The Shaky Foundations of the Regulated Internet

Abstract

The Federal Communications Commission's order directing Comcast to cease certain traffic management techniques in the name of network neutrality adopted a very strong theory of the FCC's regulatory jurisdiction over the Internet. This article offers three responses: (1) Briefly reviewing the theory of the FCC's "ancillary jurisdiction" and the theory offered in the Comcast order, the article concludes that the FCC's ancillary jurisdiction cannot be as broad as the agency asserted - for the agency claimed the power to regulate any aspect of Internet service, including price and quality of service. Because "ancillary jurisdiction," however broad, simply cannot be as broad as the FCC's nearly plenary authority over common carriers (as the FCC itself had previously recognized), the Comcast order states an untenable theory of regulatory power. (2) Although a rigorous administrative law analysis would conclude that the FCC does not have any "ancillary jurisdiction," that conclusion is foreclosed by Supreme Court precedent, both generally and by a specific dicta that the FCC has some ancillary authority over the Internet. The article concludes that the FCC's ancillary authority can be reasonably interpreted and rationally cabined - giving the FCC jurisdiction over Internet carriage of Title II and Title III services, meaning, for example, that the FCC has jurisdiction to regulate Internet carriers' treatment of "interconnected VOIP," as in fact the FCC has done. (3) Finally, the article offers a structure for conferring on the FCC an appropriate degree of regulatory authority over the Internet, through appropriate legislation. Because current antitrust doctrine struggles with the sorts of issues that might arise in the Internet, the FCC should have authority to enjoin unfair competition practices, when committed by Internet carriers offering public services (and at the retail level). This authority would be broad enough to cover the practices alleged in the Comcast case, but only if the FCC were to follow the substantive requirements of an unfair competition analysis (as it did not).

Keywords: Ancillary jurisdiction, Network neutrality, Internet regulation, Federal Communications Commission (FCC)