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Notes: FCC Ancillary Jurisdiction

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- FCC
- FCC Jurisdiction
- - Ancillary Jurisdiction
- Personal Jurisdiction
- Admin Procedure Act

FCC Statutory Jurisdiction

Summary

The Communications Act of 1934 gives the Federal Communications Commission jurisdiction over interstate wireline and radio communications. For example, Title II of the Act gives the FCC jurisdiction over telecommunications services. Title III gives the FCC jurisdiction over wireless services.

But communications evolve, and by-and-by the FCC confronts a question not anticipated by the Communications Act. Nascent innovations storm the market and present policy issues prior to Congressional action. The classic example of this is the introduction of CableTV, placing a broadcast signal on a cable and bringing it over the mountain to a community that could not otherwise get reception. There was no Cable Act giving the Commission authority to act. Nevertheless, the FCC promulgated regulations which addressed the geographic footprints of cable TV networks. The Supreme Court upheld the FCC's exercise of jurisdiction, finding that it was reasonably ancillary to the agency's jurisdiction over broadcast TV.

The reach of the Commission's ancillary jurisdiction is not unbounded. While courts have recognized that the Communications Act grants the FCC broad authority, the Commission cannot use ancillary authority to justify anything. According to the courts,

"The Commission . . . may exercise ancillary jurisdiction only when two conditions are satisfied:

(1) the Commission's general jurisdictional grant under Title I [of the Communications Act] covers the regulated subject and

(2) the regulations are reasonably ancillary to the Commission's effective performance of its statutorily mandated responsibilities."

It has to be interstate communications and it has to be ancillary to something (ancillary to a mere policy statement is insufficient). The FCC exercising jurisdiction over cable TV as ancillary to its Broadcast TV authority - sure, that is sound. But the courts, expressing anxiety that the FCC has no more authority than that which Congress grants it, gets jittering on the boundary of clearly articulated expressions of authority. The further astray the FCC acts from expressed statutory authority, the more anxiety is expressed by the courts. Where it is clear that the FCC is filling in gaps not anticipated by Congress, and which fulfill its mandate for promoting interstate communications, the Courts have tended towards affirming that authority. Where the FCC strains to tie its actions to expressed authority, however, the courts have stated that ancillary jurisdiction is not "unbounded."

Ancillary Jurisdiction
No Ancillary Jurisdiction
  • CableTV: regulation of geographic footprint of cable TV service ancillary to jurisdiction over broadcast TV
  • CableTV: cable TV requirement of creation of original programming ancillary to jurisdiction over broadcast TV
  • Enhanced Service Providers (Internet): Computer Inquiries safeguards ancillary to jurisdiction over telecom service
  • Universal Service: creation of universal service fund ancillary to title II authority to set reasonable interstate telephone rates
  • CableTV: regulations that required cable systems to make certain channels available for public use not ancillary to broadcast TV authority
  • Broadcast Flag: jurisdiction over broadcast flag to protect copyright is post-transmission and not ancillary to FCC authority
  • Broadband Internet Access Service: jurisdiction over BIAS cannot be ancillary to a policy statement

Statute

"The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions." 47 USC 154(i)

Two Part Test

We recently distilled the holdings of these three cases into a two-part test. In American Library Ass'n v. FCC, we wrote: "The Commission . . . may exercise ancillary jurisdiction only when two conditions are satisfied:

(1) the Commission's general jurisdictional grant under Title I [of the Communications Act] covers the regulated subject and

(2) the regulations are reasonably ancillary to the Commission's effective performance of its statutorily mandated responsibilities."

406 F.3d at 691-92; see also Order, 23 F.C.C.R. at 13,035, ¶ 15 n.64 (citing the American Library test). -- Comcast v FCC, No. 08-1291, Slip pp 6-8 (DC Cir. April 6, 2010)


Verizon v. FCC, Slip at 12, 2014 (citing American Library Ass’n, 406 F.3d at 691–92. )


The Commission recognized that it may exercise ancillary jurisdiction only when two conditions are satisfied: (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. See 18 FCCR. at 23,563. -- ALA v. FCC, No. 04-1037, slip at 4 (DC Cir. May 6, 2005)


"Although somewhat amorphous, ancillary jurisdiction is nonetheless constrained. In order for the Commission to regulate under its ancillary jurisdiction, two conditions must be met. First, the subject of the regulation must be covered by the Commission’s general grant of jurisdiction under Title I of the Communications Act, which, as noted above, encompasses “‘all interstate and foreign communication by wire or radio.’” United States v. Southwestern Cable Co., 392 U.S. 157, 167 (1968) (quoting 47 U.S.C. § 152(a)). Second, the subject of the regulation must be “reasonably ancillary to the effective performance of the Commission’s various responsibilities.” Id. at 178. " -- ALA v. FCC, No. 04-1037, slip at 5-6 (DC Cir. May 6, 2005)

Case by Case Analysis (not unbounded)

The Commission's second threshold argument is that the Supreme Court's decision in Brand X "already decided the jurisdictional question here." Resp't's Br. 20. In that case, the Court reviewed the Commission's 2002 Cable Modem Order, supra at 5-6, which removed cable Internet service from 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 cable Internet actually comprises a bundle of two services: an "information service" not subject to Commission regulation and a "telecommunications service" subject to mandatory Title II regulation. Id. at 990-91. Brand X pressed this argument because if Title II applied to cable Internet, then, under its view, cable companies would have to unbundle the components of their Internet services, thus allowing Brand X and other independent Internet service providers (ISPs) to use the telecommunications component of those bundles to offer competing Internet service over cable company wires. Brand X Resp'ts' Br. at 10, Brand X, 545 U.S. 967 (No. 04-277) ("[I]f the telecommunications component of cable modem service is a 'telecommunications service,' and hence common carriage, . . . [c]ustomers then will be able to choose their provider of Internet services.").

Although the Supreme Court acknowledged that cable Internet service does contain a telecommunications "component," it deferred to the Commission's determination that this component is "functionally integrated" into a single "offering" properly classified as an "information service." 545 U.S. at 991. Using language the Commission now emphasizes, the Court went on to say that "the Commission remains free to impose special regulatory duties on [cable Internet providers] under its Title I ancillary jurisdiction." Id. at 996. In particular, the Court suggested that the Commission could likely "require cable companies to allow independent ISPs access to their facilities" pursuant to its ancillary authority, rather than using Title II as Brand X urged. Id. at 1002. According to the Commission, this means that "the FCC has authority over [information service providers] under its Title I ancillary jurisdiction." Resp't's Br. 20.

Comcast insists that the references to ancillary jurisdiction in Brand X are dicta: "Brand X presented the question whether the FCC had permissibly classified cable Internet services as 'information services,' not whether any particular regulation of such services was within the agency's statutory authority." Pet'r's Br. 53. Although Comcast may well be correct, "carefully considered language of the Supreme Court, even if technically dictum, generally must be treated as authoritative." United States v. Oakar, 111 F.3d 146, 153 (D.C. Cir. 1997) (internal quotation marks and alteration omitted). In the end, however, we need not decide whether the Court's discussion of ancillary authority in Brand X qualifies as "authoritative," for even if it does the Commission stretches the Court's words too far. By leaping from Brand X's observation that the Commission's ancillary authority may allow it to impose some kinds of obligations on cable Internet providers to a claim of plenary authority over such providers, the Commission runs afoul of Southwestern Cable and Midwest Video I.

In Southwestern Cable, in which the Court first recognized the Commission's ancillary authority, it expressly reserved for future cases the question whether particular regulations fall within that power. Although the Court upheld the cable television order at issue, it declined "to determine in detail the limits of the Commission's authority to regulate CATV." 392 U.S. at 178. Then in Midwest Video I, the Court made clear that the permissibility of each new exercise of ancillary authority must be evaluated on its own terms. That is, the Court asked whether the particular regulation at issue was "reasonably ancillary to the effective performance of the Commission's various responsibilities for the regulation of television broadcasting." 406 U.S. at 670 (plurality opinion) (internal quotation marks omitted); see also id. at 675 (Burger, C.J., concurring). Contrary to the kind of inference the Commission would have us draw from Brand X, nothing in Midwest Video I even hints that Southwestern Cable's recognition of ancillary authority over one aspect of cable television meant that the Commission had plenary authority over all aspects of cable.

