World Of Gadget

Almost a year ago, Comcast pledged that it would sue the Federal Communications Commission over its Order sanctioning the cable ISP for peer-to-peer throttling. Now, the company has filed its case with the United States Court of Appeals for the District of Columbia Circuit. Although Comcast’s legal arguments are complex, the crux is simple: there were and still are no statutes or credible regulations that support the Commission’s authority to act on this matter, the company says.

“For the FCC to conclude that an entity has acted in violation of federal law and to take enforcement action for such a violation, there must have been ‘law’ to violate,” Comcast’s Opening Brief to the court contends. “Here, no such law existed.”

Undoubtedly, many parties will soon file with the court in opposition to and agreement with Comcast’s legal claims. But Comcast had to file first. Here’s a summary of what they say the FCC did wrong in punishing the company.

Doing so 24/7

First, let’s recap: After months of proceedings, hearings, and investigations, the FCC concluded on August 1, 2008 that Comcast was discriminating against certain P2P applications using deep packet inspection techniques. These methods thwarted the ability of users to share video and other files via BitTorrent. “Comcast was delaying subscribers’ downloads and blocking their uploads,” declared then FCC Chair Kevin Martin. “It was doing so 24/7, regardless of the amount of congestion on the network or how small the file might be. Even worse, Comcast was hiding that fact by making effected users think there was a problem with their Internet connection or the application.”

Comcast had an anti-competitive motive for this behavior, the Commission argued, as P2P apps offer consumers a video sharing alternative to cable television. The agency told the company to stop its current practices, disclose what it was actually doing, come up with a new, non-discriminatory system by the end of the year, and let consumers know how the new system will work. The company quickly complied with these orders, and announced the deployment of a new “protocol agnostic” network management system in mid-September.

But months earlier, Comcast Vice President David Cohen had warned the FCC that, in the ISP’s opinion, there was no statutory basis for the actions the agency eventually took. What the company has sent to the DC Circuit Court is an extended version of that letter: no law backs the FCC ruling about Comcast.

“If the Commission truly believed that any statutory provision was directly enforceable against Comcast’s conduct, it would not have premised the Order entirely on ancillary authority,” Comcast writes. “Ancillary authority”—what the hell does that mean?

Ancillary madness

As this legal debate heats up again, you can expect to see the following narcoleptic-coma-inducing question repeatedly asked and debated. Does Title I of the Communications Act gives the FCC “ancillary authority” or “ancillary jurisdiction” over network management issues?

People get thrown by the word “ancillary” here. It essentially means an additional, supplementary, or implied power. Title I outlines the FCC’s job. It’s there “for the purpose of regulating interstate and foreign commerce in communication by wire and radio,” Title I says. And section 230(b) of Title I adds that it is the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet” and “to promote the continued development of the Internet.”

This Title I authority played a large part when the FCC invoked its famous Internet Policy Statement, which plays a big role in the Comcast drama. That’s the 2005 declaration that consumers are entitled to access the lawful Internet content of their choice and are entitled to competition among network providers. In its Comcast Order, the Commission explained that it created the statement in recognition of “its responsibility for overseeing and enforcing the ‘national Internet policy’ Congress had established in section 230(b) of the Communications Act.” The agency was now committed to integrating the Policy Statement into its ongoing policy-making work, it declared.

Show us the rules

So the obsessive-compulsive question for legal beagles is whether Title I gives the FCC the legal cajones to stomp ISPs if they block your efforts to download the movie trailer for District 9 via BitTorrent, Vuze, or some other P2P app. The consumer groups that petitioned the FCC to do something about Comcast’s behavior say that Title I granted the FCC all the authority it needed to act in this situation. Free market groups like the Progress and Freedom Foundation contend this ancillary authority business is way too vague to be used in something as crucial as regulating network management. PFF calls it a “standardless discretion” contrary to “the foundational principle that agencies only have that authority conferred by Congress, which ensures accountability.”

Defenders of the FCC push back, saying that even the Supreme Court recognized ancillary authority in the Brand X decision, a crucial ISP access case, and that Title I has been used repeatedly. Critics say yeah, sure, but only under certain strict circumstances. We leave it to you to follow the rabbit hole down as far as you’d like on this question. The bottom line is that Comcast, as you’ve probably already guessed, argues that Title I doesn’t give the FCC diddley when it comes to overseeing ISPs.

“Section 230(b) does no more than set forth ‘the policy of the United States,’” Comcast notes. “It does not even remotely establish mandatory standards of conduct” for regulating network management. That means, Comcast charges, that the FCC pretty much cracked down on the company’s behavior based on a Policy Statement that was not created by Congress, and which, well, was basically just a policy statement.

Where is this going?

Comcast’s filing even denies that it did anything wrong in the first place, network management-wise. “To prevent P2P usage from degrading all of its customers’ Internet experiences,” the company says for the umpteenth time, “Comcast managed, in limited circumstances and in a limited manner, those P2P protocols that had an objectively demonstrated history of generating excessive burdens on its network. Specifically, it temporarily delayed certain P2P uploads (but not downloads), on a content-agnostic basis.”

