Case Blog - Comcast v. FCC

Case Blog - Comcast v. FCC

Today I planned on talking about State v. Cox... As you can tell, this is not State v. Cox, but rather Comcast v. FCC.  I present this case today because of my strong feelings on the issues of the net.  Let me start by introducing you to our contenders today:

Comcast - Evil, powerful, private broadband company that is intent on providing it's customers with access to landlines, cable television, and internet (while charging whatever they can get away with).  Considered by many to be a monopoly service providing thug, although I think I might analogize them more as your friendly neighborhood drug dealer (but more evil, and legal).

FCC - Evil governmental agency bent on controlling what you are allowed to see and hear over the air waves and through your television.  Think of the "7 words" you can't say on the radio.  They are the reason you can't say them.

As you can tell, I am a big fan of both organizations[!]  So this ruling has me a little confused and disorientated.  

The issue was this: Comcast was caught blocking some of it's users from being able to accessing some programs on the internet (think of a private American version of the Great Firewall of China).  Suit was filed with the FCC who determined that "consumers are entitled to access the lawful Internet content of their choice . . . [and] to run applications and use services of their choice.”  Comcast defended its interference with peer-to-peer programs as necessary to manage scarce network capacity. - Well it looks like I would side with the FCC on this one (wow, that seems weird to say).

Comcast, of course, appealed to the Court of Appeals, who produced yesterday's ruling.  The FCC did not have the authority to require Comcast to provide equal access to the internet, and applications over the internet.  In defense of the court, their decision seemed to be well founded, and essentially the FCC dropped the ball on how they should have gone about this.

Now, there are several options available to the FCC at this point: 1) Appeal to the US SCt (they will probably lose); 2) Ask Congress to give them the power; 3) Reconstruct and interrupt the powers originally granted to them give a better basis.  

I'm no Admin Lawyer, but I think I got that right, Prof. Murphy would probably be happy I remembered at least a little of his class.

Here's one of my favorite parts, Comcast's statement following the court ruling:


“We are gratified by the Court’s decision today to vacate the previous FCC’s order.  Our primary goal was always to clear our name and reputation. We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want.   Comcast remains committed to the FCC’s existing open Internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant Internet.”

Here's my interpretation of their statement:

"We are happy we don't have to listen to the FCC.  We just wanted to make sure we had the power to screw with people.  We have always been focused on screwing with people and taking their money, but it's nice that the Court of Appeals has allowed us to do this.  We remain committed to trying to screw with people to the maximum extent of the law and the FCC." 

I would like to note that this is my rant-n-rave, based on my personal views and beliefs.  The actual case is re-posted below, so you can read it for yourself.

Please remember that the interpretation and analysis presented here is not intended to be legal advice.  If you are seeking legal advice please contact us for a free consultation and actual examination the issues that your case may present.

Thank you,
Landon J. Ascheman, Esq.
Landon@AschemanSmith.com
(B) 612.217.0077 (C) 651.280.9533 (F) 651.344.0700

Contact Me LinkedinFacebookBlog RSSTwitterGoogleGoogleGoogle

P.S. Have an attorney in your phone? Add us now 612-217-0077 - While we hope you never need us, we're here if you do.





United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 8, 2010 Decided April 6, 2010
No. 08-1291
COMCAST CORPORATION,PETITIONER
v.
FEDERAL COMMUNICATIONS COMMISSION AND UNITEDSTATES OF AMERICA,RESPONDENTSNBC UNIVERSAL, ET AL.,INTERVENORS

