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Reversed

In re Formal Complaint of Free Press and Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to-Peer Applications, 23 F.C.C.R. 13028 (2008)

Derived From: Verizon v. FCC, No. 11-1355 (D.C. Cir. Jan. 14, 2014)

"Finding that Comcast’s impairment of these applications had “contravene[d] . . . federal policy,” id. at 13052 ¶ 43, the Commission ordered the company to adhere to a new approach for managing bandwidth demand and to disclose the details of that approach, id. at 13059–60 ¶ 54. The Commission justified its order as an exercise of what courts term its “ancillary jurisdiction,” see id. at 13034–41 ¶¶ 14–22, a power that flows from the broad language of Communications Act section 4(i). See 47 U.S.C. § 154(i) (“The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions.”); see generally American Library Ass’n v. FCC, 406 F.3d 689, 700–03 (D.C. Cir. 2005). We have held that the Commission may exercise such ancillary jurisdiction where two conditions are met: “(1) the Commission’s general jurisdictional grant under Title I covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.” American Library Ass’n, 406 F.3d at 691–92.

"In Comcast, we vacated the Commission’s order, holding that the agency failed to demonstrate that it possessed authority to regulate broadband providers’ network management practices. 600 F.3d at 644. Specifically, we held that the Commission had identified no grant of statutory authority to which the Comcast Order was reasonably ancillary. Id. at 661. The Commission had principally invoked statutory provisions that, though setting forth congressional policy, delegated no actual regulatory authority. Id. at 651–58. These provisions, we concluded, were insufficient because permitting the agency to ground its exercise of ancillary jurisdiction in policy statements alone would contravene the “‘axiomatic’ principle that ‘administrative agencies may [act] only pursuant to authority delegated to them by Congress.’” Id. at 654 (alteration in original) (quoting American Library Ass’n, 406 F.3d at 691). We went on to reject the Commission’s invocation of a handful of other statutory provisions that, although they could “arguably be read to delegate regulatory authority,” id. at 658, provided no support for the precise order at issue, id. at 658–61."

"While the Comcast matter was pending, the Commission sought comment on a set of proposed rules that, with some modifications, eventually became the rules at issue here. See In re Preserving the Open Internet, 24 F.C.C.R. 13064 (2009). In support, it relied on the same theory of ancillary jurisdiction it had asserted in the Comcast Order. See id. at 13099 ¶¶ 83–85. But after our decision in Comcast undermined that theory, the Commission sought comment on whether and to what extent it should reclassify broadband Internet services as telecommunications services. See In re Framework for Broadband Internet Service, 25 F.C.C.R. 7866, 7867 ¶ 2 (2010). Ultimately, however, rather than reclassifying broadband, the Commission adopted the Open Internet Order... See 25 F.C.C.R. 17905.

COMMISSION ORDERS COMCAST TO END DISCRIMINATORY NETWORK MANAGEMENT PRACTICES.  The Federal Communications Commission found that Comcast Corp.'s management of its broadband Internet networks contravenes federal policies that protect the vibrant and open nature of the Internet.  News Release. Adopted:  08/01/2008.
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Formal Complaint Of Free Press And Public Knowledge; Broadband Industry Practices.  FCC orders Comcast to end discriminatory network management practices. Affirms its authority to protect vibrant and open internet. (Dkt No.  07-52). Action by:  the Commission. Adopted:  08/01/2008 by MO&O. (FCC No. 08-183).  WCB
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"We seek clarification with respect to an apparent discrepancy between Comcast's filing and its actual or advertised practices. Specifically, in Appendix B of your September 19 submission, Comcast notes that if a consumer uses 70% of his provisioned bandwidth for 15 min or more when his neighborhood Cable Modem Termination System (CMTS) node has been near capacity for a period of 15 minutes or more, that consumer loses priority when routing packets thru congested portions of the network. If such a consumer then places a VoIP call along a route experiencing actual congestion, Comcast states that consumer may find that his "VoIP call sounds choppy." Critically, the Appendix draws no distinction between Comcast's VoIP offerings and those offered by its competitors

"Comcast's website, however, suggests that such a distinction does in fact exist. The website claims that "Comcast Digital Voice is a separate facilities-based IP phone service that is not affected by this (new network management) technique." It goes on to state, by contrast, that customers of other "VoIP providers that rely on delivering calls over the public Internet may experience a degradation of their call quality at times of network congestion."

