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Net Neutrality & the Fifth Amendment

By 6 December 2010 3 Comments

Virtual Takings: The Coming Fifth Amendment Challenge to Net Neutrality Regulation, by Daniel Lyons of BC Law School (available at SSRN and scheduled for the Notre Dame Law Review):

[A]rgues that under the Supreme Court’s Takings Clause jurisprudence, the Commission’s proposed net neutrality rules effect a permanent physical occupation of private broadband networks and therefore take broadband providers’ property without just compensation. In essence, net neutrality would grant Internet content providers a permanent virtual easement across privately-owned broadband networks to deliver content to end-users. It thus would deprive broadband providers of the right to exclude others from their networks – a right that the Court’s takings jurisprudence has repeatedly dubbed “one of the most essential sticks in the bundle of rights that are commonly characterized as property.”

Lyons makes an interesting case. In general, the law of Takings is muddled, but one island of clarity is that the government does indeed “take” when it physically occupies territory or mandates that someone else be allowed to occupy it. It is difficult to see why a control over who gets to use telecommunications equipment is not within this rule. Certainly, a requirement that utility companies allow attachments to their poles invokes the Fifth Amendment, according to the 11th Circuit (Lyons at 29). One could argue that the “must carry” cases, which involved requirements imposed on cable to carry broadcast channels, cut the other way, but those were argued purely as free speech cases. For some reason, the cable operators did not raise the Fifth.

The Second Circuit ruled against the property owners on the must-carry Fifth Amendment argument in Cablevision (2009), concluding that must carry rules do not constitute a physical invasion, and that, therefore, to make its case Cablevision would have to meet the more complex standards applicable to a regulatory Taking as opposed to a physical occupation. It is not clear why the court thought this – to fail to view a stream of electronic energy as physical seems to demonstrate a certain lack of imagination, but in any case it would seem like the more rigorous standard could in fact be met, since bandwidth is not infinite and its compulsory use for one purpose precludes its use for another possibly more profitable one.

In any case, Lyon’s argument is well worth thinking about.

Source of link: CEI’s OpenMarket.org.

Image from CEI’s OpenMarket.org.