Lawsuit: Net Neutrality Regulations are Unconstitutional

Lawsuit: Net Neutrality Regulations are Unconstitutional
July 24, 2012

Jim Lakely

Jim Lakely is director of communications at The Heartland Institute, co-director of Heartland’s... (read full bio)
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A group of free-market think tanks Monday filed a brief in federal court challenging the constitutionality of the Federal Communication Commission's 2011 "Preserving the Open Internet" Order.

The group's amici curiae brief says the FCC's rule denies Internet service providers their constitutional rights and forces consumers to "bear the costs of building tomorrow’s networks, foreclosing novel business models in which content companies share part of that burden."

The constitutional challenge to the FCC's net neutrality authority — claimed by the agency without Congressional approval — was filed in the Court of Appeals for the D.C. Circuit by TechFreedom, the Competitive Enterprise Institute, the Free State Foundation, and the Cato Institute.

Listen to a podcast about net neutrality.

Violations of First, Fifth Amendments

Ryan Radia, associate director of the Center for Technology & Innovation at the Competitive Enterprise Institute, said the FCC's net neutrality rule violates both the First and Fifth Amendments.

"It compels Internet providers to speak and deprives them of their property rights without just compensation," Radia said. "The problems the rule purports to solve are theoretical, but its impact on constitutional rights will be very real.

"Net neutrality regulation denies Internet providers their First Amendment right to choose what speech to allow on their networks, effectively compelling providers to convey all content companies' messages—for free," he said. "Granting content companies nearly unfettered, free use of Internet providers' private networks amounts to a permanent 'virtual easement'."

The case is Verizon v. FCC (D.C. Cir. No. 11-1355) and the amicus brief is available here.

Genachowski's Intent

FCC Chairman Julius Genachowski declared his intent to implement net neutrality regulations soon after his appointment by President Barack Obama in 2009. The DC Circuit Court of Appeals in April 2010 ruled the FCC did not have the authority to implement net neutrality rules without explicit authority from Congress. The FCC nonetheless implemented the rule by a 3-2 vote.

The brief also rejects the FCC's claims of "ancillary" jurisdiction to regulate matters beyond what Congress has specifically assigned to the agency.

"We're asking the Court to rein in an agency that it's previously criticized for making sweeping claims of authority that would 'virtually free the Commission from its congressional tether,'" said Berin Szoka, President of TechFreedom. "There's no evidence to support the FCC's view that broadband and content providers are fundamentally at odds. But if broadband operators ever do abuse market power by blocking access to competitors, that's a problem existing antitrust laws can address.

"Those who think current antitrust mechanisms work too slowly should dust off the Digital Age Communications Act, a compromise proposal offered by The Progress & Freedom Foundation in 2005, allowing the FCC to issue rules on the basis of antitrust standards," Szoka said. "But if the FCC can simply invent authority to regulate the Internet today, there is no limit to what it might do tomorrow."

Net Neutrality Regs 'Unwise'

John Elwood and Eric White of Vinson & Elkins LLP served as pro bono counsel on this brief, as they did on an amicus brief in which TechFreedom joined with CEI and Cato last year, challenging the FCC's indecency regulations.

Free State Foundation President Randolph May said he has argued for many years "that it would be unwise as a matter of policy for the FCC to adopt net neutrality regulations."

"At the same time, I also argued that the FCC's action would be unlawful, even unconstitutional," May said. "This amicus brief explains clearly why this is so, and I am optimistic the court will find it persuasive."

Read The Heartland Institute's coverage of net neutrality at PolicyBot.

Some excerpts from the brief are below.

On the First Amendment:

"By denying Internet service providers their editorial discretion and by compelling them to convey content providers' messages with which they may disagree, the Order violates broadband providers' First Amendment rights. ...

"[F]ar from being narrowly tailored, the Order establishes a blanket right of access. Nothing justifies the FCC's regulation of the speech of Internet service providers, let alone by the sweeping means adopted here."

On the Fifth Amendment:

"The Order also violates the Fifth Amendment's prohibition on takings without just compensation: it works a per se taking by giving content providers a permanent easement for nearly unfettered use of network owners' physical property (the cables and wires constituting their networks). ... 

"The Order deprives network owners of their traditional right to exclude others from, and control the use of, their property." On the lack of statutory authority: "Finally, the FCC's assertion of "ancillary authority" to regulate the Internet arrogates a boundless, and therefore dangerous, amount of power to itself."

Jim Lakely (jlakely@heartland.orgis communications director and the co-director of the Center on the Digital Economy at The Heartland Institute.

Internet info:

Neutralism: The Strange Philosophy Behind the Movement for Net Neutrality, Jim Lakely, The Heartland Institute, (2009). 

Net Neutrality Mandates: Neutering the First Amendment in the Digital Age, Randolph J. May, 3 I/S: A J. of Law and Pol’y for the Info. Soc’y 198, 209 (2007)

Virtual Takings: The Coming Fifth Amendment Challenge to Net Neutrality Regulation, Daniel Lyons, 86 Notre Dame L. Rev. 66, 97 (2011).

Jim Lakely

Jim Lakely is director of communications at The Heartland Institute, co-director of Heartland’s... (read full bio)