-- Comcast v FCC, No. 08-1291, Slip p 13-14 (DC Cir. April 6, 2010)

Part One :: General Jurisdiction

The Commission’s general jurisdictional grant under Title I plainly encompasses the regulation of apparatus that can receive television broadcast content, but only while those apparatus are engaged in the process of receiving a television broadcast. Title I does not authorize the Commission to regulate receiver apparatus after a transmission is complete. As a result, the FCC’s purported exercise of ancillary authority founders on the first condition. There is no statutory foundation for the broadcast flag rules, and consequently the rules are ancillary to nothing. Therefore, we hold that the Commission acted outside the scope of its delegated authority when it adopted the disputed broadcast flag regulations. ALA v. FCC, No. 04-1037, slip at 4 (DC Cir. May 6, 2005)


"The insurmountable hurdle facing the FCC in this case is that the agency’s general jurisdictional grant does not encompass the regulation of consumer electronics products that can be used for receipt of wire or radio communication when those devices are not engaged in the process of radio or wire transmission. Because the Flag Order does not require demodulator products to give effect to the broadcast flag until after the DTV broadcast has been completed, the regulations adopted in the Flag Order do not fall within the scope of the Commission’s general jurisdictional grant. Therefore, the Commission cannot satisfy the first precondition to its assertion of ancillary jurisdiction." -- ALA v. FCC, No. 04-1037, slip at 19 (DC Cir. May 6, 2005)


First, it was beyond doubt that CATV systems involved interstate “‘communication by wire or radio,’” id. at 168 (quoting 47 U.S.C. § 152(a)), and, thus, were covered by Title I’s general jurisdictional grant. " -- ALA v. FCC, No. 04-1037, slip at 20 (DC Cir. May 6, 2005)

Part Two :: Reasonably Ancillary

Second, the Court concluded that at least some level of CATV regulation was “reasonably ancillary to the effective performance of the Commission’s various responsibilities [delegated to it by Congress] for the regulation of television broadcasting.” Id. at 178. -- ALA v. FCC, No. 04-1037, slip at 20 (DC Cir. May 6, 2005)


"We think that the Supreme Court’s cautionary approach in applying the second prong of the ancillary jurisdiction test suggests that we should be at least as cautious in this case. Great caution is warranted here, because the disputed broadcast flag regulations rest on no apparent statutory foundation and, thus, appear to be ancillary to nothing. Just as the Supreme Court refused to countenance an interpretation of the second prong of the ancillary jurisdiction test that would confer “unbounded” jurisdiction on the Commission, Midwest Video II, 440 U.S. at 706, we will not construe the first prong in a manner that imposes no meaningful limits on the scope of the FCC’s general jurisdictional grant. "

"In light of the parameters of the Commission’s ancillary jurisdiction established by Southwestern Cable, Midwest Video I, and Midwest Video II, this case turns on one simple fact: the Flag Order does not require demodulator products to give effect to the broadcast flag until after the DTV broadcast is complete. The Flag Order does not regulate the actual transmission of the DTV broadcast. In other words, the Flag Order imposes regulations on devices that receive communications after those communications have occurred; it does not regulate the communications themselves. Because the demodulator products are not engaged in “communication by wire or radio” when they are subject to regulation under the Flag Order, the Commission plainly exceeded the scope of its general jurisdictional grant under Title I in this case." -- ALA v. FCC, No. 04-1037, slip at 24-25 (DC Cir. May 6, 2005)

Part Two :: Reasonably Ancillary :: Policy Statements Dont Count

"The Commission relies principally on section 230(b), part of a provision entitled “Protection for private blocking and screening of offensive material,” 47 U.S.C. § 230, that grants civil immunity for such blocking to providers of interactive computer services, id. § 230(c)(2). Setting forth the policies underlying this protection, section 230(b) states, in relevant part, that “[i]t is the policy of the United States . . . to promote the continued development of the Internet and other interactive computer services” and “to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the Internet.” Id. § 230(b). In this case the Commission found that Comcast’s network management practices frustrated both objectives. Order, 23 F.C.C.R. at 13,052–53, ¶ 43.

In addition to section 230(b), the Commission relies on section 1, in which Congress set forth its reasons for creating the Commission in 1934: “For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States . . . a rapid, efficient, Nation-wide, and world-wide wire and radio communication service . . . at reasonable charges, . . . there is created a commission to be known as the ‘Federal Communications Commission’ . . . .” 47 U.S.C. § 151. The Commission found that “prohibiting unreasonable network discrimination directly furthers the goal of making broadband Internet access service both ‘rapid’ and ‘efficient.’” Order, 23 F.C.C.R. at 13,036–37, ¶ 16.

.....

We read Southwestern Cable and Midwest Video I quite differently. In those cases, the Supreme Court relied on policy statements not because, standing alone, they set out “statutorily mandated responsibilities,” but rather because they did so in conjunction with an express delegation of authority to the Commission, i.e., Title III’s authority to regulate broadcasting.

. . . . .

The teaching of Southwestern Cable, Midwest Video I, Midwest Video II, and NARUC II—that policy statements alone cannot provide the basis for the Commission’s exercise of ancillary authority—derives from the “axiomatic” principle that “administrative agencies may [act] only pursuant to authority delegated to them by Congress.” Am. Library, 406 F.3d at 691. Policy statements are just that—statements of policy. They are not delegations of regulatory authority. To be sure, statements of congressional policy can help delineate the contours of statutory authority. Consider, for example, the various services over which the Commission enjoys express statutory authority. When exercising its Title II authority to set “just and reasonable” rates for phone service, 47 U.S.C. §201(b), or its Title III authority to grant broadcasting licenses in the “public convenience, interest, or necessity,” id. § 307(a), or its Title VI authority to prohibit “unfair methods of competition” by cable operators that limit consumer access to certain types of television programming, id. § 548(b), the Commission must bear in mind section 1’s objective of “Nation-wide . . . wire and radio communication service . . . at reasonable charges,” id. § 151. In all three examples, section 1’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 VI that do the delegating. So too with respect to the Commission’s section 4(i) ancillary authority. Although policy 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 delegation of authority found in Title II, III, VI, or, for that matter, anywhere else. That is, unlike the way it successfully employed policy statements in Southwestern Cable and Midwest Video I, the Commission does not rely on section 230(b) or section 1 to argue that its regulation of an activity over which it concededly has no express statutory authority (here Comcast’s Internet management practices) is necessary to further its regulation of activities over which it does have express statutory authority (here, for example, Comcast’s management of its Title VI cable services). In this respect, this case is just like NARUC II. On the record before us, we see “no relationship whatever,” NARUC II, 533 F.2d at 616, between the Order and services subject to Commission regulation. Perhaps the Commission could use section 230(b) or section 1 to demonstrate such a connection, but that is not how it employs them here.

Instead, the Commission maintains that congressional policy by itself creates “statutorily mandated responsibilities” sufficient to support the exercise of section 4(i) ancillary authority. Not only is this argument flatly inconsistent with Southwestern Cable, Midwest Video I, Midwest Video II, and NARUC II, but if accepted it would virtually free the Commission from its congressional tether. As the Court explained in Midwest Video II, “without reference to the provisions of the Act” expressly granting regulatory authority, “the Commission’s [ancillary] jurisdiction . . . would be unbounded.” 440 U.S. at 706. Indeed, Commission counsel told us at oral argument that just as the Order seeks to make Comcast’s Internet service more “rapid” and “efficient,” Order, 23 F.C.C.R. 13,036–37, ¶ 16, the Commission could someday subject Comcast’s Internet service to pervasive rate regulation 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 see no reason why the Commission would have to stop there, for we can think of few examples of regulations that apply to Title II common carrier services, Title III broadcast services, or Title VI cable services that the Commission, relying on the broad policies articulated in section 230(b) and section 1, would be unable to impose upon Internet service providers. If in Midwest Video I the Commission “strain[ed] the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the Commission and the courts,” 406 U.S. at 676 (Burger, C.J., concurring), and if in NARUC II and Midwest Video II it exceeded those limits, then here it seeks to shatter them entirely.

