclassification of broadband infrastructure is needed to reestablish FCC authority over allegedly bad actors like Comcast and save the National Broadband Plan.  Not only are these claims unfounded, Title II reclassification is a myth and it never applied to Internet service in the first place.

Two previous FCC chairmen set the record straight

In an interview yesterday with two previous FCC Chairmen Michael Powell (R) and Reed Hundt (D), both Powell and Hundt agreed that the FCC still has jurisdiction on the Broadband Plan and Net Neutrality and that there isn’t “Armageddon” because of the DC Circuit ruling on the Comcast complaint.  Powell added that Title II reclassification would have a “destabilizing nature” to the industry because it would change decades long policy and that it would frustrate investments made under the current regulatory environment (e.g., the $23 billion investment Verizon made on their “FiOS” service which in large part was made possible by the lifting of Title II requirements on wireline infrastructure).

Skype is sorely mistaken on the DC Circuit ruling

Skype’s Christopher Libertelli made some disturbingly inaccurate assertions about the DC Circuit Court FCC decision.  Libertelli stated:

“And I think it’s interesting, because after the Comcast case, government has no policy in this space. It lacks subject matter jurisdiction, as the FCC lacks subject matter jurisdiction to enforce its Internet policy statement.”

This is completely wrong because “Subject matter jurisdiction” was never even contested by the plaintiff (Comcast) or defendant (FCC).  Comcast never questioned whether the FCC has subject matter jurisdiction and the DC Circuit Court accepted the FCC’s subject matter jurisdiction which means the FCC met the first of two legal requirement to prove ancillary jurisdiction.

Where the FCC got tripped up

What the DC Circuit ruled was that the FCC didn’t meet the second requirement needed to prove ancillary authority and they stated the following in their concluding paragraph:

“Because the Commission has failed to tie its assertion of ancillary authority over Comcast’s Internet service to any “statutorily mandated responsibility,””

So the FCC failed to tie their actions against Comcast to some “statutorily mandated responsibility” which means they failed the second of two requirements of the “American Library test” to prove ancillary authority in this matter.  The DC Circuit was not saying that the FCC has no ancillary authority, they even hinted a few times how the FCC could prove their case.  For example:

“Perhaps the Commission could use section 230(b) or section 1 to demonstrate such a connection, but that is not how it employs them here.”

The FCC did make an effort to tie their ancillary authority to Title VI by arguing that Comcast attempted to block Internet-based Video on Demand (VOD) services that used BitTorrent and that the FCC had the authority to regulate cable TV prices, but this was a glaring mistake.  The DC Circuit pointed out that the FCC’s authority to regulate cable pricing has now been reduced to “basic tier” cable service and that they are “expressly” prohibited from regulating VOD prices.  The DC Circuit said:

“Indeed, section 623 expressly prohibits the Commission from regulating rates for “video programming offered on a . . . per program basis,” i.e., video-on-demand service.”

The FCC also made some other arguments but they failed to follow through sufficiently for the DC Circuit to consider.

“some VoIP services were disrupted by Comcast’s network management practices. We have no need to examine this claim, however, for the Commission must defend its action on the same grounds advanced in the Order.”

Not only did the FCC fail to follow through, the accusation is baffling since no VoIP applications were blocked.  If the FCC was referring to Skype which is loosely called a peer-to-peer (P2P) application, then that isn’t factually sound because they are conflating two entirely different uses of the term “P2P”.  Skype and its application protocol are very different from BitTorrent or any other file sharing P2P application but it is very similar to most modern VoIP applications.  If an ISP prioritizes VoIP in general, then they also prioritize Skype as a VoIP application even though it’s labeled as “P2P” because Skype really is and behaves like a VoIP application.

So before anyone claims that the FCC lost all of its ancillary power and demand Title II reclassification, they should really read the DC Circuit ruling first and get their facts straight.