Sometime back, I coined the term \u201cCassandrafreude.\u201d\u00a0 A compound of \u201cCassandra\u201d and \u201cschadenfreude,\u201d it means \u201cthe bitter pleasure derived from seeing someone else suffer in the way you predicted even though you are getting screwed yourself.\u201d<\/p>\n
I am experiencing a healthy dose of Cassandrefreude watching FCC Commissioners McDowell and Baker push the FCC to preempt state data collection of broadband deployment. The matter came up when the FCC issued a Declaratory Ruling<\/em> findng that nothing in federal statutes or previous FCC orders stops states from collecting their own information about broadband deployment. The ruling expresses no opinion about whether state PUCs have existing authority (given that broadband is a Title I “information service”) or whether or not it would be a good idea for states to collect their own data. But even this specter that someone somewhere might do something carriers don’t like prompted Republicans McDowell and Baker to push for the FCC to preempt state authority to collect information. After all, as we all know, broadband providers are timid creatures and likely to be scared off by the least thing that could conceivably raise their cost of doing business — as the broadband providers themselves constantly remind us.<\/p>\n I\u2019ll zip past the usually irony of Republicans who supposedly venerate federalism and demand record evidence before the FCC contemplates action to protect consumers sounding the alarm bell that unless the FCC rushes to preempt state governments, it will mean the end of broadband investment as we know it. Lets get right to the juicy part that fills me with such unbridled Cassandrafreude.<\/p>\n Under what authority, exactly, would the FCC preempt state collection of broadband data?<\/strong><\/em><\/p>\n As we all know from the Comcast case, broadband is (at the moment) an \u201cinformation service.\u201d To the extent the FCC has authority pertaining to broadband, it flows from the FCC\u2019s \u201cancillary jurisdiction\u201d under Title I of the Communications Act. For the FCC to actually exercise its ancillary authority under the standard set forth in Comcast<\/em>, it must show how the exercise of authority relating to broadband relates back to an explicitly delegated authority under Title II, Title III, Title VI, or some other relevant statute. As McDowell in particular never misses an opportunity to wax eloquent about, the D.C. Circuit firmly clipped the FCC\u2019s wings with the Comcast<\/em> decision. No “roaming commission to do good.” Any exercise of FCC authority must undergo extensive, rigorous, fact-based analysis, then stand up to the whithering stare of the DC Circuit.<\/p>\n But as we all know, one side\u2019s outrageous regulatory overreach is another side\u2019s appropriate exercise of a lawful Congressional delegation. So McDowell and Baker, who insist that the FCC lacks a sufficient record to justify net neutrality rules after a several million Comcast subscribers had their service degraded for more than a year until the FCC ordered it to stop, think the FCC ought to (\u201caggressively\u201d) preempt the states on broadband data collection because it might have some sort of \u201cnegative impact\u201d on providers willingness to invest. I confess, I have trouble envisioning Verizon or Comcast saying \u201cwe were all set to build out a rural broadband network with 100 Mb to the home just like the National Broadband Plan says, but because the state makes us file a form, we\u2019re not going to bother \u2013 so there!\u201d But let us assume for the sake of argument that a proper record could indeed establish that state reporting requirements might deter some investment in broadband.<\/p>\n Under what authority, exactly, do McDowell and Baker believe the FCC could preempt state reporting requirements? Remember, we\u2019re not in nasty old bad bad utterly inappropriate Title II \u2013 that regulatory fossil designed only for the long-past age of voice and Ma Bell \u2013 with its broad grants of authority and explicit preemption power for interstate traffic. We are in sleek, modern, just-perfect-for-all-things-broadband Title I. So how, using the Comcast<\/em> analysis, does the FCC find that \u201caggressively\u201d preempting state reporting requirements for broadband information services links back to a direct delegation of Congressional authority needed to carry out a \u201cstatutory responsibility\u201d (rather than a mere \u201cpolicy statement\u201d) under Title II, III, or VI?<\/p>\n We\u2019ll start with the text of the FCC Declaratory Ruling<\/em>.<\/a> The Declaratory Ruling<\/em> boldly asserts (at Par. 6): \u201cUnquestionably, the Commission possesses the authority to preempt State regulations in certain circumstances.\u201d True. But do any of those delegations cover state collection of broadband data? The relevant footnotes cite Section 251 and Section 253 \u2013 both of which state explicitly that they apply to telecommunications services (which is why they are located in Title II). Applying the Comcast<\/em> analysis, the FCC must show how preempting state reporting requirements for Title I broadband services is \u201creasonably ancillary\u201d to carrying out its responsibilities under Section 251 or Section 253.<\/p>\n Section 251<\/a> deals with the general obligation of all \u201ctelecommunications providers\u201d to provide interconnection to other \u201ctelecommunications providers.\u201d It gives the FCC explicit power to preempt any state regulation \u201cinconsistent\u201d with this obligation. It is hard to see how state broadband reporting requirements interfere with the duty of telecommunications carriers<\/em><\/strong> to interconnect \u2013 at least in a way that would not also allow the FCC to impose network neutrality rules (which far more directly address the duty of carriers to interconnect than any state reporting requirement).<\/p>\n Section 253<\/a> at least directly addresses state law rather than telecommunications carriers — a plus for preemption purposes here. Unfortunately for McDowell and Baker, the only laws prohibited by Section 253 are those that \u201cprohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications<\/em><\/strong> service.\u201d Again, even if one accepted as a general rule that \u201chaving the effect of prohibiting\u201d entities from offering service included anything that raised the cost of providing service, such as providing mandatory reports, how does prohibiting reporting requirements on Title I broadband service prevent entities from offering telecommunications<\/em><\/strong> service? (We\u2019ll pass over Section 253(b) which explicitly states that this prohibition does not apply to \u201ccompetitively neutral\u201d laws that \u201cpreserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers.\u201d)<\/p>\n The Declaratory Ruling<\/em> also considered the Broadband Data Improvement Act (BDIA). Could that serve as a source for preempting separate state reporting requirements? As the FCC\u2019s Order noted, however, the BDIA orders the FCC\u00a0 to \u201crecognize and encourage complementary State efforts to improve the quality and usefulness of broadband data\u201d (47 U.S.C. 1301(4)). More to the point, the BDIA also says that nothing in the BDIA confers any regulatory over broadband (Sec. 1304(j)), the kind of provision the Comcast<\/em> court repeatedly found prohibits a statute from serving as the basis for ancillary authority.<\/p>\n This is not to say that the FCC could not preempt under Title I, provided<\/em><\/strong> it could find an appropriate basis under the Comcast<\/em> \u201cancillary authority\u201d test. In fact, three cases cited by the Comcast<\/em> court dealt explicitly with preemption of state authority. In CCIA<\/em>, the FCC preempted state regulation of pricing of customer premise equipment (CPE). However, as the Comcast<\/em> court explained, the FCC acted there to ensure that the rates for Title II phone service were \u201cjust and reasonable\u201d under Section 201<\/a>. It\u2019s hard to see how preempting reporting requirements for broadband is necessary to ensure \u201cjust and reasonable rates\u201d for telecom service, unless the FCC can say that anything that impacts broadband also impacts Title II rates.\u00a0 In which case the same logic would extend ancillary authority to network neutrality rules.<\/p>\n