-- Comcast v FCC, No. 08-1291, Slip at 17-30 (DC Cir. April 6, 2010)

Historic Findings

Cable TV

United States v. Southwestern Cable Co., 392 U.S. 157 (1968)

The FCC has "authority to promulgate regulations to effectuate the goals and accompanying provisions of the Act in the absence of explicit regulatory authority, if the regulations are reasonably ancillary to existing Commission statutory authority." -- United States v. Southwestern Cable Co., 392 U.S. 157, 178 (1968).


"In the first case, Southwestern Cable, the Supreme Court considered a challenge to a Commission order restricting the geographic area in which a cable company could operate. 392 U.S. at 160. At that time, cable television, then known as “community antenna television” (CATV), functioned quite differently than it does today. Employing strategically located antennae, these early cable systems simply received over-the-air television broadcasts and retransmitted them by cable to their subscribers. Id. at 161–62. Although they rarely produced their own programming, they improved reception and allowed subscribers to receive television programs from distant stations. Id. at 162–63. Seeking to protect Commission-licensed local broadcasters, the Commission adopted rules limiting the extent to which cable systems could retransmit distant signals and, in the order at issue in Southwestern Cable, applied this policy to a particular company. The Supreme Court sustained that order, explaining that even though the then-existing Communications Act gave the Commission no express authority over cable television, the Commission could nonetheless regulate cable television to the extent “reasonably ancillary to the effective performance of the Commission’s various responsibilities for the regulation of television broadcasting.” Id. at 178." --  Verizon v FCC, Slip at 6-7 DC Cir. 2010


"In Southwestern Cable, the Supreme Court recognized that the Communications Act confers a sphere of ancillary jurisdiction on the FCC. See 392 U.S. at 177-78. The principal question presented was whether the FCC had the authority to regulate cable television systems (“CATV”), absent any express congressional grant of authority to the FCC to regulate in this area. See id. at 164-67. The Court’s conclusion that the FCC did have such authority rested on two factors. First, it was beyond doubt that CATV systems involved interstate “‘communication by wire or radio,’” id. at 168 (quoting 47 U.S.C. § 152(a)), and, thus, were covered by Title I’s general jurisdictional grant. Second, the Court concluded that at least some level of CATV regulation was “reasonably ancillary to the effective performance of the Commission’s various responsibilities [delegated to it by Congress] for the regulation of television broadcasting.” Id. at 178. Because these two conditions were satisfied, the Court held that, to the degree it was in fact reasonably ancillary to the Commission’s responsibilities over broadcast, the FCC had the power to regulate cable television as “‘public convenience, interest or necessity requires,’” so long as the regulations were “‘not inconsistent with law.’” Id. (quoting 47 U.S.C. § 303(r)). " -- ALA v. FCC, No. 04-1037, slip at 20 (DC Cir. May 6, 2005)

Midwest Video I

United States v. Midwest Video Corp., 406 U.S. 649 (1972) (Midwest Video I)


Verizon v FCC, Slip at 7 DC Cir. 2010 ("sustained the Commission’s use of its ancillary authority, this time to support issuance of a regulation that required cable operators to facilitate the creation of new programs and to transmit them alongside broadcast programs they captured from the air. 406 U.S. at 670.")


In Midwest Video I, the Court again made clear that it was sustaining the challenged regulation—requiring cable companies to originate their own programming—only because of its connection to the Commission’s Title III authority over broadcasting. A four-Justice plurality agreed with the Commission that the challenged rule would “further the achievement of long-established regulatory goals in the field of television broadcasting by increasing the number of outlets for community self-expression and augmenting the public’s choice of programs and types of services.” 406 U.S. at 667–68 (plurality opinion) (internal quotation marks omitted). Because the regulation “preserve[d] and enhance[d] the integrity of broadcast signals” it satisfied Southwestern Cable, i.e., it was “reasonably ancillary to the effective performance of the Commission's various responsibilities for the regulation of television broadcasting.” Id. at 670 (emphasis added) (internal quotation marks omitted). Chief Justice Burger made the same point in a controlling concurring opinion: “CATV is dependent totally on broadcast signals and is a significant link in the system as a whole and therefore 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’s position strains the outer limits of” its authority. Id. at 676. -- Comcast v FCC, No. 08-1291, Slip at 20 (DC Cir. April 6, 2010)


"a rule adopted by the FCC providing that no CATV system with 3,500 or more subscribers could carry the signal of any television broadcast station unless the system distributed programming that had originated from a source other than the broadcast signals and the system had facilities for local program production. See Midwest Video I, 406 U.S. at 653-54 & n.6. The regulation was designed to increase the number of outlets for community self-expression and the programming choices available to the public. See id. at 654. "

"A closely divided Court held that the Commission’s rule was a valid exercise of its ancillary jurisdiction. In an opinion by Justice Brennan, a plurality of the Court began its analysis by recognizing the two requirements for the Commission’s exercise of ancillary jurisdiction: (1) that the regulation must cover interstate or foreign communication by wire or radio and (2) that the regulation must be reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities. See id. at 662-63. The parties before the Court in Midwest Video I did not dispute that the first precondition was met. See id. at 662. Furthermore, the plurality concluded that the regulation was reasonably ancillary to the Commission’s responsibilities for the regulation of broadcast television, because the Commission reasonably concluded that the rule would “‘further the achievement of long-established regulatory goals in the field of television broadcasting by increasing the number of outlets for community self-expression and augmenting the public’s choice of programs and types of services.’” Id. at 667-68 (quoting Commission report accompanying the disputed regulation)."

"Chief Justice Burger provided the fifth vote to sustain the regulation at issue in Midwest Video I, but he concurred only in the judgment. Chief Justice Burger agreed that, in light of the “pervasive powers” conferred upon the Commission and its “generations of experience,” the Court should sustain the Commission’s authority to impose the regulation at issue. Id. at 676 (Burger, C.J., concurring in the result). Nonetheless, he noted: “Candor requires acknowledgment, for me at least, that the Commission’s position strains the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the Commission and the courts.” Id. " -- ALA v. FCC, No. 04-1037, slip at 21-22 (DC Cir. May 6, 2005)

NARUC II

"The Commission exceeded those “outer limits” in both NARUC II and Midwest Video II. In NARUC II, the Commission defended its exercise of ancillary authority over non-video cable communications (as it does here with respect to Comcast’s network management practices) on the basis of section 1’s “overall statutory mandate to make available, so far as possible, to all the people of the United States a rapid, efficient, [N]ation-wide, and world-wide wire and radio communications service.” 533 F.2d at 606 (internal quotation marks and alteration omitted). The Commission “reasoned that this language called for the development of a nationwide broadband communications grid in which cable systems should play an important part.” Id. (internal quotation marks omitted). We rejected that argument. Relying on Southwestern Cable and Midwest Video I, we began by explaining that the Commission’s ancillary authority “is really incidental to, and contingent upon, specifically delegated powers under the Act.” Id. at 612 (emphasis added). Applying that standard, we found it “difficult to see how any action which the Commission might take concerning two-way cable communications could have as its primary impact the furtherance of any broadcast purpose.” Id. at 615. Because the regulations had not been “justified as reasonably ancillary to the Commission’s power over broadcasting,” id. at 612, we vacated them." -- Comcast v FCC, No. 08-1291, Slip at 20 (DC Cir. April 6, 2010)

Midwest Video II

Other Cases

Enhanced Services (aka Information Services) (aka Internet over telecom service)

Ancillary Jurisdiction : Information Service :: Supreme Court

Information-service providers, by contrast, are not subject to mandatory common-carrier regulation under Title II, though the Commission has jurisdiction to impose additional regulatory obligations under its Title I ancillary jurisdiction to regulate interstate and foreign communications, see §§151–161. - NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 4 (S.Ct. June 27, 2005)

Ancillary Jurisdiction :: Information Service :: Appellate Court

The Commission places particular emphasis on Computer and Communications Industry Ass’n v. FCC, 693 F.2d 198 (D.C. Cir. 1982) (CCIA). There we considered a challenge to the Commission’s landmark 1980 Computer II Order, in which the Commission set forth regulatory ground rules for common carriers that provided so-called enhanced services, i.e., precursors to modern information services like cable Internet. See In re Amend. of § 64.702 of the Comm’n’s Rules and Regulations (Second Computer Inquiry), 77 F.C.C.2d 384, 385–89, ¶¶ 1–13 (1980). The petitioners argued that two aspects of the Computer II Order exceeded the Commission’s ancillary authority. First, the Commission had ruled that AT&T, then the monopoly telephone provider throughout most of the nation, could offer enhanced services only through a separate subsidiary. CCIA, 693 F.2d at 205.