"We request that Comcast explain why it omitted from its filings with the Commission the distinct effects that Comcast's new network management technique has on Comcast's VoIP offering versus those of its competitors. We also ask that you provide a detailed justification for Comcast's disparate treatment of its own VoIP service as compared to that offered by other VoIP providers on its network. In particular, please explain how Comcast Digital Voice is facilities-based," how Comcast Digital Voice uses Comcast's broadband facilities, and, in particular, whether (and if so, how) Comcast Digital Voice affects network congestion in a different manner than other VoIP services.

"To the extent that Comcast maintains that its VoIP offering is a telephone service offering transmission facilities for VoIP calls distinct from Comcast's broadband offerings, then it would appear that the fee Comcast assesses its customers for VoIP services pays in part for the privileged transmission of information of the customer's choosing across Comcast's network. As we have stated before, the "heart of telecommunications [under the act] is transmission." And offering "telecommunications for a fee directly to the public" is the statutory definition of a telecom service. Given that Comcast apparently is maintaining that its VoIP service is a "separate facilities-based" telephone service that is distinct from its broadband service and differs from the service offered by "VoIP providers that rely on delivering calls over the public Internet, it would appear that Comcast's VoIP service is a telecom service subject to regulation under Title II of the Communications Act of 1934, as amended.

"We thus request that Comcast explain any reason the Commission should not treat Comcast's VoIP offering as a telecom service under Title II - a service subject, among other things, to the same intercarrier compensation obligations applicable to other facilities-based telecom carriers. We understand that Comcast's VoIP service is not yet complying with such intercarrier compensation obligations.

"Please submit your response by the close of business on Friday, January 30, 2009. "

(Citations omitted)

"The Wireline Competition Bureau seeks comment on a petition filed by Free Press et al . (Petitioners), seeking a declaratory ruling "that the practice by broadband service providers of degrading peer-to-peer traffic violates the FCC's Internet Policy Statement " and that such practices do not meet the Commission's exception for reasonable network management. "

Free Press, Public Knowledge, Media Access Project, Consumer Federation of America, Consumers Union, Information Society Project at Yale Law School, Professor Charles Nesson, Co-Director of the Berkman Center for Internet & Society, Harvard Law School, Professor Barbara van Schewick, Center for Internet & Society, Stanford Law School, Petition for Declaratory Ruling, CC Docket Nos. 02-33, 01-337, 95-20, 98-10, GN Docket No. 00-185, CS Docket No. 02-52, WC Docket No. 07-52 (filed Nov. 1, 2007).

Letter from Professor Jack Balkin, Yale Law School and Professor Barbara van Schewick, Stanford Law School, to Marlene H. Dortch, Secretary of the Federal Communications Commission, Comment on Commission Order Requiring Comcast to End Discriminatory Network Management Practices (August 20, 2008).

Released: 01/14/2008. COMMENT SOUGHT ON PETITION FOR DECLARATORY RULING REGARDING INTERNET MANAGEMENT POLICIES. (DA No. 08-91). (Dkt No 07-52). Comments Due: 02/13/2008. Reply Comments Due: 02/28/2008. WCB. Contact: Jon Reel at 1580
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On November 14, 2007, Vuze, Inc. filed a Petition for Rulemaking requesting that the Commission initiate a rulemaking proceeding to clarify what constitutes "'reasonable network management,' by broadband network operators and to establish that such network management does not permit network operators to block, degrade or unreasonably discriminate against lawful Internet applications, content or technologies" as used in the Commission's Internet Policy Statement .

Vuze, Inc. Petition for Rulemaking to Establish Rules Governing Network Management Practices By Broadband Network Operators, WC Docket No. 07-52 (filed Nov. 14, 2007) (Petition).

Released: 01/14/2008. COMMENT SOUGHT ON PETITION FOR RULEMAKING TO ESTABLISH RULES GOVERNING NETWORK MANAGEMENT PRACTICES BY BROADBAND NETWORK OPERATORS. (DA No. 08-92). (Dkt No 07-52). Comments Due: 02/13/2008. Reply Comments Due: 02/28/2008. WCB.< http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-92A1.doc >< http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-92A1.pdf >< http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-08-92A1.txt >

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