Comcast Corporation v. FCC

Comcast v. Federal Communications Commission

Comcast Corp. v. FCC, 2010 U.S. App. LEXIS 7039 (D.C. Cir. Apr. 6, 2010)

Facts of the Case

In 2007, many subscribers of Comcast’s internet services discovered that the company was interfering with their use of peer-to-peer networking programs. A complaint was filed with the Federal Communications Commission by two nonprofit advocacy groups, Free Press and Public Knowledge, along with several public interest groups and law professors seeking a declaratory ruling. After a period of public comment, the Commission issued an order that is challenged in the case at hand. The order stated that the Commission had jurisdiction over Comcast’s network management practices, and that it could resolve the dispute through adjudication rather than through rulemaking. The Commission concluded that Comcast had “significantly impeded consumers’ ability to access the content and use the applications of their choice.” Further, the Commission stated that because Comcast “had several available options it could use to manage network traffic without discriminating against peer-to-peer communications, its method of bandwith management contravened federal policy.” At the time the order was handed down, Comcast had already agreed to new bandwith management practices, which the Commission ordered Comcast to make a set of disclosures describing the details of its new approach and how the company was progressing toward implementing it. If Comcast failed to provide such information an injunction would automatically be issued against the company’s actions. Though Comcast complied with the order, it petitioned the U.S. Court of Appeals for the District of Columbia Circuit for appeal on three issues. First, that the Commission failed to justify use of its jurisdiction in Comcast’s network management practices. Second, the Commission’s adjudicatory action violated the requirements of the Administrative Procedure Act and violated the notice requirements of the Due Process Clause. Third, certain parts of the Order are arbitrary and capricious.

Procedural Posture

Two nonprofit advocacy groups filed a complaint with the Federal Communications Commission seeking a declaratory ruling. After a public comment period, the Commission issued an Order to which it stated Comcast’s practices contravened public policy and ordered Comcast to make disclosures of their current network management practices and how they were being implemented. If Comcast failed to comply with the Order an injunction was automatically to be issued against the company’s actions. Though Comcast complied with the Order, it appealed to the U.S. Court of Appeals for the District of Columbia for review on three issues.


The Court of Appeals held that the Commission failed to make a showing that it’s actions in attempting to bar Comcast from managing its customers’ use of peer-to-peer networking programs were “reasonably ancillary to the . . . effective performance of its statutorily mandated responsibilities.” In holding, the Court applied to two-prong test from American Library Ass’n v. FCC where the Court stated: “The Commission . . . may exercise ancillary jurisdiction only when two conditions are satisfied: (1) the Commission’s general jurisdictional grant under Title I of the Communications Act covers the regulated subject and (2) the regulations are reasonably ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.”


The Court focused mainly on the second prong of the test from American Library. Comcast conceded that the Commission’s actions satisfied the first prong, because the internet service provided by Comcast constitutes interstate communication within the meaning of Title I of the Communications Act. Before addressing the issue of the second prong, the Court first looked at two arguments put forth by the Commission. First that Comcast was judicially stopped from seeking relief because its position in this case was contrary to the position it took in a previous lawsuit in California; and second that even if Comcast’s challenge can proceed, the Supreme Court has already determined that the Commission had authority to issue the Order.

In the first argument, the Commission raises the issue of the contrary position Comcast took when a lawsuit was filed in federal court in California at the same time Free Press and Public Knowledge had filed their complaint with the Commission. The lawsuit was challenging the same interference with peer-to-peer networking applications. Comcast moved to stay the litigation pending outcome of the Commission’s findings. It argued that the Commission had “subject matter jurisdiction” over the practices being questioned. The Commission argued that when Comcast made that argument they were conceding that any action by the Commission to stop those practices would satisfy both prongs of the American Library test, thus falling within the ancillary authority of the Commission. The Court dismisses this argument, agreeing with Comcast, that when making that argument they were simply stating that “communication by wire” satisfies the first requirement of the American Library test.

The second argument, the Commission argues that the Supreme Court, in National Cable & Telecommunications Ass’n v. Brand X Internet Services (545 U.S. 967) the Supreme Court in dicta stated that the Commission has ancillary authority to impose special regulatory duties on cable internet providers under Title I. The Court found this was contradictory to holdings in previous cases, namely Southwestern Cable and Midwest Video I. Essentially the Court held in those cases that the Commission does have regulatory power over cable television through Title I, but that power and regulation using ancillary power must be evaluated on its own terms on a case by case basis.

In arguing that the second prong of the American Library test was satisfied, the Commission says that actions taken must be “reasonably ancillary to the Commission’s effective performance” of its responsibilities under various provisions. The Commission gives two categories for these provisions, those that set forth only congressional policy and those that actually delegate regulatory authority to the Commission. First the Commission argues that Comcast’s network management practices frustrated the policies if 47 U.S.C. §230(b), which states “it is the policy of the United States . . to promote the continued development of the internet and other interactive computer services” and “to encourage the development of technologies which maximize user control over what information is received by individuals, families, and schools who use the internet.” Comcast argued that those are statements of policy and not actual statements of regulatory power. The Court agreed and found that statements of policy by themselves do not confer power. The Court stated that the Commission did not cite §230(b) to show any express statutory delegation of authority found in other Titles or anywhere else. In assessing the second category, provisions that actually delegate regulatory authority to the Commission, Court looked at section 706 of the Telecommunications Act of 1996. While the language of that section seems to support the Commission’s argument, an earlier order stating that section 706 “does not constitute an independent grant of authority.” The Commission had never before questioned this earlier order that the Court found no reason to indulge such an argument now. The Commission also raised arguments under section 257 and 201 for using their ancillary power, both of which the Court rejected. The Commission also argued that when Comcast instituted its practices it disrupted the used of voice over Internet Protocal, which the Court declined to address. In sum, the Commission failed to show that its assertion of this ancillary authority over Comcast was substantiated by any statutorily mandated responsibility.

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