Technological and marketplace convergence, leading to an IP-centric infrastructure, has the potential to eliminate the middleman--disintermediation in the vernacular. We have begun to see this outcome at the margin as some cable television subscribers terminate their video subscription while retaining their broadband access. My nomadic students have little use of "appointment television," i.e., scheduled broadcasts of content. But they increasingly see little value in having the subscriber right of access to particular content. They have every expectation that the content source will make it available for streaming access, e.g., vbia Hulu, or that someone will illegally make the content readily available.
So who needs cable when consumers have little use for schedules or certain access? Comcast and others recognize the need to accommodate consumers' expectation that if they pay for access it better be available just about any time, via any device. Content distributors and sources balk at accommodating via any format, because of the risk of piracy.
Recently television broadcasters' spectrum has been targeted as a potential source for more mobile wireless bandwidth. In light of the fact that only 9% of the television viewing public relies on the free to air source the spectrum may be in play. If so, would local broadcasters suffer disintermediation, because the networks would not need them to reach consumers, or would local broadcasters strike deals with ISPs and establish their own web sources of content?
One should never underestimate the power of incumbency and efforts by incumbents to safeguard their intermediary status. The National Association of Broadcasters has provided local broadcasters with a public service announcement that emphasizes "free" and "local." Never mind that 91% of the audience rely on a multinational intermediary.
Friday, January 15, 2010
Monday, January 11, 2010
Agency Deference or Strict Statutory Construction—Conflicting Case Precedent
Many observers expect the D.C. Circuit Court of Appeals to vacate the FCC’s attempt at fashioning federal Internet policy when it reprimanded Comcast for the company’s violation of the 4 Internet Freedoms. The Commission did not use a notice and comment rulemaking confident that it has both direct and ancillary jurisdiction to impose a policy statement that it subsequently construes as establishing enforceable rules.
In many reviews of bold and creative interpretations of the Commission’s statutory authority, courts seem to go out of their way to defer to agency expertise. But in other cases reviewing courts are sticklers for explicit statutory authority. How can one predict which model applies?
A good example of the deference model is Justice Thomas’ majority opinion in National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005) where the Supreme Court affirmed the FCC’s classification of cable modem broadband access as an information service. A good example of the strict construction model are the several cases where the FCC sought to allow long distance carriers to withdraw tariffs even in the absence of legislative repeal of the explicit requirement that carriers file tariffs; see MCI Telecommunications Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985); American Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992); MCI Telecommunications Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (1994).
It’s easy for an uncertain court to defer to agency expertise: what better way to avoid claims that the court has legislated from the bench. But it’s also easy and enticing for a court to rebuke an agency’s bold attempt to expand its regulatory wingspan. The FCC will claim that the Communications Act requires flexibility in light of technological innovation. But it’s predictable that a regulator can perceive the need to protect the public by interpreting a public interest mandate and broad authority to regulate wire and radio services to include the Internet, which we know is an amalgam of networks, but also content, applications and software.
How can a court hold a line or draw one between regulated Internet subjects and unregulated ones? The Commission, with approval by Justice Thomas, creates a sometimes metaphysical difference between carrier offering of telecommunications capabilities as a subordinate aspect of an information service and providing telecommunications services. Justice Thomas got into a war of competing analogies with his usual soul mate Justice Scalia who offered this skeptical assessment of the FCC’s jurisdictional claim: an “experienced agency can (with some assistance from credulous courts) turn statutory constraints into bureaucratic discretions,” reserving, for example, the option of regulating Internet content based on statutes offering absolutely no basis for anything beyond promoting Internet access.
In many reviews of bold and creative interpretations of the Commission’s statutory authority, courts seem to go out of their way to defer to agency expertise. But in other cases reviewing courts are sticklers for explicit statutory authority. How can one predict which model applies?
A good example of the deference model is Justice Thomas’ majority opinion in National Cable & Telecommunications Ass’n v. Brand X Internet Services, 545 U.S. 967 (2005) where the Supreme Court affirmed the FCC’s classification of cable modem broadband access as an information service. A good example of the strict construction model are the several cases where the FCC sought to allow long distance carriers to withdraw tariffs even in the absence of legislative repeal of the explicit requirement that carriers file tariffs; see MCI Telecommunications Corp. v. FCC, 765 F.2d 1186 (D.C. Cir. 1985); American Tel. & Tel. Co. v. FCC, 978 F.2d 727 (D.C. Cir. 1992); MCI Telecommunications Corp. v. American Tel. & Tel. Co., 512 U.S. 218 (1994).
It’s easy for an uncertain court to defer to agency expertise: what better way to avoid claims that the court has legislated from the bench. But it’s also easy and enticing for a court to rebuke an agency’s bold attempt to expand its regulatory wingspan. The FCC will claim that the Communications Act requires flexibility in light of technological innovation. But it’s predictable that a regulator can perceive the need to protect the public by interpreting a public interest mandate and broad authority to regulate wire and radio services to include the Internet, which we know is an amalgam of networks, but also content, applications and software.
How can a court hold a line or draw one between regulated Internet subjects and unregulated ones? The Commission, with approval by Justice Thomas, creates a sometimes metaphysical difference between carrier offering of telecommunications capabilities as a subordinate aspect of an information service and providing telecommunications services. Justice Thomas got into a war of competing analogies with his usual soul mate Justice Scalia who offered this skeptical assessment of the FCC’s jurisdictional claim: an “experienced agency can (with some assistance from credulous courts) turn statutory constraints into bureaucratic discretions,” reserving, for example, the option of regulating Internet content based on statutes offering absolutely no basis for anything beyond promoting Internet access.
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