Federal Internet Law & Policy
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Broadband Deployment

Dont be a FOOL; The Law is Not DIY

"The Telecommunications Act of 1996 (P.L. 104-104) addressed the issue of whether the federal government should intervene to prevent a “digital divide” in broadband access. Section 706 requires the FCC to determine whether “advanced telecommunications capability [i.e., broadband or high-speed access] is being deployed to all Americans in a reasonable and timely fashion.” If this is not the case, the act directs the FCC to “take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.”" --Broadband Internet Regulation and Access: Backbround Issues, CRS Report for Congress, Nov. 21, 2008 (copy acquired through wikileaks)

Telecommunications Act of 1996, Pub. L. No. 104-104, § 706(a), 110 Stat. 56, 153 (codified as 47 U.S.C. 1302)


(a) In General: The Commission and each State commission with regulatory jurisdiction over telecommunications services shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) by utilizing, in a manner consistent with the public interest, convenience, and necessity, price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.

(b) Inquiry: The Commission shall, within 30 months after the date of enactment of this Act, and regularly thereafter, initiate a notice of inquiry concerning the availability of advanced telecommunications capability to all Americans (including, in particular, elementary and secondary schools and classrooms) and shall complete the inquiry within 180 days after its initiation. In the inquiry, the Commission shall determine whether advanced telecommunications capability is being deployed to all Americans in a reasonable and timely fashion. If the Commission's determination is negative, it shall take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market.

(c) Definitions: For purposes of this subsection:

(1) Advanced telecommunications capability: The term 'advanced telecommunications capability' is defined, without regard to any transmission media or technology, as high-speed, switched, broadband telecommunications capability that enables users to originate and receive high-quality voice, data, graphics, and video telecommunications using any technology.

(2) Elementary and secondary schools: The term 'elementary and secondary schools' means elementary and secondary schools, as defined in paragraphs (14) and (25), respectively, of section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)

"Section was formerly set out as a note under section 157 of this title. Section was enacted as part of the Telecommunications Act of 1996, and not as part of the Broadband Data Improvement Act which comprises this chapter."

Pursuant to Sec. 706, the FCC has taken two primary actions. First, the FCC has engaged in a series of inquiries that have resulted in reports to Congress. Second, the FCC gathers data from telecommunications services on an ongoing basis and releases data reports to the public twice a year. The Sec. 706 Reports have considered a wide range of issues:

Regulatory Authority

See also FCC Jurisdiction

Through out the Sec. 706 proceedings, parties had petitioned the FCC to take action in light of some problem in the deployment of advanced services to all Americans. The FCC initially responded that Sec. 706 confers the FCC with the authority to report, but is not authority to take regulatory action.

Section 706(a) does not constitute an independent grant of forbearance authority or of authority to employ other regulating methods. [Advanced Services Order, 13 F.C.C.R. at 24044 ¶ 69 (1998)].

The FCC first sought to assert that Sec. 706 granted it authority to act in the Comcast case where the FCC sought to enforce the Four Broadband Principles. However, the D.C. Circuit concluded that the FCC was bound by its own decision in the Advanced Services Order that Sec. 706 granted it no such authority, and there had been no APA proceeding to change that conclusion.

"In an earlier, still-binding order, however, the Commission ruled that section 706 "does not constitute an independent grant of authority." In re Deployment of Wireline Servs. Offering Advanced Telecomms. Capability, 13 F.C.C.R. 24,012, 24,047, ¶ 77 (1998) (Wireline Deployment Order). Instead, the Commission explained, section 706 "directs the Commission to use the authority granted in other provisions . . . to encourage the deployment of advanced services." Id. at 24,045, ¶ 69... "[S]ection 706(a) does not constitute an independent grant of forbearance authority or of authority to employ other regulating methods." Wireline Deployment Order, 13 F.C.C.R. at 24,044, ¶ 69 (emphasis added). Because the Commission has never questioned, let alone overruled, that understanding of section 706, and because agencies "may not . . . depart from a prior policy sub silentio," FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1811 (2009), the Commission remains bound by its earlier conclusion that section 706 grants no regulatory authority." [Comcast v. FCC, 600 F.3d 642 (D.C. Cir. 2010), Slip at 31.]

[See also Verizon, Slip at 19 (D.C. Cir. 2014)] This is a very narrow point so be careful. The court here was not concluding whether Sec. 706 was or was not a source of authority - the court merely concluded that the agency was bound by its prior decision until such time that it changed that decision in a proper APA proceeding; the FCC had not done that. Whether Sec. 706 was, in fact, a source of authority was unresolved.

In the Open Internet proceeding, the FCC again concluded that Sec. 706 does confer it with authority to take action. This time, however, the FCC addressed its interpretation of Sec. 706 in the Advanced Services Order and gave a reasoned explanation as to why it was revising its interpretation. [Open Internet Order, 25 F.C.C.R. at 17969 ¶ 119 n.370 (“To the extent that the Advanced Services Order can be construed as having read Section 706(a) differently, we reject that reading of the statute for the reasons discussed in the text.”)]

