FCC Inconsistency Benefits Law Enforcement In VoIP/Broadband Decision

Recently, the U.S. Court of Appeals for the D.C. Circuit addressed a controversial 2005 order of the Federal Communications Commission in American Council on Education v. FCC, a decision which denied a petition for review of an FCC ruling that providers of broadband Internet access and voice over Internet protocol ("VoIP") services are regulable as "telecommunications carriers" under the Communications Assistance for Law Enforcement Act ("CALEA").

Overview and History of the August 5, 2005 FCC Order: In the Matter of Communications Assistance for Law Enforcement Act and Broadband Access and Service

Predating the instant case, the Supreme Court decided the Brand X decision1, a pivotal moment in telecommunications law. In Brand X, the Supreme Court held that the FCC's ruling under the Telecommunications Act of 1996 that classified broadband cable modem service as an 'information service' because Internet access was a capability for manipulating and storing information, but not a 'telecommunications service,' due to the integrated nature of such access and the high-speed wire used to provide it," was reasonable and deserved greater deference as an agency ruling.2

This Supreme Court ruling meant that broadband internet service providers would not have to comply with the CALEA and adapt the technology to allow law enforcement electronic surveillance.3

Of a more significant note, the dissent by Scalia provided some much needed clarity and a view which can be best summed up by the language in the opinion which states, "The Federal Communications Commission (FCC or Commission) has once again attempted to concoct "a whole new regime of regulation (or of free-market competition)" under the guise of statutory construction."4 Many analysts and commentators agree with Justice Scalia and feel that the FCC's power to classify technological services to comply with government legislation could end up limitless.

On August 5, 2005 the FCC adopted a proposed order entitled "In the Matter of Communications Assistance for Law Enforcement Act and Broadband Access and Services."5 ("Order") The FCC Order attempted to resolve any vague language or ambiguities that both the CALEA and Telecommunications Act of 1996 contained regarding the terms "information services" and "telecommunications services."

The FCC ordered that broadband Internet access and voice over internet protocol ("VoIP") service providers could be regulated as "telecommunications carriers" under CALEA.6 By classifying these service providers as regulated by CALEA, they would have to comply with law enforcement and assist in adapting the technology so as to be electronic surveillance compliant.

American Council on Education and The August 5, 2005 FCC Order

When the FCC adopted the Order in August 2005, the impact was immediately felt on certain organizations, including private educational institutions. One group, the American Council on Education ("Plaintiff") challenged that the Order and the interpretation by the FCC as unlawful.7 The Plaintiff(s) challenged the Order as illicit because it would force many research institutions and corporations who run private networks to incur substantial costs in modifying their current technology to accommodate electronic surveillance, as required by CALEA.8

The Court, however -- even with a seemingly more alternatively plausible argument from the Plaintiff -- was compelled to give deference to the agency's construction of CALEA, since it was reasonable and is in contrast to what the court feels is the best statutory interpretation.9 Based on a 2-1 decision, the Court held that the FCC was not overstepping its boundaries by proposing the Order and reclassifying broadband internet services.10

The Plaintiff advanced three arguments which it felt warranted greater judicial deference in overturning the Order: 1) "broadband Internet access is an integrated 'information service' under CALEA, and as such, it is uniformly excluded from the Act's substantive requirement," 2) "VoIP similarly qualifies for CALEA's information-services exclusion," and 3) the FCC unlawfully applied the Act to 'private networks.'11

As to Plaintiff's first argument, the Court noted that based on the Brand X decision, the Supreme Court has upheld broadband as being classified as an integrated information service under the Telecom Act of 1996.12 The Court held that this argument was in error as the Telecom Act of 1996 and CALEA are different statutes and that the Brand X decision upheld the FCC's reasonable interpretation of the term "information service" under the Telecom Act.13

For the Plaintiff's second assertion, the Court quickly dismissed it as Plaintiff's counsel clarified that it would not challenge the merits of VoIP's classification in one category to the other.14

Plaintiff's final argument was debunked by the Court because the Order was a proposed rule, and not a final rule.15 Plaintiff feared that the language in the order which stated that "providers of the facilities that support the connection of the private network to a public network are subject to CALEA under the SRP," would subject the Order to extend its regulatory authority throughout an entire private network.16 The Court noted that after further review, the Order, like CALEA, expressly excluded private networks form its reach.17

The dissenting opinion, by Judge Edwards, contains some very harsh words for the FCC: "In determining that broadband Internet providers are subject to CALEA as 'telecommunications carriers,' and not excluded pursuant to the 'information services' exemption, the Commission apparently forgot to read the words of the statute."18

Moreover, Justice Edwards believes that the FCC is not congressionally authorized to implement the Order's view and that it is an "agency attempting to squeeze authority from a statute that does not give it."19 Finally Justice Edwards cites a very surprising part of CALEA in 1002 which expressly states that "that statute's assistance capability requirements 'do not apply to information services."20

Conclusion

Through all of the Court's arguments, one theme is very clear: inconsistency. As objective as this author would like to be, the very notion that the FCC seems to be flip-flopping and finding ways around case precedent, such as the Brand X decision, is very troubling. By interpreting a statute as to force those who were once exempt from CALEA and the Telecom Act of 1996, and proposing a new order to circumvent these legislative authorities, is to instill more doubt in the government's ability to abide by its own rules.

Endnotes

  1. Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 125 S. Ct. 2688 (U.S. 2005)
  2. See generally id.
  3. Id.
  4. Id. at 2713.
  5. 20 FCC Rcd 14989 (FCC 2005).
  6. Am. Council on Educ. v. FCC, 2006 U.S. App. LEXIS 14174 (D.C. Cir. 2006) (quoting Citizens Coal Council v. Norton, 356 U.S. App. D.C. 214 (D.C. Cir. 2003).
  7. Id.
  8. Id.
  9. Id.
  10. Id.
  11. Id.
  12. Id.
  13. Id.
  14. Id.
  15. Id.
  16. Id.
  17. Id.
  18. Id.
  19. Id.
  20. Id.

Courtesy of Konrad Trope.