Second, the Commission had mandated that all common carriers unbundle charges for “consumer premises equipment” (CPE)—i.e., telephones, computer terminals, and other similar devices—from their regulated tariffs. Id. We sustained both requirements. Emphasizing, as we do here, that Southwestern Cable “limited the Commission’s jurisdiction to that which is reasonably ancillary to the effective performance of the Commission’s various responsibilities,” we explained that “[o]ne of those responsibilities is to assure a nationwide system of wire communications services at reasonable prices.” Id. at 213 (internal quotation marks omitted). According to the Commission, this latter language demonstrates that section 1 describes “statutorily mandated responsibilities.” But the Commission reads our statement out of context.

The crux of our decision in CCIA was that in its Computer II Order the Commission had linked its exercise of ancillary authority to its Title II responsibility over common carrier rates—just the kind of connection to statutory authority missing here. Thus, with respect to the AT&T component of the order, we relied on the Commission’s finding that “[r]egulation of enhanced services was . . . necessary to prevent AT&T from burdening its basic transmission service customers with part of the cost of providing competitive enhanced services.” Id. “Given [the] potentially symbiotic relationship between competitive and monopoly services,” we concluded that “the agency charged with ensuring that monopoly rates are just and reasonable can legitimately exercise jurisdiction over the provision of competitive services.” Id. We made the same point with respect to the order’s CPE component: “[E]xercising jurisdiction over CPE was necessary to carry out [the Commission’s] duty to assure the availability of transmission services at reasonable rates.” Id. So, when we wrote that “[o]ne of [the Commission’s] responsibilities is to assure a nationwide system of wire communications services at reasonable prices,” id., we were using section 1’s language in just the way required by Southwestern Cable, Midwest Video I, Midwest Video II, and NARUC II: for the light it sheds on the Commission’s Title II ratemaking power. In other words, we viewed the Commission’s Computer II Order—like the Supreme Court had viewed the regulations at issue in Southwestern Cable—as regulation of services otherwise beyond the Commission’s authority in order to prevent frustration of a regulatory scheme expressly authorized by statute.

-- Comcast v FCC, No. 08-1291, Slip at 24 (DC Cir. April 6, 2010)


"Title I is not an independent source of regulatory authority; rather, it confers on the FCC only such power as is ancillary to the Commission's specific statutory responsibilities.  See United States v. Southwestern Cable Co., 392 U.S. 157, 178, 88 S. Ct. 1994, 2005, 20 L.Ed.2d 1001 (1968) (FCC's Title I power "restricted to that reasonably ancillary to the effective performance of the Commission's various responsibilities").  In the case of enhance [telephone] services, the specific responsibility to which the Commission's Title I authority is ancillary to its Title II authority is over common carrier services.  See CCIA v. FCC, 693 F.2d 198, 213 (D.C. Cir. 1982) (upholding FCC regulation of enhanced services as ancillary to Commission's authority over interstate basic telephone services);  GTE Serv. Corp. v. FCC, 474 F.2d 724, 731 (2d Cir. 1973) (same)." - People of the State of California v. FCC, 905 F.2d 1217, 1241 n. 35 (9th Cir. 1990).


In United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20  L.Ed.2d 1001 (1968), it was settled beyond peradventure that the Commission may  assert jurisdiction under section 152(a) of the Act over activities that are  not within the reach of Title II. 78  In that case, however, the Supreme  Court limited the Commission's jurisdiction to that which is "reasonably  ancillary to the effective performance of the Commission's various  responsibilities." 79  One of those responsibilities is to assure a nationwide system of wire communications services at reasonable prices.80 -- Computer and Communications Industry Association v. Federal Communications Commission, 693 F.2D 198, 213, 224 U.S.APP.D.C. 83 (D.C. Cir. 1982) (citing FN78. United States v. Southwestern Cable Co., 392 U.S. at 172-73, 88 S.Ct. at 2002-03. FN79. Id. at 178, 88 S.Ct. at 2005. FN80. 47 U.S.C. s 152 (1976)).


"The Commission found that enhanced services and CPE were not  within the scope of its Title II jurisdiction but were within its ancillary  jurisdiction." -- Computer and Communications Industry Association v. Federal Communications Commission, 693 F.2D 198, 205, 224 U.S.APP.D.C. 83 (D.C. Cir. 1982)


it determined that it has ancillary jurisdiction over enhanced  services under sections 152 and 153 of the Act.  Section 152 gives the Commission jurisdiction over "all interstate and foreign communication by wire  or radio," 38 and section 153 defines "communication by wire" as "the  transmission of writing, signs, signals, pictures and sounds of all kinds ...  incidental to such transmission." 39  The Commission found that enhanced  services fall within its ancillary jurisdiction as incidental transmissions  over the interstate telecommunications network. 40
      38. 47 U.S.C. s 152(a) (1976).
     39. Id. s 153(a)-(b).
     40. Computer II Final Decision, 77 FCC2d at 432.
Computer and Communications Industry Association v. Federal Communications Commission, 693 F.2D 198, 207, 224 U.S.APP.D.C. 83 (D.C. Cir. 1982)


United States v. Southwestern Cable Co., 392 U.S. 157, 167-168 (1968).

Ancillary Jurisdiction :: Information Service :: Agency

The Commission further found that it possessed jurisdiction over enhanced services under Title I, even as it re-affirmed and bolstered its justification for not imposing  common carrier obligations on enhanced service providers.  It declined to exercise that jurisdiction and regulate enhanced services, however, because it found that market to exhibit "effective competition."78   It reserved the right to exercise its Title I jurisdiction and to intervene should problems involving enhanced services arise. 79

78Computer II , 77 FCC 2d at 432-33, paras. 124-27.
79  Id.

--In Re Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, CC Docket No. 02-33, CC Dockets Nos. 95-20, 98-10, NPRM (February 15, 2002) http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-02-42A1.doc


      93.  The record has convinced us that in order for us to carry out meaningfully the accessibility requirements of  section 255, requirements comparable to those under section 255 should apply to two information services that are critical to making telecommunications accessible and usable by people with disabilities.  We assert ancillary jurisdiction to extend these accessibility requirements to the providers of voicemail and interactive menu service and to the manufacturers of the equipment that perform those functions.  By enacting section 255, Congress has charged the Commission with ensuring that telecommunications services and equipment are accessible to, and usable by, persons with disabilities. We cannot fully achieve that objective without this limited use of our ancillary jurisdiction.
       94. The Commission's assertion of ancillary jurisdiction over information services was upheld by the Court of Appeals for the District of Columbia over fifteen years ago in litigation challenging our rules in Computer II, where the Commission deregulated the provision of both information services (then called "enhanced services")215  and CPE.216  Although the Commission found there that the provision of information services and CPE were not common carrier activities within the scope of Title II regulation, the Commission simultaneously asserted ancillary jurisdiction over information services, including voicemail and interactive menus, by imposing upon AT&T (and its local exchange affiliates) structural separation safeguards that required them to offer these services only through a separate subsidiary.  The Commission also asserted ancillary jurisdiction over CPE, deregulating CPE at the federal level and preempting state CPE tariffing.  The Court of Appeals upheld the Commission's ancillary jurisdiction, finding that the Commission's authority to assert ancillary jurisdiction over matters not within the reach of Title II regulation was "well settled."217   It concluded that the "Commission acted reasonably in defining its jurisdiction over enhanced services and CPE," and that its jurisdiction satisfied the Southwestern Cable standard.218   The court adopted a deferential standard of review, holding that "[b]ecause the Commission's judgment on 'how the public interest is best served is entitled to substantial judicial deference,' the Commission's choice of regulatory tools in Computer II must be upheld unless arbitrary or capricious."219    This precedent guides us in our action today.