On appeal, the D.C. Circuit upheld the FCC's interpretation under Chevron (although the court also reversed the FCC, holding that the FCC cannot treat ISPs as common carriers (non discrimination) where the FCC has concluded that they are not common carriers). [USTA v. FCC Slip 17 DC Cir. 2015 ("In Verizon, we upheld the Commission’s conclusion that section 706 provides it authority to promulgate open internet rules.")] [11th 706 Report n 6 2016 ("The D.C. Circuit has upheld our interpretation of subsections (a) and (b) of section 706 as independent and overlapping grants of authority.")] The Court took note that the legislative history of Sec. 706 described it “as a ‘necessary fail-safe’ ‘intended to ensure that one of the primary objectives of the [Act]—to accelerate deployment of advanced telecommunications capability—is achieved.’” [Verizon at 639 (citing S. REP. NO. 104-23, at 50–51 (1996)] That reasonably can be interpreted that Sec. 706 provides authority to act.

This of course begs the question of what Sec. 706 authorizes the FCC to do:

Sec. 706(a): "Although the Commission once disclaimed authority to regulate under section 706(a), it never disclaimed authority to regulate the Internet or Internet providers altogether, nor is there any similar history of congressional reliance on such a disclaimer. To the contrary, as recounted above, see supra at 7–9, when Congress passed section 706(a) in 1996, it did so against the backdrop of the Commission’s long history of subjecting to common carrier regulation the entities that controlled the last-mile facilities over which end users accessed the Internet. See, e.g., Second Computer Inquiry, 77 F.C.C.2d at 473–74 ¶¶228–29. Indeed, one might have thought, as the Commission originally concluded, see Advanced Services Order, 13 F.C.C.R. at 24029–30 ¶ 35, that Congress clearly contemplated that the Commission would continue regulating Internet providers in the manner it had previously. Cf. Brand X, 545 U.S. at 1003 (Breyer, J., concurring) (concluding that the Commission’s decision to exempt cable broadband providers from Title II regulation was “perhaps just barely” within the scope of the agency’s “statutorily delegated authority”); id. at 1005 (Scalia, J., dissenting) (arguing that Commission’s decision “exceeded the authority given it by Congress”). In fact, section 706(a)’s legislative history suggests that Congress may have, somewhat presciently, viewed that provision as an affirmative grant of authority to the Commission whose existence would become necessary if other contemplated grants of statutory authority were for some reason unavailable. The Senate Report describes section 706 as a “necessary fail-safe” “intended to ensure that one of the primary objectives of the [Act]—to accelerate deployment of advanced telecommunications capability—is achieved.” S. Rep. No. 104-23 at 50–51. As the Commission observed in the Open Internet Order, it would be “odd . . . to characterize Section 706(a) as a ‘fail-safe’ that ‘ensures’ the Commission’s ability to promote advanced services if it conferred no actual authority.” 25 F.C.C.R. at 17970 ¶ 120.

. . . . .

"Of course, we might well hesitate to conclude that Congress intended to grant the Commission substantive authority in section 706(a) if that authority would have no limiting principle. See Comcast, 600 F.3d at 655 (rejecting Commission’s understanding of its authority that “if accepted . . . would virtually free the Commission from its congressional tether”); cf. Whitman, 531 U.S. at 472–73 (discussing the nondelegation doctrine). But we are satisfied that the scope of authority granted to the Commission by section 706(a) is not so boundless as to compel the conclusion that Congress could never have intended the provision to set forth anything other than a general statement of policy. The Commission has identified at least two limiting principles inherent in section 706(a). See Open Internet Order, 25 F.C.C.R. at 17970 ¶ 121. First, the section must be read in conjunction with other provisions of the Communications Act, including, most importantly, those limiting the Commission’s subject matter jurisdiction to “interstate and foreign communication by wire and radio.” 47 U.S.C. § 152(a). Any regulatory action authorized by section 706(a) would thus have to fall within the Commission’s subject matter jurisdiction over such communications—a limitation whose importance this court has recognized in delineating the reach of the Commission’s ancillary jurisdiction. See American Library Ass’n, 406 F.3d at 703–04. Second, any regulations must be designed to achieve a particular purpose: to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans.” 47 U.S.C. § 1302(a). Section 706(a) thus gives the Commission authority to promulgate only those regulations that it establishes will fulfill this specific statutory goal—a burden that, as we trust our searching analysis below will demonstrate, is far from “meaningless.” Dissenting Op. at 7. "

- Verizon, Slip at 24-27 (D.C. Cir. 2014).