On Petition for Review of an Orderof the Federal Communications
Commission Helgi C. Walker argued the cause for petitioner. With her on the briefs were Eve Klindera Reed, Elbert Lin, David P. Murray, James L. Casserly, and David H. Solomon.Howard J. Symons argued the cause for intervenorsNational Cable & Telecommunications Association and NBCUniversal. With him on the briefs were Neal M. Goldberg,Michael S. Schooler, and Margaret L. Tobey. Richard Cottonentered an appearance.Kyle D. Dixon was on the brief for amici curiaeProfessors James B. Speta and Glen O. Robinson and TheProgress and Freedom Foundation in support of petitioner.Austin C. Schlick, General Counsel, FederalCommunications Commission, argued the cause forrespondents. With him on the brief were Catherine G.O'Sullivan and Nancy C. Garrison, Attorneys, U.S.Department of Justice, Joseph R. Palmore, Deputy GeneralCounsel, Federal Communications Commission, Richard K.Welch, Deputy Associate General Counsel, and Joel Marcus,Counsel. Daniel M. Armstrong III, Associate GeneralCounsel, entered an appearance.Marvin Ammori argued the cause for intervenors FreePress, et al. in support of respondents. With him on the briefwere Henry Goldberg, Harold Feld, and Andrew JaySchwartzman.John F. Blevins was on the brief for amici curiaeProfessors Jack M. Balkin, et al. in support of respondents.
Before: SENTELLE, Chief Judge, TATEL, Circuit Judge,and RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.TATEL, Circuit Judge: In this case we must decidewhether the Federal Communications Commission has authority to regulate an Internet service provider’s networkmanagement practices. Acknowledging that it has no expressstatutory authority over such practices, the Commission relieson section 4(i) of the Communications Act of 1934, whichauthorizes the Commission to “perform any and all acts, makesuch rules and regulations, and issue such orders, notinconsistent with this chapter, as may be necessary in theexecution of its functions.” 47 U.S.C. § 154(i). TheCommission may exercise this “ancillary” authority only if itdemonstrates that its action—here barring Comcast frominterfering with its customers’ use of peer-to-peer networkingapplications—is “reasonably ancillary to the . . . effectiveperformance of its statutorily mandated responsibilities.” Am.Library Ass’n v. FCC, 406 F.3d 689, 692 (D.C. Cir. 2005).The Commission has failed to make that showing. It reliesprincipally on several Congressional statements of policy, butunder Supreme Court and D.C. Circuit case law statements ofpolicy, by themselves, do not create “statutorily mandatedresponsibilities.” The Commission also relies on variousprovisions of the Communications Act that do create suchresponsibilities, but for a variety of substantive andprocedural reasons those provisions cannot support itsexercise of ancillary authority over Comcast’s networkmanagement practices. We therefore grant Comcast’s petitionfor review and vacate the challenged order.I.In 2007 several subscribers to Comcast’s high-speedInternet service discovered that the company was interferingwith their use of peer-to-peer networking applications. SeePeter Svensson, Comcast Blocks Some Internet Traffic,ASSOCIATED PRESS, Oct. 19, 2007. Peer-to-peer programsallow users to share large files directly with one anotherwithout going through a central server. Such programs alsoconsume significant amounts of bandwidth.Challenging Comcast’s action, two non-profit advocacyorganizations, Free Press and Public Knowledge, filed acomplaint with the Federal Communications Commissionand, together with a coalition of public interest groups andlaw professors, a petition for declaratory ruling. Compl. ofFree Press & Public Knowledge Against Comcast Corp., FileNo. EB-08-IH-1518 (Nov. 1, 2007) (“Compl.”); Pet. of FreePress et al. for Decl. Ruling, WC Docket No. 07-52 (Nov. 1,2007) (“Pet.”). Both filings argued that Comcast’s actions“violat[ed] the FCC’s Internet Policy Statement.” Compl.at 1; Pet. at i. Issued two years earlier, that statement“adopt[ed] the . . . principles” that “consumers are entitled toaccess the lawful Internet content of their choice . . . [and] torun applications and use services of their choice.” In reAppropriate Framework for Broadband Access to the InternetOver Wireline Facilities, 20 F.C.C.R. 14,986, 14,988, ¶ 4(2005). Comcast defended its interference with peer-to-peerprograms as necessary to manage scarce network capacity.Comments of Comcast Corp. at 14, WC Docket No. 07-52(Feb. 12, 2008).Following a period of public comment, the Commissionissued the order challenged here. In re Formal Compl. ofFree Press & Public Knowledge Against Comcast Corp. forSecretly Degrading Peer-to-Peer Applications, 23 F.C.C.R.13,028 (2008) (Order). The Commission began byconcluding not only that it had jurisdiction over Comcast’snetwork management practices, but also that it could resolvethe dispute through adjudication rather than throughrulemaking. Id. at 13,033–50, ¶¶ 12–40. On the merits, theCommission ruled that Comcast had “significantly impededconsumers’ ability to access the content and use theapplications of their choice,” id. at 13,054, ¶ 44, and thatbecause Comcast “ha[d] several available options it could useto manage network traffic without discriminating” againstpeer-to-peer communications, id. at 13,057, ¶ 49, its methodof bandwidth management “contravene[d] . . . federal policy,”id. at 13,052, ¶ 43. Because by then Comcast had agreed toadopt a new system for managing bandwidth demand, theCommission simply ordered it to make a set of disclosuresdescribing the details of its new approach and the company’sprogress toward implementing it. Id. at 13,059–60, ¶ 54. TheCommission added that an injunction would automaticallyissue should Comcast either fail to make the requireddisclosures or renege on its commitment. Id. at 13,060, ¶ 55.Although Comcast complied with the Order, it nowpetitions for review, presenting three objections. First, itcontends that the Commission has failed to justify exercisingjurisdiction over its network management practices. Second,it argues that the Commission’s adjudicatory action wasprocedurally flawed because it circumvented the rulemakingrequirements of the Administrative Procedure Act andviolated the notice requirements of the Due Process Clause.Finally, it asserts that parts of the Order are so poorlyreasoned as to be arbitrary and capricious. We begin—andend—with Comcast’s jurisdictional challenge.II.Through the Communications Act of 1934, ch. 652, 48Stat. 1064, as amended over the decades, 47 U.S.C. § 151 etseq., Congress has given the Commission express andexpansive authority to regulate common carrier services,including landline telephony, id. § 201 et seq. (Title II of theAct); radio transmissions, including broadcast television,radio, and cellular telephony, id. § 301 et seq. (Title III); and“cable services,” including cable television, id. § 521 et seq.(Title VI). In this case, the Commission does not claim thatCongress has given it express authority to regulate Comcast’sInternet service. Indeed, in its still-binding 2002 CableModem Order, the Commission ruled that cable Internetservice is neither a “telecommunications service” covered byTitle II of the Communications Act nor a “cable service”covered by Title VI. In re High-Speed Access to the InternetOver Cable and Other Facilities, 17 F.C.C.R. 4798, 4802, ¶ 7(2002), aff’d Nat’l Cable & Telecomms. Ass’n v. Brand XInternet Servs., 545 U.S. 967 (2005). The Commissiontherefore rests its assertion of authority over Comcast’snetwork management practices on the broad language ofsection 4(i) of the Act: “The Commission may perform anyand all acts, make such rules and regulations, and issue suchorders, not inconsistent with this chapter, as may be necessaryin the execution of its functions,” 47 U.S.C. § 154(i). Order,23 F.C.C.R. at 13,036, ¶ 15.Courts have come to call the Commission’s section 4(i)power its “ancillary” authority, a label that derives from threefoundational Supreme Court decisions: United States v.Southwestern Cable Co., 392 U.S. 157 (1968), United Statesv. Midwest Video Corp., 406 U.S. 649 (1972) (MidwestVideo I), and FCC v. Midwest Video Corp., 440 U.S. 689(1979) (Midwest Video II). All three cases dealt withCommission jurisdiction over early cable systems at a timewhen, as with the Internet today, the Communications Actgave the Commission no express authority to regulate suchsystems. (Title VI, which gives the Commission jurisdictionover “cable services,” was not added to the statute until 1984.See Cable Communications Policy Act of 1984, Pub. L. No.98-549, 98 Stat. 2779.)In the first case, Southwestern Cable, the Supreme Courtconsidered a challenge to a Commission order restricting thegeographic area in which a cable company could operate. 