Calling FCC authority a “loophole” assumes the conclusion

January 28

At the Washington Post’s The Switch, Brian Fung has a good article with what I regard as the unfortunate headline “This small loophole could give the FCC much greater control of the Internet.” There are two central points in the article (which in turn reflect comments made by FCC Chair Tom Wheeler): first, in its net neutrality opinion the D.C. Circuit interpreted the FCC’s regulatory authority  under section 706 of the 1996 Communications Act quite broadly, and in this way bolsters the FCC’s ability to regulate advanced telecommunications. Second, the FCC can still police some misbehavior via case-by-case adjudications.  I agree — indeed, I made both of these points two weeks ago in blog posts here and here.

What piqued my interest today was the reference to this as a loophole. Any terminology sets a frame, but one like “loophole” is particularly resonant, as it is commonly understood to imply evasion or avoidance.

Adjudication certainly isn’t a loophole.  On the contrary, proceeding via case-by-case adjudication has always been a core option for agencies.  Indeed, some agencies lack rulemaking authority and can proceed only via adjudication.

By contrast, one can reasonably claim that section 706 is a loophole.  But one way of understanding the argument before the D.C. Circuit was whether 706 was a small loophole or a broader grant of authority, and the majority chose the latter.  The majority may have been wrong about this (just as it may be have wrong in holding that the nondiscrimination rule treated Internet access providers as common carriers), but the thrust of the D.C. Circuit’s reading of section 706 was that it is not a small loophole.

The larger point that the battle over section 706 highlights is how outdated the 1996 Telecommunications Act is. Section 706 is the main remaining section of that Act that focuses in any way on the Internet. Most of the lobbying about, negotiating over, and drafting of the 1996 Telecommunications Act was focused on landline telephony (remember that?), and very little attention was given to the Internet — beyond the (in)famous Communications Decency Act, which the Supreme Court invalidated. After the demise of the CDA, Congress’s main handiwork with respect to the Internet, and its main guidance on FCC authority with respect to the Internet, was in section 706. That section could be read broadly (as the D.C. Circuit did) or more narrowly (as Judge Silberman argued in dissent).  But I imagine everyone could agree that the best guidance would be new legislation from Congress. But, as I noted in one of my earlier posts, I’m not holding my breath.

Stuart Benjamin is the Douglas B. Maggs Professor of Law, Associate Dean for Research, and co-director of the Center for Innovation Policy at Duke Law School. He specializes in telecommunications law, the First Amendment, and administrative law.
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Eugene Kontorovich | January 28