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Today, the U.S. District Court of Appeals ruled against an enforcement action by the Federal Communications Commission against Comcast’s network management practices. The decision provides an important check on the FCC’s regulatory authority and may limit its ability to impose significant new regulations on the internet to promote “net neutrality.” Specifically, the court questioned the FCC’s assertion that it had the authority to regulate the network management practices of internet providers.
“This is a significant decision that could redefine the FCC’s regulatory regime over the internet and broadband technology,” said Wayne Brough, chief economist at FreedomWorks Foundation. “With the FCC moving forward with new regulations for an open internet, this decision could not be more timely. This court has made it clear—and this is not the first time—that the FCC cannot overstep the bounds that Congress provides. Innovation and broadband deployment rely critically on investments in new networks. Excessive regulation can thwart such investments to the detriment of consumers, while slowing technological advance. This decision keeps the FCC from claiming new regulatory authority without the approval of Congress.”
Earlier this year, FreedomWorks Foundation, along with several other free market organizations filed comments with the FCC on its Notice of Proposed Rulemaking on the open internet that emphasized the very point raised by the court of appeals. Our comments noted:
The NPRM nevertheless asserts such jurisdiction, primarily using the doctrine of ‘ancillary jurisdiction.’ This court-defined doctrine, itself to be found nowhere in the text of the Communications Act, holds that the Commission can in matters that fall within its general statutory grant of jurisdiction and are “necessary to ensure the achievement of the Commission’s statutory responsibilities.” The doctrine was originally employed to allow the Commission to regulate cable television retransmission of broadcast signals, and later used to justify a number of other actions, including pre-emption of state regulation of consumer premises equipment.
It is in itself a remarkable legal theory, allowing a regulatory agency to act in areas where there is no grant of authority, simply because it is related to an area in which authority has been granted. In a very real sense, it is a “horseshoes and hand grenades” doctrine, in which close is good enough to count.
“As the internet expands and matures it is important to avoid excessive new regulatory burdens that could hamper progress and deployment,” said Brough. “The FCC and other federal agencies already have ample authority to address and concerns that may arise on a case by case basis. There is no need for a massive new regulatory program that extends the FCC’s authority to new areas, and the court has made it clear that the agency cannot do so without the approval of Congress.”