392U.S. at 160. At that time, cable television, then known as“community antenna television” (CATV), functioned quitedifferently than it does today. Employing strategicallylocated antennae, these early cable systems simply receivedover-the-air television broadcasts and retransmitted them bycable to their subscribers. Id. at 161–62. Although theyrarely produced their own programming, they improvedreception and allowed subscribers to receive televisionprograms from distant stations. Id. at 162–63. Seeking toprotect Commission-licensed local broadcasters, theCommission adopted rules limiting the extent to which cablesystems could retransmit distant signals and, in the order atissue in Southwestern Cable, applied this policy to a particularcompany. The Supreme Court sustained that order,explaining that even though the then-existingCommunications Act gave the Commission no expressauthority over cable television, the Commission couldnonetheless regulate cable television to the extent “reasonablyancillary to the effective performance of the Commission’svarious responsibilities for the regulation of televisionbroadcasting.” Id. at 178. Four years later, in MidwestVideo I, the Court again sustained the Commission’s use of itsancillary authority, this time to support issuance of aregulation that required cable operators to facilitate thecreation of new programs and to transmit them alongsidebroadcast programs they captured from the air. 406 U.S. at670. In Midwest Video II, the Court rejected theCommission’s assertion of ancillary authority, setting asideregulations that required cable systems to make certainchannels available for public use. 440 U.S. at 708–09.We recently distilled the holdings of these three casesinto a two-part test. In American Library Ass’n v. FCC, wewrote: “The Commission . . . may exercise ancillaryjurisdiction only when two conditions are satisfied: (1) theCommission’s general jurisdictional grant under Title I [of theCommunications Act] covers the regulated subject and (2) theregulations are reasonably ancillary to the Commission’seffective performance of its statutorily mandatedresponsibilities.” 406 F.3d at 691–92; see also Order, 23F.C.C.R. at 13,035, ¶ 15 n.64 (citing the American Librarytest). Comcast concedes that the Commission’s action heresatisfies the first requirement because the company’s Internetservice qualifies as “interstate and foreign communication bywire” within the meaning of Title I of the CommunicationsAct. 47 U.S.C. § 152(a). Whether the Commission’s actionsatisfies American Library’s second requirement is the centralissue in this case.III.Before addressing that issue, however, we must considertwo threshold arguments the Commission raises. First, itasserts that given a contrary position Comcast took in aCalifornia lawsuit, the company should be judicially estoppedfrom challenging the Commission’s jurisdiction over thecompany’s network management practices. Second, theCommission argues that even if Comcast’s challenge canproceed, we need not go through our usual ancillary authorityanalysis because a recent Supreme Court decision, NationalCable & Telecommunications Ass’n v. Brand X InternetServices, 545 U.S. 967, makes clear that the Commission hadauthority to issue the Order.A.Courts may invoke judicial estoppel “[w]here a partyassumes a certain position in a legal proceeding, . . . succeedsin maintaining that position, . . . [and then,] simply becausehis interests have changed, assume[s] a contrary position.”New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (internalquotation marks omitted). For judicial estoppel to apply,however, “a party’s later position must be ‘clearlyinconsistent’ with its earlier position.” Id. at 750 (quotingUnited States v. Hook, 195 F.3d 299, 306 (7th Cir. 1999)).“Doubts about inconsistency often should be resolved byassuming there is no disabling inconsistency, so that thesecond matter may be resolved on the merits.” 18B CHARLESALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER,FEDERAL PRACTICE AND PROCEDURE §4477, at 594 (2d ed.2002).The Commission’s estoppel argument rests on theposition Comcast took while defending against a civil actionin a California federal court. In that case, one of Comcast’sInternet customers challenged the company’s interferencewith peer-to-peer programs at the same time Free Press andPublic Knowledge were pressing their own challenges beforethe Commission. Comcast responded by moving to stay thelitigation pending resolution of the Commission proceedings.In support, it invoked the “primary jurisdiction doctrine,”arguing that “a court is ‘obliged to defer’ to an agency wherethe ‘issue brought before a court is in the process of litigationthrough procedures originating in the [agency].’” Def.’sMem. of Law in Supp. of Mot. for J. on Pleadings at 10, Hartv. Comcast of Alameda, Inc., No. 07-6350 (N.D. Cal. 2008)(“Comcast Cal. Mem.”) (quoting Fed. Power Comm’n v. La.Power & Light Co., 406 U.S. 621, 647 (1972)). In languagethe Commission now emphasizes, Comcast continued: “Anyinquiry into whether Comcast’s [peer-to-peer] management isunlawful falls squarely within the FCC’s subject matterjurisdiction.” Id. Persuaded, the district court granted therequested stay.According to the Commission, when Comcast argued thatthe Commission has “subject matter jurisdiction” over itsdisputed network management practices, it was saying thatany action by the Commission to prohibit those practiceswould satisfy both elements of the American Library test andthus lie within the Commission’s ancillary authority.“Because Comcast prevailed . . . on [that] theory,” theCommission contends, “it should be estopped from arguingthe opposite here.” Resp’t’s Br. 30. For its part, Comcastinsists it never argued that the Commission could justifyexercising ancillary authority over its network managementpractices. Instead, it claims that in saying that theCommission possesses “subject matter jurisdiction” overthose practices, it was arguing no more than what it concedeshere, namely that its Internet service constitutes“communication by wire” within the meaning of AmericanLibrary’s first requirement. Interpreted that way, Comcast’sCalifornia position does not conflict with the argument itmakes here, which rests on American Library’s secondrequirement: that the Commission must show that itsregulation of Comcast’s Internet service is “reasonablyancillary to the Commission’s effective performance of itsstatutorily mandated responsibilities.” 406 F.3d at 692.Although the parties’ competing interpretations ofComcast’s California argument are both plausible, Comcast’sis more so. For one thing, its interpretation comports with theoverall primary jurisdiction argument it advanced in that case.As a leading administrative law treatise explains, “Thequestion of whether an issue is within [an] agency’s primaryjurisdiction is different from the question of whether theagency actually has exclusive statutory jurisdiction to resolvean issue.” 2 RICHARD J. PIERCE, JR., ADMINISTRATIVE LAWTREATISE § 14.1, at 1162 (5th ed. 2010). Specifically, for anissue to fall within an agency’s primary jurisdiction, theagency need not possess definite authority to resolve it; rather,there need only be “sufficient statutory support foradministrative authority . . . that the agency should at least berequested to . . . proceed[]” in the first instance. Ricci v.Chicago Mercantile Exch., 409 U.S. 289, 304, 300 (1973)(holding that a dispute fell within the Commodity ExchangeCommission’s primary jurisdiction where the CommodityExchange Act “at least arguably protected or prohibited” theconduct at issue). Given this standard, and given that then, asnow, the Commission claimed ancillary authority overComcast’s network management practices, the companycould plausibly argue in the California case (as it claims itdid) that deference to the Commission’s primary jurisdictionwas appropriate merely because the disputed practicesinvolved “communication by wire”—American Library’s firstrequirement. And as Comcast emphasized in the Californiacase, the Commission was already “actively investigating” thecompany’s network management practices, Comcast Cal.Mem. at 11, increasing the risk that the civil case coulddisrupt the regulatory process. See PIERCE, ADMINISTRATIVELAW TREATISE § 14.1, at 1162 (“[D]etermination of theagency’s primary jurisdiction involves a . . . pragmaticevaluation of the advantages and disadvantages of allowingthe agency to resolve an issue in the first instance.”).Therefore, the California court could have fairly concludedunder the primary jurisdiction doctrine that the Commissionshould determine in the first instance whether regulatingComcast’s network management practices would be“reasonably ancillary to the Commission’s effectiveperformance of its statutorily mandated responsibilities”—American Library’s second requirement. 