With 'Net Neutrality', FCC Moves Beyond Its Legal Authority

With the Federal Communications Commission (FCC) poised to act on Net Neutrality this week by adopting its controversial Open Internet rules, those who follow the Commission are turning their attention to the inevitable legal challenges soon to come. Contrary to the optimistic views of those who have been pushing for the adoption of these rules for the past decade, these rules face a bleak future in court. This is because they clearly exceed the intended scope of the Commission's statutory authority. While clever lawyers surely can argue that the words of the Communications Act have enough ambiguity to cover the Internet, the purpose and design of the Commission's rules clearly amount to a substantial expansion of the Commission's authority. The courts look at such overt expansions of authority with substantial skepticism.

Advocates of the Commission's efforts are confident the rules will be upheld, pointing to cases like Brand-X and Fox, cases that show how courts, in the event of an unclear law, generously defer to the agencies' determination of what the statutory language means. Commission supporters particularly draw comfort from Justice Scalia's dissent in Brand-X, which they interpret as saying that the Communications Act in fact requires the Commission to regulate Internet access as a so-called "telecommunications service." The Communications Act gives the FCC broad power to regulate telecommunications services, and if Internet access is such a service, the thinking goes, clearly this means that the FCC has broad authority to regulate Internet access.

By focusing on whether the Communications Act is unclear and whether the courts will therefore defer to the FCC's interpretation of the Act, these advocates miss the more fundamental question: whether the FCC is acting within the ambit of its statutory authority. Their basic mistake is that they view the Commission's efforts as a mere exercise in "statutory interpretation" - that is, an exercise to figure out what the words "telecommunications service" mean. But Chairman Wheeler and his followers are doing something quite different than mere interpretation: they are dramatically increasing the scope of the Commission's authority. The Open Internet order would throw out 20 years of policy that has consistently taken a hands-off approach to the Internet - a principle embraced by every Congress and Presidential administration since the 1996 Telecommunications Act. Until now, the FCC had faithfully followed the direction of these elected leaders.

The Communications Act gave the FCC power to regulate the phone network. As important as the phone network was, the Internet is something far more important. As Chairman Wheeler has repeatedly said at recent events, the Internet is "the most powerful network in the history of mankind." And as the FCC's initial notice of its proposed rules explained - literally in the first two sentences - "the Internet is America's most important platform for economic growth, innovation, competition, [and] free expression ... and has been ... the preeminent 21st century engine for innovation and the economic and social benefits that follow." The phone network was a useful and important tool; the Internet is the backbone of our modern economy.

Congress wrote the Communications Act and created the FCC to regulate the phone network. The FCC cannot use that authority to bootstrap its efforts to regulate the Internet. As Justice Scalia - in whom net neutrality advocates clearly expect to find support - recently reminded us, the courts "expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance." The Commission may have wide latitude to say what ambiguous words in the Communications Act mean, but those words can't mean whatever the Commission wants them to mean. The FCC needs to stay within the boundaries established by Congress.

Justice Scalia recently lamented that "Too many important decisions of the Federal Government are made nowadays by unelected agency officials exercising broad lawmaking authority, rather than by the people's representatives in Congress." It may be the case that rules are needed to address net neutrality. But such rules would need to originate in Congress. The Commission's approach is a massive expansion of the Commission's power into an area of vast economic and political significance. It is anything but mere "statutory interpretation" - and for this reason it is quite likely to face a rough road as it heads to court.