215Implementation of the Non-Accounting Safeguards of Sections 271 and 272 of the Communications Act of 1934, as amended, CC Docket No. 96-149, First Report and Order and Further Notice of Proposed Rulemaking, 11 FCC Rcd 21905, 21955, ? 102 (1996) ("all of the services that the Commission has previously considered to be 'enhanced services' are 'information services'"), Order on Reconsideration, 12 FCC Rcd 2297 (1997), further recon. pending, Second Report and Order, 12 FCC Rcd 15756 (1997), aff'd sub nom. Bell Atlantic Telephone Companies, et al v. FCC, et al., 131 F.3d 1044 (D.C. Cir. 1997).
216 Computer and Communications Industry Association v. FCC, 693 F.2d 198, 213 (D.C. Cir. 1982), cert. denied, Louisiana Public Service Commission v. FCC, 461 U.S. 938 (1983).  Pending before the court were several FCC orders, known broadly as Computer II, in which the Commission asserted ancillary jurisdiction over information service.  The court designated the following orders as comprising the Computer II decision:  "Final Decision, In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), 77 FCC 2d 384 (1980) (Computer II Final Decision); Memorandum Opinion and Order, Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), 84 FCC 2d 50 (1980) (Computer II Reconsideration Decision); Memorandum Opinion and Order on Further Reconsideration, Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), 88 FCC 2d 512 (1981) (Computer II Further Reconsideration Decision.)"  Id. at n.1
217 Computer and Communications Industry Association, 693 F.2d at 213.
218 Id. at 213, referring to United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 2005 (1968) (Commission has jurisdiction over that which is "reasonably ancillary to the effective performance of the Commission's various responsibilities").
219 Id.

      95.   Ancillary jurisdiction may be employed, in the Commission's discretion, where the Commission has subject matter jurisdiction over the communications at issue and the assertion of jurisdiction is reasonably required to perform an express statutory obligation.220   Both predicates for jurisdiction are satisfied here.  The Court of Appeals' conclusion in Computer II that the Commission has subject matter jurisdiction over information services is particularly appropriate for voicemail and interactive menus, two services over which the Commission has asserted ancillary jurisdiction for more than a decade through its comparably efficient interconnection (CEI) plan requirements.221   Given our continuous assertion of jurisdiction over these two information services, we reject any suggestion by commenters that we have not previously concluded that we have subject matter jurisdiction over these services. 222

220 See generally United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994 (1968); see also Second Computer Inquiry,  77 FCC 2d. at 432, ? 126.
221 In Computer III, the Commission adopted a new regulatory regime that substituted "nonstructural" safeguards for Computer II's requirements that information services be offered only through a separate subsidiary. The Commission determined that information services could be offered by carriers on an integrated basis, provided that those previously subject to separation requirements file a plan for "comparably efficient interconnection" (CEI).   See Amendment of Section 64.702 of the Commission's Rules and Regulations (Computer III), CC Docket No. 85-229, Phase I, 104 FCC 2d 958, 118-21 (1986) (Phase I Order), recon., 2 FCC Rcd 3035 (1987) (Phase I Recon. Order), further recon., 3 FCC Rcd 1135 (1988) (Phase I Further Recon. Order), Phase I Order and Phase I Recon. Order vacated, California v. FCC, 905 F.2d 1217 (9th Cir. 1990); Phase II, 2 FCC Rcd 3072 (1987) (Phase II Order), recon., 3 FCC Rcd 1150 (1988) (Phase II Recon. Order), Phase II Order, vacated, California v. FCC, 905 F.2d 1217 (9th Cir. 1990); Computer III Remand Proceedings, 5 FCC Rcd 7719 (1990) (ONA Remand Order), recon., 7 FCC Rcd 909 (1992), pets. for review denied, California v. FCC, 4 F.3d 1505 (9th Cir. 1993); Computer III Remand Proceedings:  Bell Operating Company Safeguards and Tier 1 Local Exchange Company Safeguards, 6 FCC Rcd 7571 (1991) (BOC Safeguards Order); BOC Safeguards Order vacated in part and remanded, California v. FCC, 39 F.3d 919 (9th Cir. 1994) (California III).   Since that requirement took effect, carriers have filed numerous CEI plans covering both voice mail and interactive menus, among other services.  See, e.g., Bell Operating Companies Joint Petition for Waiver of Computer II Rules, 10 FCC Rcd 13758, 13770-13774, App. A (Com.Car.Bur. 1995) (BOC CEI Plan Approval Order).
222 See Attachment to Letter from Brian F. Fontes, CTIA, to Chairman William E. Kennard, dated July 7, 1999 (ex parte submission in WT Docket No. 96-198).

     96.  Our subject matter jurisdiction flows from at least three distinct provisions of Title I of the Act.  Section 1 of the Communications Act established the Commission "[f]or the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States ... adequate facilities at reasonable charges ...."223   Similarly, Section 2 gives us jurisdiction over "all interstate and foreign communication by wire or radio" and "all persons engaged within the United States in such communication...." 224  Section 3 defines  "communication by wire" and "communication by radio" as including  "the transmission ...of writing, signs, signals, pictures and sounds of all kinds ... including all instrumentalities, facilities, apparatus, and services (among other things, the receipt, forwarding, and delivery of communications) incidental to such transmission." (emphasis added).225   We believe that these three provisions serve as the foundation for subject matter jurisdiction today, just as they did when Computer II was decided.

223 47 U.S.C. ? 151.
224 47 U.S.C. ? 152.
225 47 U.S.C. ?? 153(33), 153(51).

     97.  Both voicemail and interactive menu services, and the related equipment that perform these functions, are at the very least "incidental" to the "receipt, forwarding and delivery of communications."  Indeed, the evidence here persuades us that  these two information services are not only incidental to communications, but essential to the ability of persons to effectively use telecommunications.226   In reaching this conclusion, we are not breaking new ground, but are simply continuing our longstanding practice of asserting jurisdiction over voicemail and interactive menus. 227

 98.  We note, however, that in the Computer II Reconsideration Decision we expressly reserved judgment on whether or not non-carrier-provided CPE would be subject to our Title I jurisdiction.228   Similarly, we did not reach the question of whether the Commission had jurisdiction over information services provided by non-carriers.  We resolve these questions here in the affirmative.  These services and their related equipment are not less "incidental" to the "receipt, forwarding, and delivery of communications" because the services may be provided by non-carriers  in some instances.  Indeed, sections 1 through 3 of Title I of the Act are broadly worded and not limited in scope to communications by carriers.  Consistent with the statutory language, therefore, we find that our Title I subject matter jurisdiction over voicemail and interactive menu services, and related equipment, extends to that which is provided by carriers and non-carriers alike.

228 See Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), Memorandum Opinion and Order,  84 FCC 2d 50 at ? 144, (1980).

 99.  The second step in our analysis requires us to evaluate whether, in this specific context, there is a statutory nexus supporting assertion of ancillary jurisdiction over voicemail and interactive menu service and manufacturers of equipment that performs those functions.  Framed somewhat differently, the test, as articulated by the Court of Appeals for the District of Columbia, is whether jurisdiction is "reasonably ancillary."229   We find that the requisite statutory nexus exists, and employ ancillary jurisdiction to require that voicemail and interactive menu service and equipment must comply with requirements comparable to those under section 255.  We find, as described below, that these two discrete information services are both so integral to the use of telecommunications services today that, if inaccessible and unusable, the underlying telecommunications services that sections 255 and 251(a)(2) have sought to make available will not be accessible to persons with disabilities in a meaningful way. In short, inaccessible voicemail and interactive menus could defeat the effective implementation of sections 255 and 251(a)(2).