406 F.3d at 692.Reinforcing Comcast’s interpretation, the Commissionitself generally uses “subject matter jurisdiction” to refer onlyto the first part of the American Library test rather than thetest as a whole. For example, in an earlier Internet-relatedorder (cited by Comcast in its California brief), theCommission wrote that it “may exercise its ancillaryjurisdiction when Title I of the Act gives the Commissionsubject matter jurisdiction over the service to be regulatedand the assertion of jurisdiction is reasonably ancillary to theeffective performance of its various responsibilities.” In reAppropriate Framework for Broadband Access to the InternetOver Wireline Facilities, 20 F.C.C.R. 14,853, 14,913–14,¶ 109 (2005) (emphasis added) (internal quotation marks andalteration omitted); accord In re Consumer Information andDisclosure, 24 F.C.C.R. 11,380, 11,400, ¶ 62 (2009); In re IPEnabledServices, 24 F.C.C.R. 6039, 6044–45, ¶ 9 (2009); Inre High-Cost Universal Service Support, 24 F.C.C.R. 6475,6540, ¶ 101 (2008).We thus do not interpret Comcast’s California argumentas “inconsistent” with its argument here, let alone “clearly”so. New Hampshire, 532 U.S. at 750 (internal quotationmarks omitted). Because Comcast never clearly argued in theCalifornia litigation that the Commission’s assertion ofauthority over the company’s network management practiceswould be “reasonably ancillary to the Commission’s effectiveperformance of its statutorily mandated responsibilities”(American Library’s second requirement), 406 F.3d at 692,that question remains for us to answer.B.The Commission’s second threshold argument is that theSupreme Court’s decision in Brand X “already decided thejurisdictional question here.” Resp’t’s Br. 20. In that case,the Court reviewed the Commission’s 2002 Cable ModemOrder, supra at 5–6, which removed cable Internet servicefrom Title II and Title VI oversight by classifying it as an“information service.” See Brand X, 545 U.S. at 978.Challenging that determination, Brand X argued that cableInternet actually comprises a bundle of two services: an“information service” not subject to Commission regulationand a “telecommunications service” subject to mandatoryTitle II regulation. Id. at 990–91. Brand X pressed thisargument because if Title II applied to cable Internet, then,under its view, cable companies would have to unbundle thecomponents of their Internet services, thus allowing Brand Xand other independent Internet service providers (ISPs) to usethe telecommunications component of those bundles to offercompeting Internet service over cable company wires. BrandX Resp’ts’ Br. at 10, Brand X, 545 U.S. 967 (No. 04-277)(“[I]f the telecommunications component of cable modemservice is a ‘telecommunications service,’ and hence commoncarriage, . . . [c]ustomers then will be able to choose theirprovider of Internet services.”).Although the Supreme Court acknowledged that cableInternet service does contain a telecommunications“component,” it deferred to the Commission’s determinationthat this component is “functionally integrated” into a single“offering” properly classified as an “information service.”545 U.S. at 991. Using language the Commission nowemphasizes, the Court went on to say that “the Commissionremains free to impose special regulatory duties on [cableInternet providers] under its Title I ancillary jurisdiction.” Id.at 996. In particular, the Court suggested that theCommission could likely “require cable companies to allowindependent ISPs access to their facilities” pursuant to itsancillary authority, rather than using Title II as Brand Xurged. Id. at 1002. According to the Commission, this meansthat “the FCC has authority over [information serviceproviders] under its Title I ancillary jurisdiction.” Resp’t’sBr. 20.Comcast insists that the references to ancillaryjurisdiction in Brand X are dicta: “Brand X presented thequestion whether the FCC had permissibly classified cableInternet services as ‘information services,’ not whether anyparticular regulation of such services was within the agency’sstatutory authority.” Pet’r’s Br. 53. Although Comcast maywell be correct, “carefully considered language of theSupreme Court, even if technically dictum, generally must betreated as authoritative.” United States v. Oakar, 111 F.3d146, 153 (D.C. Cir. 1997) (internal quotation marks andalteration omitted). In the end, however, we need not decidewhether the Court’s discussion of ancillary authority in BrandX qualifies as “authoritative,” for even if it does theCommission stretches the Court’s words too far. By leapingfrom Brand X’s observation that the Commission’s ancillaryauthority may allow it to impose some kinds of obligations oncable Internet providers to a claim of plenary authority oversuch providers, the Commission runs afoul of SouthwesternCable and Midwest Video I.In Southwestern Cable, in which the Court firstrecognized the Commission’s ancillary authority, it expresslyreserved for future cases the question whether particularregulations fall within that power. Although the Court upheldthe cable television order at issue, it declined “to determine indetail the limits of the Commission’s authority to regulateCATV.” 392 U.S. at 178. Then in Midwest Video I, theCourt made clear that the permissibility of each new exerciseof ancillary authority must be evaluated on its own terms.That is, the Court asked whether the particular regulation atissue was “reasonably ancillary to the effective performanceof the Commission’s various responsibilities for theregulation of television broadcasting.” 406 U.S. at 670(plurality opinion) (internal quotation marks omitted); seealso id. at 675 (Burger, C.J., concurring). Contrary to thekind of inference the Commission would have us draw fromBrand X, nothing in Midwest Video I even hints thatSouthwestern Cable’s recognition of ancillary authority overone aspect of cable television meant that the Commission hadplenary authority over all aspects of cable.We made just this point in National Ass’n of RegulatoryUtility Commissioners v. FCC, 533 F.2d 601 (D.C. Cir. 1976)(NARUC II). There we reviewed a series of Commissionorders that preempted state regulation of non-video uses ofcable systems, including precursors to modern cable modemservice. See id. at 616 (“[T]he point-to-point communications. . . involve one computer talking to another . . . .”). Leaningon its recent victories in Southwestern Cable and MidwestVideo I, the Commission argued—similar to the way it usesBrand X here—that the combined force of those two“affirmances of FCC powers over cable must be seen asestablishing a jurisdiction over all activities of cableoperators.” Id. at 611. We rejected that argument, explainingthat Southwestern Cable and Midwest Video I foreclosed theCommission’s broad view of ancillary authority. We pointedout that in Southwestern Cable the Court “stated explicitlythat its holding was limited to . . . reasonably ancillaryactivities, and expressly declined to comment on ‘theCommission’s authority, if any, to regulate CATV under anyother circumstances or for any other purposes.’” Id. at 612–13 (quoting Southwestern Cable, 392 U.S. at 178). Wesimilarly noted that in Midwest Video I the plurality “reliedexplicitly on the Southwestern reasoning, and devotedsubstantial attention to establishing the requisite‘ancillariness’ between the Commission’s authority overbroadcasting and the particular regulation before the Court.”Id. at 613. Neither case, we concluded, “recogniz[ed] anysweeping authority over [cable] as a whole.” Id. at 612.Instead, they “command[ed] that each and every assertion ofjurisdiction over cable television must be independentlyjustified as reasonably ancillary to the Commission’s powerover broadcasting.” Id. (emphasis added).Echoing this interpretation, the Supreme Court inMidwest Video II described Southwestern Cable “asconferring on the Commission a circumscribed range ofpower to regulate cable television,” a determination“reaffirmed” in Midwest Video I. 440 U.S. at 696. “Thequestion now before us,” the Court continued, “is whether the[Communications] Act, as construed in these two cases,authorizes the capacity and access regulations that are hereunder challenge.” Id. The Court ultimately concluded that itdid not, thus reinforcing the principle that the Commissionmust defend its exercise of ancillary authority on a case-bycasebasis.To be sure, Brand X dealt with the Internet, not cabletelevision. Nothing in Brand X, however, suggests that theCourt was abandoning the fundamental approach to ancillaryauthority set forth in Southwestern Cable, Midwest Video I,and Midwest Video II. Accordingly, the Commission cannotjustify regulating the network management practices of cableInternet providers simply by citing Brand X’s recognition thatit may have ancillary authority to require such providers tounbundle the components of their services. These arealtogether different regulatory requirements. Brand X nomore dictates the result of this case than Southwestern Cabledictated the results of Midwest Video I, NARUC II, andMidwest Video II. The Commission’s exercise of ancillaryauthority over Comcast’s network management practicesmust, to repeat, “be independently justified.” NARUC II, 533F.2d at 612. It is to that issue that we now turn.IV.The Commission argues that the Order satisfiesAmerican Library’s second requirement because it is“reasonably ancillary to the Commission’s effectiveperformance” of its responsibilities under several provisionsof the Communications Act. These provisions fall into twocategories: those that the parties agree set forth onlycongressional policy and those that at least arguably