The Federal Communication Commission’s efforts at regulating network neutrality suffered a set back at the hands of the U.S. Court of Appeals for the D.C. Circuit, which vacated the FCC’s Comcast Order for lack of jurisdiction. Comcast Corp. v. FCC, No. 08-1291, 2010 WL 1286658, at *1, 19 (D.C. Cir. April 6, 2010). In 2008, the FCC issued an order aimed at addressing complaints leveled at Comcast’s use of bandwidth throttling to limit the use of peer-to-peer networking applications, such as BitTorrent. In re Formal Compl. of Free Press & Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to-Peer Applications, 23 F.C.C.R. 13,028 (2008) (Comcast Order). Various public interest groups complained that Comcast’s conduct interfered with consumers’ right to access and use Internet content and applications of their choice and violated the FCC’s Internet Policy Statement. See In re Appropriate Framework for Broadband Access to the Internet Over Wireline Facilities, 20 F.C.C.R. 14,986 (2005). For its part, Comcast argued that its conduct was necessary to manage its limited network capacity against over consumption by peer-to-peer networking applications, and that the FCC’s Internet Policy Statement did not amount to a binding rule.
The FCC, asserting ancillary jurisdiction under the Communications Act of 1934, 47 U.S.C. § 154(i), determined that it could enforce its Internet Policy Statement through an adjudication. Comcast Order at 13,033-50, ¶¶ 12-40. The FCC then ruled that Comcast’s network management practices violated federal policy because they “significantly impeded consumers’ ability to access the content and use the applications of their choice” and were not the least restrictive means to manage network traffic. Id. at 13,054, ¶44 & 13,507 ¶49. Comcast complied with the Order, but petitioned for review with the D.C. Circuit.
On appeal, the D.C. Circuit reiterated that the FCC’s ancillary jurisdiction is limited to situations where the FCC’s general jurisdictional grant under Title I of the Communications Act covers the regulated subject, and the regulations at issue “are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.” Comcast Corp., 2010 WL 1286658, at *3, quoting American Library Ass’n v. FCC, 406 F.3d 689, 691-92 (D.C. Cir. 2005). The court rejected the FCC’s argument that the Supreme Court had already ruled that the FCC has ancillary jurisdiction to regulate cable Internet providers in National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005). The D.C. Circuit read Brand X to stand only for the proposition that the FCC may “impose some kinds of obligations on cable Internet providers,” such as a requirement to unbundle the components of their services, not that the FCC had “plenary authority over such providers.” Comcast Corp., 2010 WL 1286658, at *6.
Focusing on the second requirement for the exercise of ancillary jurisdiction, the court considered a litany of statutory provisions proffered by the FCC, and found that despite these provisions the FCC lacked a statutorily mandated responsibility. The court first rejected the FCC’s argument that statements of congressional policy found in sections 1 and 230(b) of the Communications Act rose to the level of a statutory mandated responsibility because they did not amount to a delegation of power to the FCC. Comcast Corp., 2010 WL 1286658, at *8-15. The court next rejected the FCC’s reliance on section 706 of the Telecommunications Act of 1996, 47 U.S.C. § 1302(a), which imposes a mandate on the FCC to encourage the deployment of telecommunications capability to all Americans, because the FCC had itself ruled that section 706 “does not constitute an independent grant of authority” but rather “directs the Commission to use the authority granted in other provisions . . . to encourage the deployment of advanced services.” Id. at *16, quoting In re Deployment of Wireline Servs. Offering Advanced Telecomms. Capability, 13 F.C.C.R. 24,012, 24,047, ¶ 77, 24,045, ¶ 69 (1998). The court then rejected the FCC’s reliance on sections 256 and 257 of the Communications Act because the former section expressly provides that “[n]othing in this section shall be construed as expanding . . . any authority that the Commission” has under law, 47 U.S.C. § 256(c), and the latter section only imposes a reporting obligation on the FCC – reliance on which the court found “defies any plausible notion of ‘ancillariness.’” Comcast Corp., 2010 WL 1286658, at *17. Finally, the court rejected a series of arguments made by the FCC under section 201, Title III and section 623 because the FCC had not relied on them in the issuance of its order. Id. at *18.
In sum, the court vacated the FCC’s Comcast Order because the FCC was “seeking to use its ancillary authority to pursue a stand-alone policy objective, rather than to support its exercise of a specifically delegated power.” Id. at *16. The Court did hold out a small hope that the FCC could pass some form of net neutrality regulation under Section 201 or Title III if the FCC properly articulates a connection between the regulation and those provisions. Absent a connection to an express statutory delegation of authority, however, the court held the FCC can not invoke ancillary jurisdiction to regulate the network management practices of Internet service providers.