229 Computer and Communications Industry Association, 693 F.2d at 213.

100.  Many commenters raised compelling examples of the importance of access to voicemail and interactive menus.  Both professional organizations and individual consumers reported how people with disabilities are hampered daily by lack of access to services others take for granted -- leaving a message for a colleague, reaching the desired person at a business, or simply receiving a phone call.230   The Council of Organizational Representatives on National Issues Concerning People who are Deaf or Hard of Hearing (COR) concluded that  "without access to certain enhanced services, such as automated voice response systems and voice mail services, individuals who are deaf or hard of hearing will continue to be barred from enjoying even basic access to the telecommunications network."231   Others explained that because of the prevalence of voicemail and interactive menus, unless these services are made accessible, the isolation of people with disabilities will be exacerbated ,232  decreasing employment opportunities and reducing the participation of persons with disabilities in today's society.233   UCPA summarized the concern with the observation that "voice mail, interactive telephone prompt systems, and Internet telephony are becoming available as mainstream services and are becoming critical to successful participation and competition in our society." 234

 101.   The access barriers created by inaccessible and/or unusable voicemail and interactive menus has made it extremely difficult for people with hearing, vision, or physical disabilities either to reach the party to whom they have placed the call or to obtain the information they seek in their phone call.235   One commenter explains:

 102.  Often all that is available at the other end of the line is an automated voicemail or menu system which is not accessible to or usable by people with disabilities.  For example, the voicemail or menu may not allow adequate time for a caller using the Telecommunications Relay Service to have the information from the automated device relayed to the caller's TTY and a response from the caller relayed back to the device through the Communications Assistant; or the sounds may be so quick that a person who is hard of hearing cannot process them quickly enough.237    The speed of the menu choices can also create an access barrier for someone with a learning disability who cannot process the information fast enough.  The time allowed for a person to input the necessary numbers to retrieve voicemail messages, select an option from a list of choices or control the other functions may be too short for people with motor disabilities, or people who are blind.238   In these instances, although the phone call may be completed in the technical sense of terminating the call, the call is not accessible to the person.  Despite the creation of a transmission path, if there is no means for a person to communicate with the mechanism at the other end, the telephone call is ineffective.  239

237        See, e.g., Ireland comments at 2 ("Voice mail and automated voice response systems, so common today, are impossible for many hard of hearing people to understand.  Ears affected by hearing loss, even when properly fitted with hearing aids, cannot process sound as quickly as normal ears; by the time the first word or two are deciphered, the speaker is already on to the next sentence.")
238        CILMN comments at  3-4.
239        A number of carriers have made a similar point in comments submitted in other proceedings where they have argued that various messaging services are "integral" to the telecommunications services provided by the carrier, and that services such as voicemail therefore should be treated differently than other information services.  (Petition of Bell Atlantic at 7-8, Petition of NTCA at 6-7, Petition of Primeco at 6-7, Petition of SBC at 7, Petition of TDS at 6, filed in Telecommunication Carriers' Use of Customer Proprietary Network Information and Other Customer Information, CCB Docket 96-115 (CPNI Proceeding)).

 103.   This record persuades us that failure to ensure accessibility of voicemail and interactive menu services, and the related equipment that performs these functions, would seriously undermine the accessibility and usability of telecommunications services required by sections 255 and 251(a)(2).   In Southwestern Cable, the Supreme Court found that Commission had authority to regulate CATV using its ancillary jurisdiction to avoid disruptive effect on network broadcasting.240   Here, too, we seek to avoid the disruptive effects caused by inaccessible voicemail and interactive menus so as to ensure that the implementation of section 255  is not thwarted.  Further, the statutory nexus for asserting jurisdiction is even stronger here than in Computer II, which broadly sanctioned ancillary jurisdiction over information services. In Computer II the Commission asserted ancillary jurisdiction to ensure just and reasonable rates for regulated services that consumers were already receiving.  Our concern here is even more fundamental: ensuring and facilitating accessibility and usability of telecommunications services and equipment by those persons not receiving full access and use of these services.

240 Southwestern Cable, 392 US at 175-77.

 104.   Under these circumstances, we disagree with those who contend that the Act's use of defined terms precludes us from extending accessibility requirements to anything other than telecommunications services.241   The expression unius maxim "'has little force in the administrative setting'."242   Indeed, the Court of Appeals for the D.C. Circuit has expressly rejected this argument in upholding the Commission's interpretation of recent amendments to the Communications Act.  In Mobile Communications, the Commission required MTEL, the holder of a pioneer's preference, to pay for its license for a narrowband personal communications service (PCS) despite the fact that in amending the payment provisions of the Act in 1996, Congress did not require payments for such licenses but did require payment for other types of licenses. In the provision at issue, Congress required the three broadband PCS pioneers and all future pioneers to pay for their licenses according to a statutorily defined formula.  However, by its terms, the payment requirement did not extend to MTEL, whose license was confirmed in July 1993, because the statute specified that the payment requirements did "not apply to applications that have been accepted for filing on or before September 1, 1994."  243

241        BSA reply comments at 3-4; CEMA comments at 9; CTIA reply comments at 10; GTE comments at 3; ITI comments at 9; Microsoft reply comments at 7-8; PCIA reply comments at 4-5; SBC reply comments at 2,4; SBC comments at 3; Sprint reply comments at 3-4; TIA reply comments at 43; USA comments at 4.
242        Mobile Communications Corp. of America v. FCC, 77 F.3d 1399, 1404-05 (D.C. Cir. 1996 (citations omitted)), cert. denied Mobile Telecommunication Technologies Corp. v. FCC, 519 U.S. 823 (1996).
243       47 U.S.C. ? 309(j)(13)(D)(iv).

 105.  The court did not agree that where the statutory scheme "'limits a thing to be done in a particular mode, it includes the negative of any other mode'."244    Its  rationale is particularly instructive here. Not only did it dismiss expression unius as a maxim of construction in the administrative setting, but it also noted that a "'congressional prohibition of particular conduct may actually support the view that the administrative entity can exercise its authority to eliminate a similar danger'."245   Analyzing the Commission's jurisdiction to require license payments not specified in the statute, the Court rejected a reading of congressional intent that would have forbidden the Commission from setting reasonable charges for a license "even where doing so would enable the Commission to reap many of the benefits of Congress's own new policy -- including obtaining reimbursement for the transfer of a valuable entitlement.  We think such a reading untenable." 246

244        Mobile Communications Corp. of America, 77 F.3d at 1404 (citation omitted).
245        Id at 1405 (citation omitted).
246        Id.

106. The suggestion that we lack ancillary jurisdiction here suffers from the same infirmity.247   We simply cannot credit the argument that Congress intended that we be barred from effectively implementing sections 255 and 251(a)(2).   To the contrary, we believe that Congress enacted these new provisions to ensure that telecommunications services are made accessible to persons with disabilities, and expected that we implement these provisions in the most efficacious manner possible.  We will not ignore a record that demonstrates that our failure to apply accessibility requirements to voicemail and interactive menus will substantially undermine implementation of these significant provisions. Where, as here, we have subject matter jurisdiction over the services and equipment involved, and the record demonstrates that implementation of the statute will be thwarted absent use of our ancillary jurisdiction, our assertion of jurisdiction is warranted. Our authority should be evaluated against the backdrop of an expressed congressional policy favoring accessibility for persons with disabilities.  This backdrop serves to buttress the actions taken today, not limit it.

 247       In United Video, Inc. v. FCC, 890 F.2d 1173, 1183 (D.C. Cir. 1989), the court also sustained our ancillary jurisdiction in the face of an argument akin to expressio unius. At issue was the FCC's syndicated exclusivity rule, which was predicated upon our section 303(r) powers and ancillary jurisdiction.   Petitioners had suggested that any such authority was constrained by the enactment of the 1984 Cable Act. Because the Cable Act did not affirmatively authorize the syndex rules, petitioners argued that they were impermissible.  The court disagreed: "[the syndex rules]  clearly fall within the Act's general authority, the regulation of interstate and foreign communication by wire or radio... [and] were reasonably adopted in furtherance of a valid communications policy goal.  Hence, they fall under the Commission's section 303(r) powers unless they are 'inconsistent with law'." Id.  Thus, even where Congress has enacted legislation addressing a subject, that does not bar the Commission from using its ancillary jurisdiction where reasonably required to further a valid statutory goal - - in this case, the effective implementation of sections 255 and 251(a)(2).

107.  On this same basis, however, we decline to extend accessibility obligations to any other information services.  While some commenters have argued that there is an overwhelming need for all information services to be accessible to people with disabilities, we assess the record differently, and use our discretion to reach only those services we find essential to making telecommunications services accessible. Unlike voicemail and interactive menus, other information services discussed by commenters do not have the potential to render telecommunications services themselves inaccessible. Therefore, we decline to exercise our ancillary jurisdiction over those additional services.  Many of these other services are alternatives to telecommunications services, but not essential to their effective use. For example, e-mail,  electronic information services, and web pages are alternative ways to receive information which can also be received over the phone using telecommunications services. In contrast, inaccessible and unusable voicemail and interactive menus operate in a manner that can render the telecommunications service itself inaccessible and unusable.