delegateregulatory authority to the Commission. We consider each inturn.A.The Commission relies principally on section 230(b), partof a provision entitled “Protection for private blocking andscreening of offensive material,” 47 U.S.C. § 230, that grantscivil immunity for such blocking to providers of interactivecomputer services, id. § 230(c)(2). Setting forth the policiesunderlying this protection, section 230(b) states, in relevantpart, that “[i]t is the policy of the United States . . . to promotethe continued development of the Internet and otherinteractive computer services” and “to encourage thedevelopment of technologies which maximize user controlover what information is received by individuals, families,and schools who use the Internet.” Id. § 230(b). In this casethe Commission found that Comcast’s network managementpractices frustrated both objectives. Order, 23 F.C.C.R. at13,052–53, ¶ 43.In addition to section 230(b), the Commission relies onsection 1, in which Congress set forth its reasons for creatingthe Commission in 1934: “For the purpose of regulatinginterstate and foreign commerce in communication by wireand radio so as to make available, so far as possible, to all thepeople of the United States . . . a rapid, efficient, Nation-wide,and world-wide wire and radio communication service . . . atreasonable charges, . . . there is created a commission to beknown as the ‘Federal Communications Commission’ . . . .”47 U.S.C. § 151. The Commission found that “prohibitingunreasonable network discrimination directly furthers the goalof making broadband Internet access service both ‘rapid’ and‘efficient.’” Order, 23 F.C.C.R. at 13,036–37, ¶ 16.Comcast argues that neither section 230(b) nor section 1can support the Commission’s exercise of ancillary authoritybecause the two provisions amount to nothing more thancongressional “statements of policy.” Pet’r’s Br. 46. Suchstatements, Comcast contends, “are not an operative part ofthe statute, and do not enlarge or confer powers onadministrative agencies. As such, they necessarily fail to setforth ‘statutorily mandated responsibilities’” within themeaning of American Library. Id. at 47 (citations, internalquotation marks, and alteration omitted).The Commission acknowledges that section 230(b) andsection 1 are statements of policy that themselves delegate noregulatory authority. Still, the Commission maintains that thetwo provisions, like all provisions of the CommunicationsAct, set forth “statutorily mandated responsibilities” that cananchor the exercise of ancillary authority. “The operativeprovisions of statutes are those which declare the legislativewill,” the Commission asserts. Resp’t’s Br. 39 (internalquotation marks and alteration omitted). “Here, thelegislative will has been declared by Congress in the form of apolicy, along with an express grant of authority to the FCC toperform all actions necessary to execute and enforce all theprovisions of the Communications Act.” Id.In support of its reliance on congressional statements ofpolicy, the Commission points out that in both SouthwesternCable and Midwest Video I the Supreme Court linked thechallenged Commission actions to the furtherance of variouscongressional “goals,” “objectives,” and “policies.” See, e.g.,Southwestern Cable, 392 U.S. at 175; Midwest Video I, 406U.S. at 665, 669 (plurality opinion). In particular, theCommission notes that in Midwest Video I, the pluralityaccepted its argument that the Commission’s “concern withCATV carriage of broadcast signals . . . extends . . . torequiring CATV affirmatively to further statutory policies.”406 U.S. at 664 (plurality opinion) (emphasis added) (internalquotation marks omitted). According to the Commission,since congressional statements of policy were sufficient tosupport ancillary authority over cable television, it maylikewise rely on such statements—section 230(b) andsection 1—to exercise ancillary authority over the networkmanagement practices of Internet providers.We read Southwestern Cable and Midwest Video I quitedifferently. In those cases, the Supreme Court relied onpolicy statements not because, standing alone, they set out“statutorily mandated responsibilities,” but rather becausethey did so in conjunction with an express delegation ofauthority to the Commission, i.e., Title III’s authority toregulate broadcasting. In Southwestern Cable, theCommission argued that restricting the geographic reach ofcable television was necessary to fulfill its Title IIIresponsibility to foster local broadcast service. The Courtagreed, explaining that “Congress has imposed upon theCommission the ‘obligation of providing a widely dispersedradio and television service,’ with a ‘fair, efficient, andequitable distribution’ of service among the ‘several Statesand communities.’ The Commission has, for this and otherpurposes, been granted authority to allocate broadcastingzones or areas, and to provide regulations ‘as it may deemnecessary’ to prevent interference among the variousstations.” 392 U.S. at 173–74 (citation and footnote omitted)(quoting S. REP. NO. 86-923, at 7 (1959), 47 U.S.C. § 307(b),303(f)). The Court concluded that “the Commission hasreasonably found that the successful performance of theseduties demands prompt and efficacious regulation ofcommunity antenna television systems.” Id. at 177.Nonetheless, the Court “emphasize[d] that the authority whichwe recognize today . . . is restricted to that reasonablyancillary to the effective performance of the Commission'svarious responsibilities for the regulation of televisionbroadcasting.” Id. at 178 (emphasis added).In Midwest Video I, the Court again made clear that itwas sustaining the challenged regulation—requiring cablecompanies to originate their own programming—onlybecause of its connection to the Commission’s Title IIIauthority over broadcasting. A four-Justice plurality agreedwith the Commission that the challenged rule would “furtherthe achievement of long-established regulatory goals in thefield of television broadcasting by increasing the number ofoutlets for community self-expression and augmenting thepublic’s choice of programs and types of services.” 406 U.S.at 667–68 (plurality opinion) (internal quotation marksomitted). Because the regulation “preserve[d] and enhance[d]the integrity of broadcast signals” it satisfied SouthwesternCable, i.e., it was “reasonably ancillary to the effectiveperformance of the Commission's various responsibilities forthe regulation of television broadcasting.” Id. at 670(emphasis added) (internal quotation marks omitted). ChiefJustice Burger made the same point in a controllingconcurring opinion: “CATV is dependent totally on broadcastsignals and is a significant link in the system as a whole andtherefore must be seen as within the jurisdiction of the Act.”Id. at 675 (Burger, C.J., concurring). That said, he warned,“candor requires acknowledgment . . . that the Commission’sposition strains the outer limits of” its authority. Id. at 676.The Commission exceeded those “outer limits” in bothNARUC II and Midwest Video II. In NARUC II, theCommission defended its exercise of ancillary authority overnon-video cable communications (as it does here with respectto Comcast’s network management practices) on the basis ofsection 1’s “overall statutory mandate to make available, sofar as possible, to all the people of the United States a rapid,efficient, [N]ation-wide, and world-wide wire and radiocommunications service.” 533 F.2d at 606 (internal quotationmarks and alteration omitted). The Commission “reasonedthat this language called for the development of a nationwidebroadband communications grid in which cable systemsshould play an important part.” Id. (internal quotation marksomitted). We rejected that argument. Relying onSouthwestern Cable and Midwest Video I, we began byexplaining that the Commission’s ancillary authority “is reallyincidental to, and contingent upon, specifically delegatedpowers under the Act.” Id. at 612 (emphasis added).Applying that standard, we found it “difficult to see how anyaction which the Commission might take concerning two-waycable communications could have as its primary impact thefurtherance of any broadcast purpose.” Id. at 615. Becausethe regulations had not been “justified as reasonably ancillaryto the Commission’s power over broadcasting,” id. at 612, wevacated them.In Midwest Video II, the Supreme Court rejected theCommission’s assertion of ancillary authority to impose apublic access requirement on certain cable channels becausedoing so would “relegate[] cable systems . . . to commoncarrierstatus.” 