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Ancillary Jurisdiction Theory

GOP Panel Counsel Sees Good Chance Hill Would Send Obama Neutrality Override Measure

A measure to block net neutrality rules has a very good chance of clearing Congress and confronting the president next year, even with the Senate remaining in Democratic hands, the Republican counsel to the House Communications Subcommittee said Thursday. A resolution under the Congressional Review Act to nullify the rules and bar any similar ones would be filibuster-proof and require only a simple majority vote of each house of Congress, said Neil Fried, the subcommittee’s senior minority counsel. Congress would have 60 days early next year to adopt the resolution, he said on a panel in Washington of the American Bar Association’s antitrust section.

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President Barack Obama is “not likely to sign” the measure, Fried acknowledged. But refusing to approve it would require the president to revive a campaign plank of supporting net neutrality that hasn’t served him well since he ran on it in 2008, Fried said. And this would be ahead of 2012 elections for many Democratic Senate seats held by incumbents “worried about challenges from the right,” he said.

Fried laid out the prospect that the resolution would be only part of a barrage of Republican congressional attacks next year against any neutrality rules that the FCC adopts at its Dec. 21 meeting. There’s a good chance of “hearings pretty early in the next Congress,” along with bills to ban rules by the commission on the subject directly and to deny appropriations to enforce them, he said. Fried noted that all four candidates in the race for the House Commerce chairmanship have said they're “not happy” with the FCC’s course and they'll look into legislative and oversight options against it.

It’s still not clear how or whether the commission will act on net neutrality, Fried said. He said FCC Chairman Julius Genachowski hasn’t lined up the majority support that his proposal needs. “We don’t have three votes for anything,” Fried said, and that means “another 21 days of negotiating.” He said Genachowski is arranging for commission action “at the last minute, when no one’s looking.” Fried added, I don’t think much can be done this Congress” against commission rules, with time so short.

"The FCC continues to show it has no clothes,” Fried said. Throughout, the commission has shown determination to impose neutrality regulations on some companies but not others, without regard to its legal authority and refusing to produce the market analysis needed to show that rules are justified, he said.

Glenn Manishin of the Duane Morris law firm said there’s a strong case in defense of the proposed neutrality rules under the FCC’s ancillary jurisdiction, despite the Comcast decision. With Internet Protocol technologies swallowing the previous forms of electronic communications, if everything that goes by IP and over the Internet is outside the commission’s jurisdiction, “there will be nothing left for FCC to touch under Title II as telecom or Title III as television,” he said. This theory would provide precisely the connection between the FCC’s statutory authority and what it considers the need to regulate the Internet that the court in Comcast found lacking, Manishin said.

The argument might satisfy both supporters and opponents of neutrality legally, though both are dissatisfied with the substance of Genachowski’s proposed rules, Manishin said. With any luck, the FCC will appreciate that discretion is the better part of valor in Internet regulation, he said. But that would require resisting the “protectionist” impulse that historically has underlain assertions of ancillary jurisdiction -- “to stop the new” in defense of incumbents, in this case to “strangle Internet Protocol,” Manishin said.

Fried said the companies that the FCC is protecting in what he considers an unprincipled way are Internet ventures such as Google and Skype. “Net neutrality is defined at every turn as regulating ISPs and only ISPs, regardless of whether they have market power,” he said.

FCC rules wouldn’t be stayed in court, Manishin predicted -- as long as the commission doesn’t rely for authority on Section 706 of the Telecom Act, requiring it to promote broadband deployment. There’s “not a chance” that net neutrality will be a settled matter in a year, he said. Parul Desai, Consumers Union policy counsel, agreed on both points. Consumers Union and the Computer & Communications Industry Association (CCIA) are among Manishin’s clients involved with net neutrality, the lawyer said, adding that he was speaking for himself. Attention to the matter in Congress and elsewhere will come at the expense of carrying out the National Broadband Plan, Fried said. “We continue to bang our heads, and that is slowing us down.”

Reclassification of Internet access under Title II remains the only way to carry out net neutrality, along with the broadband plan’s goals, Desai and President Lee Selwyn of Economics and Technology consulting insisted. Desai said she has “no idea how the FCC will” proceed “under Title I.” And she said she doesn’t know where Consumers Union will come down on Genachowski’s proposed rules. Cathy Sloan, the CCIA’s vice president of government relations, said from the audience that she agreed with almost everything Desai and Selwyn had said. She also agreed with Fried, though, that the commission has been unresponsive to Congress.