 108.  Our assertion of ancillary jurisdiction is thus discrete and limited.  Consequently, we dismiss the contention that including even a single  information service under our accessibility and usability rules could lead to the full-scale regulation of entities providing information services, such as Internet Service Providers.248   Nor can we credit the argument that extension of these provisions through ancillary jurisdiction will chill innovation, resulting in less accessibility not more.249   We do emphasize, however,  that our decision to apply these accessibility obligations to two discrete information services does not alter the regulatory classification afforded these services.  Nor is it our intent by this action to apply any additional provisions of the Act to providers and manufacturers of voicemail and interactive menu services and equipment.  Thus, as a general matter, we are not altering our past or current treatment of information services.

248        BSA reply comments at 4-5.
249        ITI reply comments at 11-12; Microsoft reply comments at 4-5; Sprint reply comments at 4.

--In the Matter of Implementation of Sections 255 and 251(a)(2) of the Communications Act of 1934, as Enacted by the Telecommunications Act of 1996, Report and Order and Further Notice of Inquiry, WT Docket No. 96-198 (September 29, 1999) available at http://www.fcc.gov/Bureaus/Common_Carrier/Orders/1999/fcc99181.wp



 124.  This does not mean however that we are void of jurisdiction over enhanced services.  Congress gave this agency the mandate '. . . to make available, so far as possible, to all people of the United States a rapid, efficient, nation-wide and world-wide wire and radio communication service with adequate facilities at reasonable charges . . .'  47 U.S.C. s 151.  In carrying out this mandate Congress made clear that the Commission's jurisdiction extends '. . . to all interstate and foreign communication by wire or radio . . .'  47 U.S.C. s 152(a).  The Act defines 'communication by wire' and 'communication by radio' as '. . . the transmission of writing, signs, signals, pictures and sounds of all kinds . . . incidental to such transmission.'  47 U.S.C. s 153(a) and (b).  The statutory language of 47 U.S.C. s 152 confers on this agency broad subject matter jurisdiction.  The Supreme Court has stated that this Commission was given 'regulatory power over all forms of electrical communication . . .'  United States v. Southwestern Cable Co., 392 U.S. 157, 172 (1968), citing S. Rep. No. 781, 73d, long., 2d Sess., 1.  See also GTE Service Corp., General Telephone Company of Southwestern v. U.S., 449 F.2d 846 (5th Cir. 1971); General Telephone Company of California v. FCC, 413 F.2d 390 (D.C. Cir.), cert. den., 396 U.S. 385 (1969).
 125.  Further, the Act was designed to provide the Commission with sufficiently elastic powers to readily accommodate new developments in the field of communications.  In FCC v. Pottsville Broadcasting Co., the Supreme Court recognized the fluidity of this environment '. . . and of the corresponding requirement that the administrative process possess sufficient flexibility to adjust itself to these factors.'  309 U.S. 134, 138 (1940). It has been held that the Act must be read as granting the Commission 'a comprehensive mandate,' with 'not niggardly but expansive powers.'  National Broadcasting Co. v. United States, 319 U.S. 190, 219 (1943).  See also United States v. Southwestern Cable Co., 392 U.S. 157 (1968); Philadelphia Television Broadcasting Co. v. FCC, 359 F.2d 282 (1966). Thus, Title II and Title III provide the principal regulatory forms of the Communications Act, but the Commission also has regulatory powers independent of Title II and Title III. United States v. Southwestern Cable Co., 319 U.S. at 172.  Accordingly we find that the enhanced services under consideration in this proceeding constitute the electronic transmission of writing, signs, signals, pictures, etc., over the interstate telecommunications network and, as such, fall within the subject matter jurisdiction of this Commission.
 126.  Even though an activity falls within our subject matter jurisdiction, our ability to subject it to regulation is not without constraints.  The principal limitation upon, and guide for, the exercise of these additional powers which Congress has imparted to this agency is that Commission regulation must be directed at protecting or promoting a statutory purpose.  In some instances, that means not regulating at all, especially if a problem does not exist.  Home Box Office v. FCC 567 F.2d 9 (1977) cert. denied, 434 U.S. 829 (1977) (Commission's pay cable rules vacated, in the absence of evidence supporting the need for regulation).  See also City of Chicago v. FPC, 458 F.2d 731, 742 (1971) cert. denied, 405 U.S. 1074 (1972) ('regulation perfectly reasonable and appropriate in the face of a given problem [is] highly capricious if that problem does not exist').
--In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), Docket No. 20828, Final Decision, 77 FCC2d 384 (May 2, 1980) (Computer II Final Decision)


Looking to the basic purpose of our regulatory authority, as well as specific statutory guidelines, we determined not to assert regulatory authority over data processing services, whether or not such services employed communications facilities in order to link the terminals of the subscribers to centralized computers.
-- In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), Docket No. 20828, Tentative Decision And Further Notice Of Inquiry And Rulemaking, 72 FCC2d 358 para 4  (July 2, 1979)


We further sought to determine whether such services should be free from, or subject to, government regulation and whether entry into the provision of such computer services by common carriers and others required regulatory control.
-- In re Amendment of Section 64.702 of the Commission's Rules and Regulations (Second Computer Inquiry), Docket No. 20828, Tentative Decision And Further Notice Of Inquiry And Rulemaking, 72 FCC2d 358 para 2 (July 2, 1979)


 4.  In addition, two basic regulatory and policy questions had to be resolved:  (a) the nature and extent of the regulatory jurisdiction which could and should be applied to data processing services, and (b) whether, under what circumstances, and subject to what conditions or safeguards, common carriers should be permitted to engage in data processing.
 5.  Looking to the basic purpose of our regulatory activity as well as our specific statutory guidelines, we determined not to assert regulatory authority over data processing services whether or not such services employed communications facilities in order to link the terminals of the subscribers to centralized computers.
-- In The Matter Of Amendment Of Section 64.702 Of The Commission's Rules And Regulations, Docket No. 20828, Notice Of Inquiry And Proposed Rulemaking, 61 FCC2d 103 (August 9, 1976)

 5. Several carriers contend that this Commission is without authority to affect their public offering of data processing services and that, therefore, we lack the statutory warrant for effectuating the proposed rules which require a separation of data processing activities from common carriage undertakings. We do not agree.
 6. We wish to make it clear that in our Decision herein and in the rules adopted to implement this Decision we are not attempting to assert jurisdiction over common carriers as purveyors of computer services, as such. Instead, we are addressing ourselves to the obligation of common carriers, in accordance with the purposes and objectives of the Communications Act, to make available 'to all the people of the United States a rapid, efficient, Nation-wide and world-wide wire and radio communications service with adequate facilities at reasonable charges' (47 U.S.C. s 151), and to the duty imposed upon this Commission by the Communications Act of 1934, as amended, to execute and enforce the provisions of that Act in such manner as to achieve the purposes and objectives of the Act.
 7. There is virtually unanimous agreement by all who have commented in response to our Inquiry, as well as by all those who have contributed to the rapidly expanding professional literature in the field, that the data processing industry has become a major force in the American economy, and that its importance to the economy will increase in both absolute and relative terms in the years ahead. 4 There is similar agreement that there is a close and intimate relationship between data processing and communications services and that this interdependence will continue to increase. In fact, it is clear that data processing cannot survive, much less develop further, except through reliance upon and use of communication facilities and services. Conversely, modern communication systems rely upon and make increasingly greater use of data processing. We stated in our Notice of Inquiry, and no respondent has challenged the finding, that common carriers 'as part of the natural evolution of the developing communications art' were rapidly becoming equipped to enter into the data processing field, if not by design, by the fact that computers utilized for the provision of conventional communication services could be programmed additionally to perform data processing services. Notice of Inquiry, 8 FCC 2d 11, 13 (1966).
 8. It is our view that the total record herein, including the arguments addressed in both written and oral presentations to us, supports the conclusion that without appropriate regulatory safeguards, the provision of data processing services by common carriers could adversely affect the statutory obligation of such carriers to provide adequate communication services under reasonable terms and conditions and impair effective competition in the sale of data processing services.
--In The Matter Of Regulatory And Policy Problems Presented By The Interdependence Of Computer And Communication Services And Facilities, Docket No. 16979, Final Decision and Order, 1971 WL 22948 (FCC), 21 Rad. Reg. 2d (P & F) 1591 (March 18, 1971) (Computer I).