440 U.S. at 700–01. Pointing out that theCommunications Act expressly prohibits common carrierregulation of broadcasters, id. at 702, the Court held thatgiven the derivative nature of ancillary jurisdiction the sameprohibition applied to the Commission’s regulation of cableproviders. The Commission had opposed this logic, arguingthat it could regulate “so long as the rules promote statutoryobjectives.” Id. The Court rejected that broad claim and,revealing the flaw in the argument the Commission makeshere, emphasized that “without reference to the provisions ofthe Act directly governing broadcasting, the Commission's[ancillary] jurisdiction . . . would be unbounded.” Id. at 706(emphasis added). “Though afforded wide latitude in itssupervision over communication by wire,” the Court added,“the Commission was not delegated unrestrained authority.”Id.The teaching of Southwestern Cable, Midwest Video I,Midwest Video II, and NARUC II—that policy statementsalone cannot provide the basis for the Commission’s exerciseof ancillary authority—derives from the “axiomatic” principlethat “administrative agencies may [act] only pursuant toauthority delegated to them by Congress.” Am. Library, 406F.3d at 691. Policy statements are just that—statements ofpolicy. They are not delegations of regulatory authority. Tobe sure, statements of congressional policy can help delineatethe contours of statutory authority. Consider, for example, thevarious services over which the Commission enjoys expressstatutory authority. When exercising its Title II authority toset “just and reasonable” rates for phone service, 47 U.S.C.§ 201(b), or its Title III authority to grant broadcastinglicenses in the “public convenience, interest, or necessity,” id.§ 307(a), or its Title VI authority to prohibit “unfair methodsof competition” by cable operators that limit consumer accessto certain types of television programming, id. § 548(b), theCommission must bear in mind section 1’s objective of“Nation-wide . . . wire and radio communication service . . . atreasonable charges,” id. § 151. In all three examples, section1’s policy goal undoubtedly illuminates the scope of the“authority delegated to [the Commission] by Congress,” Am.Library, 406 F.3d at 691—though it is Titles II, III, and VIthat do the delegating. So too with respect to theCommission’s section 4(i) ancillary authority. Althoughpolicy statements may illuminate that authority, it is Title II,III, or VI to which the authority must ultimately be ancillary.In this case the Commission cites neither section 230(b)nor section 1 to shed light on any express statutory delegationof authority found in Title II, III, VI, or, for that matter,anywhere else. That is, unlike the way it successfullyemployed policy statements in Southwestern Cable andMidwest Video I, the Commission does not rely on section230(b) or section 1 to argue that its regulation of an activityover which it concededly has no express statutory authority(here Comcast’s Internet management practices) is necessaryto further its regulation of activities over which it does haveexpress statutory authority (here, for example, Comcast’smanagement of its Title VI cable services). In this respect,this case is just like NARUC II. On the record before us, wesee “no relationship whatever,” NARUC II, 533 F.2d at 616,between the Order and services subject to Commissionregulation. Perhaps the Commission could use section 230(b)or section 1 to demonstrate such a connection, but that is nothow it employs them here.Instead, the Commission maintains that congressionalpolicy by itself creates “statutorily mandated responsibilities”sufficient to support the exercise of section 4(i) ancillaryauthority. Not only is this argument flatly inconsistent withSouthwestern Cable, Midwest Video I, Midwest Video II, andNARUC II, but if accepted it would virtually free theCommission from its congressional tether. As the Courtexplained in Midwest Video II, “without reference to theprovisions of the Act” expressly granting regulatory authority,“the Commission’s [ancillary] jurisdiction . . . would beunbounded.” 440 U.S. at 706. Indeed, Commission counseltold us at oral argument that just as the Order seeks to makeComcast’s Internet service more “rapid” and “efficient,”Order, 23 F.C.C.R. 13,036–37, ¶ 16, the Commission couldsomeday subject Comcast’s Internet service to pervasive rateregulation to ensure that the company provides the service at“reasonable charges,” 47 U.S.C. § 151. Oral Arg. Tr. 58–59.Were we to accept that theory of ancillary authority, we seeno reason why the Commission would have to stop there, forwe can think of few examples of regulations that apply toTitle II common carrier services, Title III broadcast services,or Title VI cable services that the Commission, relying on thebroad policies articulated in section 230(b) and section 1,would be unable to impose upon Internet service providers. Ifin Midwest Video I the Commission “strain[ed] the outerlimits of even the open-ended and pervasive jurisdiction thathas evolved by decisions of the Commission and the courts,”406 U.S. at 676 (Burger, C.J., concurring), and if inNARUC II and Midwest Video II it exceeded those limits, thenhere it seeks to shatter them entirely.Attempting to avoid this conclusion, the Commissionargues that in several more recent cases we upheld its use ofancillary authority on the basis of policy statements alone. Ineach of those cases, however, we sustained the exercise ofancillary authority because, unlike here, the Commission hadlinked the cited policies to express delegations of regulatoryauthority.The Commission places particular emphasis on Computerand Communications Industry Ass’n v. FCC, 693 F.2d 198(D.C. Cir. 1982) (CCIA). There we considered a challenge tothe Commission’s landmark 1980 Computer II Order, inwhich the Commission set forth regulatory ground rules forcommon carriers that provided so-called enhanced services,i.e., precursors to modern information services like cableInternet. See In re Amend. of § 64.702 of the Comm’n’s Rulesand Regulations (Second Computer Inquiry), 77 F.C.C.2d384, 385–89, ¶¶ 1–13 (1980). The petitioners argued that twoaspects of the Computer II Order exceeded the Commission’sancillary authority. First, the Commission had ruled thatAT&T, then the monopoly telephone provider throughoutmost of the nation, could offer enhanced services onlythrough a separate subsidiary. CCIA, 693 F.2d at 205.Second, the Commission had mandated that all commoncarriers unbundle charges for “consumer premises equipment”(CPE)—i.e., telephones, computer terminals, and othersimilar devices—from their regulated tariffs. Id. Wesustained both requirements. Emphasizing, as we do here,that Southwestern Cable “limited the Commission’sjurisdiction to that which is reasonably ancillary to theeffective performance of the Commission’s variousresponsibilities,” we explained that “[o]ne of thoseresponsibilities is to assure a nationwide system of wirecommunications services at reasonable prices.” Id. at 213(internal quotation marks omitted). According to theCommission, this latter language demonstrates that section 1describes “statutorily mandated responsibilities.” But theCommission reads our statement out of context.The crux of our decision in CCIA was that in itsComputer II Order the Commission had linked its exercise ofancillary authority to its Title II responsibility over commoncarrier rates—just the kind of connection to statutoryauthority missing here. Thus, with respect to the AT&Tcomponent of the order, we relied on the Commission’sfinding that “[r]egulation of enhanced services was . . .necessary to prevent AT&T from burdening its basictransmission service customers with part of the cost ofproviding competitive enhanced services.” Id. “Given [the]potentially symbiotic relationship between competitive andmonopoly services,” we concluded that “the agency chargedwith ensuring that monopoly rates are just and reasonable canlegitimately exercise jurisdiction over the provision ofcompetitive services.” Id. We made the same point withrespect to the order’s CPE component: “[E]xercisingjurisdiction over CPE was necessary to carry out [theCommission’s] duty to assure the availability of transmissionservices at reasonable rates.” Id. So, when we wrote that“[o]ne of [the Commission’s] responsibilities is to assure anationwide system of wire communications services atreasonable prices,” id., we were using section 1’s language injust the way required by Southwestern Cable, MidwestVideo I, Midwest Video II, and NARUC II: for the light itsheds on the Commission’s Title II ratemaking power. Inother words, we viewed the Commission’s Computer IIOrder—like the Supreme Court had viewed the regulations atissue in Southwestern Cable—as regulation of servicesotherwise beyond the Commission’s authority in order toprevent frustration of a regulatory scheme expresslyauthorized by statute.The Commission’s reliance on Rural TelephoneCoalition v. FCC, 838 F.2d 1307 (D.C. Cir. 1988), fares nobetter. There we upheld the Commission’s creation of aUniversal Service Fund to provide subsidies for telephoneservice in rural and other high-cost areas. Again borrowingthe language of section 1, we held that “[a]s the UniversalService Fund was proposed in order to further the objective ofmaking communication service available to all Americans atreasonable charges, the proposal was within theCommission’s statutory authority.” Id. at 1315. Contrary tothe Commission’s argument, however, Rural Telephone, likeCCIA, rested not on section 1 alone, but on the fact thatcreation of the Universal Service Fund was ancillary to theCommission’s