Sec. 706(b): "Section 706(b) has a less tortured history. Until shortly before the Commission issued the Open Internet Order, it had never considered whether the provision vested it with any regulatory authority. The Commission had no need to do so because prior to that time it had made no determination that advanced telecommunications technologies, including broadband Internet access, were not “being deployed to all Americans in a reasonable and timely fashion,” the prerequisite for any purported invocation of authority to “take immediate action to accelerate deployment of such capability” under section 706(b). 47 U.S.C. § 1302(b)....In July 2010, however, the Commission concluded that “broadband deployment to all Americans is not reasonable and timely.” Sixth Broadband Deployment Report, 25 F.C.C.R. at 9558 ¶ the Open Internet Order the Commission made clear that this statutory provision does not limit the Commission to using other regulatory authority already at its disposal, but instead grants it the power necessary to fulfill the statute’s mandate. See Open Internet Order, 25 F.C.C.R. at 17972 ¶ 123. Emphasizing the provision’s “shall take immediate action” directive, the Commission concluded that section 706(b) “provides express authority” for the rules it adopted. Id." - Verizon, Slip at 27-29 (D.C. Cir. 2014).

In 2018 Restoring Internet Freedom, the FCC changed its mind, rescinded the Open Internet Rules, and also declared that Sec. 706 is not "an independent grant of regulatory authority" and therefore was not authority for the FCC to implement blocking and throttling rules. The FCC relied on Sec. 257 to retain only the transparency obligation under its new rules. [Mozilla v. FCC, slip at 66 (DC Cir 2019)] As the Court noted in Verizon, Sec. 706 is ambiguous.

the language of Section 706(a) could "certainly be read as simply setting forth a statement of congressional policy" and "just as easily be read to vest the Commission with actual authority. Id. at 637. We have also understood Section 706(b) to be similarly permissive. Id. at 641. Furthermore, in support of its interpretation, the Commission notes that Section 706 lacks details "identify[ing] the providers or entities whose conduct could be regulated," whereas other provisions of the Act that unambiguously grant regulatory authority do specify such details. 2018 Order ¶ 271. We find the Commission's rationales in favor of its reading of Section 706 to be reasonable. [Mozilla v. FCC, slip at 67 (DC Cir 2019)]

Consideration of Sec. 706 as a source of authority was also considered in the VoIP Jurisdiction proceedings.

We are also guided by section 706 of the 1996 Act, which directs the Commission (and state commissions with jurisdiction over telecommunications services) to encourage the deployment of advanced telecommunications capability to all Americans by using measures that “promote competition in the local telecommunications market” and removing “barriers to infrastructure investment.”125 Internet-based services such as DigitalVoice are capable of being accessed only via broadband facilities, i.e., advanced telecommunications capabilities under the 1996 Act,126 thus driving consumer demand for broadband connections, and consequently encouraging more broadband investment and deployment consistent with the goals of section 706.127 Indeed, the Commission’s most recent Fourth Section 706 Report to Congress recognizes the nexus between VoIP services and accomplishing the goals of section 706.128 Thus, precluding multiple disparate attempts to impose economic regulations on DigitalVoice that would thwart its development and potentially result in it exiting the market will advance the goals and objectives of section 706.

125 47 U.S.C. § 157 nt. Section 706 of the 1996 Act is located in the notes of section 7 of the Communication Act. To implement section 706’s mandate, the Commission has considered, among other things, whether its rules promote the delivery of innovative advanced services offerings. See Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, Deployment of Wireline Services Offering Advanced Telecommunications Capability, CC Docket Nos. 01-338, 96-98, 98-147, Report and Order and Order on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978 (2003) (FNPRM), corrected by Errata, 18 FCC Rcd 19020 (2003), aff’d in part, remanded in part, vacated in part, United States Telecom Ass’n v. FCC, 359 F.3d 554 (D.C. Cir. 2004), cert. denied sub nom. Nat’l Ass’n Regulatory. Util. Comm’rs v. United States Telecom Ass’n, 73 USLW 3234 ( U.S. Oct. 12, 2004) (Nos. 04-12, 04-15, 04-18). We find that our actions in this ruling are also consistent with this provision of the Act.

126 See 47 U.S.C. § 157 nt. (c)(1) (defining “advanced telecommunications capability”).

127 See 8x8 Comments at 5; VON Coalition Aug. 19 Ex Parte Letter, Attach at 7-8.

128 See Fourth Section 706 Report at 38 (“[S]ubscribership to broadband services will increase in the future as new applications that require broadband access, such as VoIP, are introduced into the marketplace, and consumers become more aware of such applications.”) (emphasis added); see also id. at 3 (Statement of Chairman Powell) (“Disruptive VoIP services are acting as a demand-driver for broadband connections, lighting the industry’s fuse, and exciting a moribund market.”); APT Comments at 2; Motorola Comments at 12.

Vonage Holdings Corporation Petition for Declaratory Ruling Concerning an Order of the Minnesota Public Utilities Commission, WC Docket No. 03-211, Memorandum Opinion and Order (FCC Nov. 12, 2004 )

Rulemaking Proceedings

The NPRM seeks comment on whether to modify collection of speed tier information and how to improve the data collected about wireless broadband Internet access service. The NPRM also asks how the Commission can best collect information about subscribership to interconnected voice over Internet Protocol service, or VoIP. Finally, the NPRM also seeks comment on how the Commission can develop a more accurate picture of current broadband deployment (including by extrapolating from more accurate estimates of representative urban, metropolitan, urban, low-income, tribal, and rural areas), as well as gather information on price, other factors that affect consumer uptake of broadband services, and international comparisons.