 27. On the other hand, certain of the carrier respondents contend that the Commission does not possess the necessary legal power to prevent communications common carriers from providing data processing services. We recognize that these conflicting contentions raise a question of the nature and extent of our legal power over the provision of data processing services by common carriers, to which we will now address ourselves.
 27a. First, as already noted, there is no specific provision which bars a common carrier from providing non-regulated services and that many carriers do, in fact, provide such services. It does not follow, however, that the Commission may not exercise its jurisdiction over carriers to prescribe appropriate conditions for engaging in nonregulated services or to prohibit the furnishing of such services where such activities burden or impair their common carrier communications obligations.
 28. In this connection, we are aware that the Communications Act grants a broad range of powers to the Commission with respect to carriers subject to its jurisdiction in order to effectuate the policies and objectives of the Act. Thus, the Commission has the power to require a common carrier to furnish interstate communications service 'upon reasonable request therefor,' 47 U.S.C. 201(a); to determine what are just and reasonable common carrier charges, practices, classifications and regulations for and in connection with interstate communication, and to prescribe such rules and regulations as are 'necessary in the public interest' to assure the justness and reasonableness of all such charges, practices, classifications and regulations, 47 U.S.C. 201(b); to prevent unjust discrimination for or in connection with any such interstate service, 47 U.S.C. 202(a); to prescribe just, reasonable and non-discriminatory common carrier charges, practices, classifications and regulations; and to issue appropriate orders with respect thereto, 47 U.S.C. 205(a); to control the acquisition, extension, construction or operation of lines by common carriers and to impose conditions in certificates and authorizations issued to common carriers for such lines as the public convenience and necessity may require, 47 U.S.C. 214(a) and (c); to examine transactions entered into by common carriers which may affect charges or services, 47 U.S.C. 215(a); to classify common carrier radio stations and prescribe the nature of the services to be rendered by each such class, 47 U.S.C. 303(a) and (b); to assess the value of all of the properties of a carrier, 47 U.S.C. 213; to deny common carrier radio applications, after hearing, upon a finding that the public interest, convenience or necessity would not be served by a grant thereof, 47 U.S.C. 309; to modify, after hearing, existing common carrier radio authorizations if public interest, convenience, or necessity would be served thereby, 47 U.S.C. 316; to prescribe the accounting and reporting to be performed by common carriers; 47 U.S.C. 220; and to adopt rules and regulations and issue orders consistent with the Act as may be necessary in the execution of the Commission's functions, 47 U.S.C. 154(i). Moreover, it is well settled that the Commission, in executing its statutory obligations, is required to consider and evaluate all relevant factors, including national policies relating to competition, monopolies or combinations, contracts or agreements in restraint of trade and, in the case of Sections 2, 3 and 7 of the Clayton Act, to enforce those statutes in their application to common carriers subject to the Commission's jurisdiction. 47 U.S.C. 602(d).
 29. From the foregoing, it is clear that we have the power necessary to insure that common carriers provide efficient and economical communications services. Thus, if the provision of data processing services by a common carrier were to have a substantial adverse effect upon the provision of regulated common carrier communication services or otherwise resulted in an impairment or lessening of competition, we could take such corrective action as we found necessary to insure that the required communication services are furnished, 47 U.S.C. 201(a), 214(d). Upon consideration of the totality of these powers and authority, we conclude that we have ample jurisdiction to bar carriers from providing data processing services upon a proper finding that it would prevent them from discharging their common carrier responsibilities in a manner consistent with the standards and objectives of the Communications Act. We, therefore, also have the jurisdiction and authority to surround the provision of these services with such appropriate safeguards as may be necessary to carry out the policies and objectives of the Communications Act.
--In The Matter Of Regulatory And Policy Problems Presented By The Interdependence Of Computer And Communication Services And Facilities, Docket No. 16979, Tentative Decision (April 3, 1970)

Broadband Internet Access Services

Open Internet 2010 :: Verizon v FCC

Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014), aff’g in part, vac’g in part sub nom. Preserving the Open Internet, Report and Order, FCC 10-201, 25 FCC Rcd. 17905 (2010)

Open Internet Policy Statement 2005 :: Comcast v FCC

"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." [Verizon at 12 (D.C. Cir. 2014)]

Broadcast Flag

Motion Picture Ass’n of Am. v. FCC, 309 F.3d 796, 804 (D.C. Cir. 2002) (ruling FCC lacked ancillary jurisdiction to regulate broadcast content, video description rules) ("Under [§ 151], Congress delegated authority to the FCC to expand radio and wire transmissions, so that they would be available to all U.S. citizens. Section [151] does not address the content of the programs with respect to which accessibility is to be ensured. In other words, the FCC’s authority under [§ 151] is broad, but not without limits")


"The insurmountable hurdle facing the FCC in this case is that the agency’s general jurisdictional grant does not encompass the regulation of consumer electronics products that can be used for receipt of wire or radio communication when those devices are not engaged in the process of radio or wire transmission. Because the Flag Order does not require demodulator products to give effect to the broadcast flag until after the DTV broadcast has been completed, the regulations adopted in the Flag Order do not fall within the scope of the Commission’s general jurisdictional grant. Therefore, the Commission cannot satisfy the first precondition to its assertion of ancillary jurisdiction." -- ALA v. FCC, No. 04-1037, slip at 19 (DC Cir. May 6, 2005)


"We think that the Supreme Court’s cautionary approach in applying the second prong of the ancillary jurisdiction test suggests that we should be at least as cautious in this case. Great caution is warranted here, because the disputed broadcast flag regulations rest on no apparent statutory foundation and, thus, appear to be ancillary to nothing. Just as the Supreme Court refused to countenance an interpretation of the second prong of the ancillary jurisdiction test that would confer “unbounded” jurisdiction on the Commission, Midwest Video II, 440 U.S. at 706, we will not construe the first prong in a manner that imposes no meaningful limits on the scope of the FCC’s general jurisdictional grant. "

"In light of the parameters of the Commission’s ancillary jurisdiction established by Southwestern Cable, Midwest Video I, and Midwest Video II, this case turns on one simple fact: the Flag Order does not require demodulator products to give effect to the broadcast flag until after the DTV broadcast is complete. The Flag Order does not regulate the actual transmission of the DTV broadcast. In other words, the Flag Order imposes regulations on devices that receive communications after those communications have occurred; it does not regulate the communications themselves. Because the demodulator products are not engaged in “communication by wire or radio” when they are subject to regulation under the Flag Order, the Commission plainly exceeded the scope of its general jurisdictional grant under Title I in this case." -- ALA v. FCC, No. 04-1037, slip at 24-25 (DC Cir. May 6, 2005)

Universal Service Fund

"There we upheld the Commission’s creation of a Universal Service Fund to provide subsidies for telephone service in rural and other high-cost areas. Again borrowing the language of section 1, we held that “[a]s the Universal Service Fund was proposed in order to further the objective of making communication service available to all Americans at reasonable charges, the proposal was within the Commission’s statutory authority.” Id. at 1315. Contrary to the Commission’s argument, however, Rural Telephone, like CCIA, rested not on section 1 alone, but on the fact that creation of the Universal Service Fund was ancillary to the Commission’s Title II responsibility to set reasonable interstate telephone rates. True, as the Commission observes, our discussion of ancillary authority never cites Title II. But any such citation would simply have restated the obvious given that the Commission established the Universal Service Fund for the very purpose of “‘ensur[ing] that telephone rates are within the means of the average subscriber in all areas of the country.’” Id. at 1311–12 (emphasis added) (quoting In re Amend. of Pt. 67 of the Comm’n’s Rules and Establishment of a Joint Bd., 96 F.C.C.2d 781, 795, ¶ 30 (1984)). -- Comcast v FCC, No. 08-1291, Slip at 26 (DC Cir. April 6, 2010)

Other Cases

References