Title II responsibility to set reasonableinterstate telephone rates. True, as the Commission observes,our discussion of ancillary authority never cites Title II. Butany such citation would simply have restated the obviousgiven that the Commission established the Universal ServiceFund for the very purpose of “‘ensur[ing] that telephone ratesare within the means of the average subscriber in all areas ofthe country.’” Id. at 1311–12 (emphasis added) (quoting In re27Amend. of Pt. 67 of the Comm’n’s Rules and Establishment ofa Joint Bd., 96 F.C.C.2d 781, 795, ¶ 30 (1984)).Next the Commission cites New York State Commissionon Cable Television v. FCC, 749 F.2d 804 (D.C. Cir. 1984),in which we considered a challenge to a Commission orderpreempting state regulation of early satellite television.Because petitioner there never argued that the Commission’sexercise of ancillary authority lacked sufficient grounding inexpress statutory authority, New York State Commission didnot address the issue we now face. See id. at 808 (describingpetitioner’s challenge). Still, in sustaining the Commission’saction, we noted that “[i]n its preemption order theCommission based its authority over [satellite television]upon the federal interest in ‘the unfettered development ofinterstate transmission of satellite signals.’” Id. at 808(quoting In re Earth Satellite Commc’ns, Inc., 95 F.C.C.2d1223, 1230, ¶ 16 (1983)). According to the Commission, thislanguage demonstrates that ancillary authority may begrounded in policy alone. Not so. Our statement doesnothing more than clearly and accurately describe what theCommission actually did, i.e., supply a policy justification forits decision. Significantly for the issue before us here, theCommission’s preemption order also expressly linked itsexercise of ancillary authority over satellite television to itsTitle III authority over users of radio spectrum. TheCommission noted that the reception facilities that statessought to regulate (satellite dishes on hotel and apartmentbuilding roofs) “initially were subject to Commissionlicensing,” calling these receivers “absolutely essentialinstrumentalities of radio broadcasting.” Earth SatelliteCommc’ns, 95 F.C.C.2d at 1231, ¶ 17 (internal quotationmarks omitted). The Commission also cited section 303,which provides that “the Commission . . . as publicconvenience, interest, or necessity requires, shall . . .[c]lassify radio stations; . . . [p]rescribe the nature of theservice to be rendered by each class of licensed stations andeach station within any class; . . . [a]ssign bands offrequencies to the various classes of stations,” and so on. 47U.S.C. § 303. These express delegations of authority contrastsharply with the general policies set forth in section 230(b)and section 1.The Commission next relies on National Ass’n ofRegulatory Utility Commissioners v. FCC, 880 F.2d 422(D.C. Cir. 1989) (NARUC III), in which we considered achallenge to its decision to preempt state regulation of “insidewiring”—“telephone wires within a customer’s home or placeof business.” Id. at 425. The Commission had found insidewiring to be beyond the scope of its Title II regulation andsimultaneously preempted state regulation of such wiring.We held that the Commission had authority to issue thepreemption orders insofar as necessary “to encouragecompetition in the provision, installation, and maintenance ofinside wiring.” Id. at 429–30. Although we did “agree withthe FCC that this policy [was] consistent with the goals of theAct, and that it [had] the authority to implement this policywith respect to interstate communications,” id. (citationomitted), petitioners in that case had conceded that “insidewiring installation and maintenance . . . are integral totelephone communication,” id. at 427 (emphasis added)—afact critical to the Commission’s exercise of preemptionauthority. In its orders, the Commission had emphasized that“[o]ur prior preemption decisions have generally been limitedto activities that are closely related to the provision of servicesand which affect the provision of interstate services.” In reDetariffing the Installation and Maintenance of Inside Wiring,1 F.C.C.R. 1190, 1192, ¶ 17 (1986). The term “services”referred to “common carrier communication services” withinthe scope of the Commission’s Title II jurisdiction. Id. “Inshort,” the Commission explained, “the interstate telephonenetwork will not function as efficiently as possible without thepreemptive detariffing of inside wiring installation andmaintenance.” Id. (emphasis added). The Commission’spreemption of state regulation of inside wiring was thusancillary to its regulation of interstate phone service, preciselythe kind of link to express delegated authority that is absent inthis case.The Commission cites several additional cases, but nonesupport its expansive view of ancillary authority. Twodecisions, like the many we have already discussed, upheldthe Commission’s exercise of ancillary authority because,unlike here, the Commission had linked its action to astatutory delegation of regulatory authority. See UnitedVideo, Inc. v. FCC, 890 F.2d 1173, 1182–83 (D.C. Cir. 1989)(upholding rules that, like those upheld in SouthwesternCable, limited the ability of cable companies to importprogramming into a broadcaster’s market); GTE Serv. Corp.v. FCC, 474 F.2d 724, 729–30 (2d Cir. 1973) (upholdingCommission regulation of “data processing activities ofcommon carriers” based on the Commission’s concern “thatthe statutory obligation of the communication common carrierto provide adequate and reasonable services could beadversely affected”). In another case, we rejected theCommission’s argument, similar to the one it makes here, thatit could exercise ancillary authority on the basis of policyalone. Motion Picture Ass’n of Am. v. FCC, 309 F.3d 796,806–07 (D.C. Cir. 2002) (finding the Commission’s“argument that [its] video description rules are obviously avalid communications policy goal and in the public interest”insufficient to justify its exercise of ancillary authority(internal quotation marks omitted)). And in two decisions,ancillary authority was either never addressed, Nat’l Broad.Co. v. United States, 319 U.S. 190 (1943) (reviewing theCommission’s exercise of its express licensing power overbroadcasting stations under section 303, 47 U.S.C. § 303), oraddressed only in passing, AT&T Corp. v. Iowa Utils. Bd.,525 U.S. 366, 379–80 (1999) (mentioning the existence of theCommission’s ancillary authority in the course of interpretinganother provision of the Act).B.This brings us to the second category of statutoryprovisions the Commission relies on to support its exercise ofancillary authority. Unlike section 230(b) and section 1, eachof these provisions could at least arguably be read to delegateregulatory authority to the Commission.We begin with section 706 of the TelecommunicationsAct of 1996, which provides that “[t]he Commission . . . shallencourage the deployment on a reasonable and timely basis ofadvanced telecommunications capability to all Americans . . .by utilizing . . . price cap regulation, regulatory forbearance,measures that promote competition in the localtelecommunications market, or other regulating methods thatremove barriers to infrastructure investment.” 47 U.S.C.§ 1302(a). As the Commission points out, section 706 doescontain a direct mandate—the Commission “shall encourage. . . .” In an earlier, still-binding order, however, theCommission ruled that section 706 “does not constitute anindependent grant of authority.” In re Deployment ofWireline Servs. Offering Advanced Telecomms. Capability, 13F.C.C.R. 24,012, 24,047, ¶ 77 (1998) (Wireline DeploymentOrder). Instead, the Commission explained, section 706“directs the Commission to use the authority granted in otherprovisions . . . to encourage the deployment of advancedservices.” Id. at 24,045, ¶ 69.The Commission now insists that this language refersonly “to whether section 706(a) supported forbearanceauthority,” Resp’t’s Br. 41, i.e., the Commission’s authority tofree regulated entities from their statutory obligations incertain circumstances, see 47 U.S.C. § 160. According to theCommission, it “was not opining more generally on the effectof section 706 on ancillary authority.” Resp’t’s Br. 41. Butthe order itself says otherwise: “[S]ection 706(a) does notconstitute an independent grant of forbearance authority or ofauthority to employ other regulating methods.” WirelineDeployment Order, 13 F.C.C.R. at 24,044, ¶ 69 (emphasisadded). Because the Commission has never questioned, letalone overruled, that understanding of section 706, andbecause agencies “may not . . . depart from a prior policy subsilentio,” FCC v. Fox Television Stations, Inc., 129 S. Ct.1800, 1811 (2009), the Commission remains bound by itsearlier conclusion that section 706 grants no regulatoryauthority.Implying that this court has done what the Commissionhas not, the Commission points to a recent decision in whichwe wrote, “The general and generous phrasing of § 706means that the FCC possesses significant, albeit notunfettered, authority and discretion to settle on the bestregulatory or deregulatory approach to broadband.” Ad HocTelecomms. Users Comm. v. FCC, 572 F.3d 903, 906–07(D.C. Cir. 2009). In that case, however, we cited section 706merely to support the Commission’s choice betweenregulatory approaches clearly within its statutory authorityunder other sections of the Act, and upheld the Commission’srefusal to forbear from certain regulation of businessbroadband lines as neither arbitrary nor capricious. Nowheredid we question the Commission’s determination that section706 does not delegate any regulatory authority. TheCommission’s reliance on section 706 thus fails. As in thecase of section 230(b) and section 1, the Commission isseeking to use its ancillary authority to pursue a stand-alonepolicy objective, rather than to support its exercise of aspecifically delegated power.The Commission’s attempt to tether its assertion ofancillary authority to section 256 of the Communications Actsuffers from the same flaw. Section 256 directs theCommission to “establish procedures for . . . oversight ofcoordinated network planning . . . for the effective andefficient interconnection of public telecommunicationsnetworks.” 47 U.S.C. § 256(b)(1). In language unmentionedby the Commission, however, section 256 goes on to state that“[n]othing in this section shall be construed as expanding . . .any authority that the Commission” otherwise has under law,id. § 256(c)—precisely what the Commission seeks to dohere.The Commission next cites section 257. Enacted as partof the Telecommunications Act of 1996, that provision gavethe Commission fifteen months to “complete a proceeding forthe purpose of identifying and eliminating, by regulationspursuant to its authority under this chapter (other than thissection), market entry barriers for entrepreneurs and othersmall businesses in the provision and ownership oftelecommunications services and information services.” 47U.S.C. § 257(a). Although the section 257 proceeding is nowcomplete, that provision also directs the Commission to reportto Congress every three years on any remaining barriers. SeeIn re § 257 Proceeding to Identify and Eliminate Mkt. EntryBarriers for Small Bus., 12 F.C.C.R. 16,802 (1997)(completing original proceeding); 47 U.S.C. § 257(c)(requiring ongoing reports). We readily accept that certainassertions of Commission authority could be “reasonablyancillary” to the Commission’s statutory responsibility toissue a report to Congress. For example, the Commissionmight impose disclosure requirements on regulated entities inorder to gather data needed for such a report. But theCommission’s attempt to dictate the operation of an otherwiseunregulated service based on nothing more than its obligationto issue a report defies any plausible notion of “ancillariness.”See Motion Picture Ass’n of Am., 309 F.3d at 801–02 (holdingthat an order requiring that broadcasters incorporate “videodescriptions” into certain television programs fell outside theCommission’s ancillary authority even though it had beendirected to produce a report on the subject).Next the Commission argues that its exercise of authorityover Comcast’s network management practices is ancillary toits section 201 common carrier authority—though the section201 argument the Commission sets forth in its brief is verydifferent from the one appearing in the Order. As indicatedabove, section 201 provides that “[a]ll charges, practices,classifications, and regulations for and in connection with[common carrier] service shall be just and reasonable.” 47U.S.C. § 201(b). In the Order, the Commission found that byblocking certain traffic on Comcast’s Internet service, thecompany had effectively shifted the burden of that traffic toother service providers, some of which were operating theirInternet access services on a common carrier basis subject toTitle II. Order, 23 F.C.C.R. at 13,037–38, ¶ 17. Bymarginally increasing the variable costs of those providers,the Commission maintained, Comcast’s blocking of peer-topeertransmissions affected common carrier rates. Id.Whatever the merits of this position, the Commission hasforfeited it by failing to advance it here. See United States exrel. Totten v. Bombardier Corp., 380 F.3d 488, 497 (D.C. Cir.2004) (“Ordinarily, arguments that parties do not make onappeal are deemed to have been waived.”).Instead, the Commission now argues that voice overInternet Protocol (VoIP) services—in essence, telephoneservices using Internet technology—affect the prices andpractices of traditional telephony common carriers subject tosection 201 regulation. According to the Commission, someVoIP services were disrupted by Comcast’s networkmanagement practices. We have no need to examine thisclaim, however, for the Commission must defend its action onthe same grounds advanced in the Order. SEC v. CheneryCorp., 318 U.S. 80, 87–88 (1943).The same problem undercuts the Commission’s effort tolink its regulation of Comcast’s network managementpractices to its Title III authority over broadcasting. TheCommission contends that Internet video “has the potential toaffect the broadcast industry” by influencing “localorigination of programming, diversity of viewpoints, and thedesirability of providing service in certain markets.” Resp’t’sBr. 43. But the Commission cites no source for this argumentin the Order, nor can we find one.Finally, the Commission argues that the Order isancillary to its section 623 authority over cable rates. 47U.S.C. § 543. Although the Order never mentions section623, and although, as far as we can tell, no commentersuggested section 623 as a basis for the Commission’sexercise of ancillary authority, the Commission argues that itsreliance on this provision is implicit in its section 1 finding.That finding included the following explanation:[E]xercising jurisdiction over the complaint wouldpromote [section 1’s] goal of achieving “reasonablecharges.” For example, if cable companies such asComcast are barred from inhibiting consumer accessto high-definition on-line video content, then, asdiscussed above, consumers with cable modemservice will have available a source of videoprogramming (much of it free) that could rapidlybecome an alternative to cable television. Thecompetition provided by this alternative should resultin downward pressure on cable television prices,which have increased rapidly in recent years.Order, 23 F.C.C.R. at 13,037, ¶ 16. Laying the foundation forthis theory earlier in the Order, the Commission found that“video distribution poses a particular competitive threat toComcast’s video-on-demand (‘VOD’) service. VOD operatesmuch like online video, where Internet users can select anddownload or stream any available program without a scheduleand watch it any time . . . .” Id. at 13,030, ¶ 5 (internalquotation marks and alteration omitted).The Commission’s argument that we should read itsinvocation of section 1 as a reference to its section 623authority over cable rates fails because, unlike its Title IIauthority over common carrier rates, its section 623 authorityis sharply limited. Indeed, section 623 expressly prohibits theCommission from regulating rates for “video programmingoffered on a . . . per program basis,” i.e., video-on-demandservice. 47 U.S.C. § 543(l)(2), (a)(1). Although theCommission once enjoyed broader authority over cable rates,see id. § 543(c)(4), its current authority is limited to settingstandards for and overseeing local regulation of rates for“basic tier” service on certain cable systems. See id. § 543(b).In the Order, the Commission does not assert ancillaryauthority based on this narrow grant of regulatory power.Instead, the Order rests on the premise that section 1 gives theCommission ancillary authority to ensure reasonable rates forall communication services, including those, like video-ondemand,over which it has no express regulatory authority.As explained above, Southwestern Cable, Midwest Video I,Midwest Video II, and NARUC II bar this expansive theory ofancillary authority.V.It is true that “Congress gave the [Commission] broadand adaptable jurisdiction so that it can keep pace with rapidlyevolving communications technologies.” Resp’t’s Br. 19. Itis also true that “[t]he Internet is such a technology,” id.,indeed, “arguably the most important innovation incommunications in a generation,” id. at 30. Yetnotwithstanding the “difficult regulatory problem of rapidtechnological change” posed by the communications industry,“the allowance of wide latitude in the exercise of delegatedpowers is not the equivalent of untrammeled freedom toregulate activities over which the statute fails to confer . . .Commission authority.” NARUC II, 533 F.2d at 618 (internalquotation marks and footnote omitted). Because theCommission has failed to tie its assertion of ancillaryauthority over Comcast’s Internet service to any “statutorilymandated responsibility,” Am. Library, 406 F.3d at 692, wegrant the petition for review and vacate the Order.So ordered.


No comments (Add your own)

Add a New Comment


code
 

Comment Guidelines: No HTML is allowed. Off-topic or inappropriate comments will be edited or deleted. Thanks.