But it’s unclear what the cable giant and its supporters think they will accomplish by this aggressive effort to overthrow the FCC’s decision. As veteran telecom attorneys like Andrew Lipman have noted, if the courts do shut down the FCC’s order on Comcast, “expect Congress to move very quickly” on some kind of net neutrality legislation. The usual suspects on Capitol Hill have already got yet another bill in the hopper, and this time they’re in control of all the key committees in the House and Senate. One wonders whether, in the not too distant future, the big ISPs will look nostalgically back on the happy days when the FCC’s Internet Policy Statement was all they had to obey.

There’s a new battle developing in the bitter war over the Performance Rights Act—proposed legislation that would require terrestrial radio stations to pay royalties to the artists whose songs they broadcast. The Federal Communications Commission has agreed to hear comments on reports that radio station owners are “targeting and threatening artists who have spoken out in favor of the PRA,” with some going so far as refusing to play their music. The FCC is responding to a Petition for Declaratory Relief submitted by the MusicFIRST coalition, a group backed by the Recording Industry Association of America, SoundExchange, and various musicians’ groups.

In addition to accusing radio stations of “engaging in a pattern of threats and intimidation against artists to chill their speech,” MusicFIRST says they are refusing to run the coalition’s ads. All this is part of a coordinated campaign “designed to spread malicious and untruthful information—all in an effort to avoid royalty payment to artists,” the group warns.

Quite a lot to throw at radio—but it appears that the first charge is true, at least in the case of Dalhart, Texas radio station KXIT, which plays oldies, and its panhandle neighbor, country station KIXK-FM. Earlier this month, Inside Radio broke the story that their owner, George Chambers, says he won’t broadcast the tunes of almost 100 PRA supporters. We contacted Chambers, and he told us that he got the list of musicians that he’s banned from MusicFIRST’s pro-PRA artist website.

“I purchase the songs I play, so I will decide what songs I play,” he explained in an e-mail. “Artist that are radio-friendly get airplay.”

Musicians on the list include some country/oldies performers, but it also contains Sheryl Crow, Suzanne Vega, will.i.am of the Black Eyed Peas, the Smashing Pumpkins, and other artists who probably never got much air time on Chambers’ stations in the first place. Still, although it’s worrisome, it’s also unclear how the FCC can respond. There aren’t any hard-and-fast rules that say that radio stations must broadcast certain performers or accept ads regarding controversial legislation or public issues. In the case of ads, the Supreme Court has actually ruled that they don’t.

And there are no knights in shining armor in this story, either. As we’ve reported, it’s definitely big content versus big radio here. Nonetheless, the MusicFIRST petition raises tricky questions about when license owners have crossed the line between broadcasting in the “public interest” and just serving their own.

Not a single station

Much of the petition is based on the testimony of Jennifer L. Bendall, MusicFIRST’s executive director, who has spent recent years as a lobbyist for various media groups, including SoundExchange, Viviendi, and the Motion Picture Association of America. Bendall’s statement cites a variety of instances in which artist intimidation allegedly took place. 

“A representative of a record label told us that a Delaware radio station informed them that it boycotted all artists affiliated with the MusicFIRST coalition for an entire month,” she charges. “A representative of an artist told us that, immediately before going on the air for an interview, the artist was pressured by a Texas radio station to state on the air that the performance rights bill would cripple radio stations.” MusicFIRST says it’s not disclosing the names of these folks, at least at this point, in order to protect them from further discrimination.

In addition, Edelman Communications Vice President Martin Machowsky testified that radio stations are routinely refusing to broadcast MusicFIRST pro-PRA ads. “It is my belief that these broadcasters are rejecting MusicFIRST’s radio spots based solely on the fact that MusicFIRST’s advertisements take a position that is contrary to the private interests of these broadcasters,” his statement in the petition warns. “I based this on the fact that several of the broadcasters have not even asked to listen to the spots and have stated that they are rejecting them because they come from MusicFIRST.” As of the filing of the petition, not a single radio station had accepted a spot from MusicFIRST, Machowsky contends.

MusicFIRST also doesn’t like what big radio routinely says about the PRA over the air and in print—it charges that stations have said it would constitute a “tax” on radio stations (indeed, it’s not; none of the money would go to the government); that the royalties would go to “foreign owned” companies (thousands of US copyright owners would receive payments); and some reports implied that a trio of historically black radio stations were sold to the Catholic church as a consequence of the bill’s approval by the House Judiciary Committee.

We want responsiveness

But even assuming that all this mischief is true, the petition struggles to identify clear legal remedies that the FCC can apply to the problem. As written by Sam Feder, until recently the FCC’s former general counsel, the MusicFIRST appeal hastens to note that it doesn’t want a return of the Fairness Doctrine. But it calls the alleged behavior of these radio stations “anticompetitive,” using their broadcasting power “to gain a competitive advantage over the artists and record companies to whom they would have to pay royalties if Congress passes the PRA.”

Conduct an investigation, MusicFIRST urges the FCC, then declare these alleged shenanigans against the public interest. And then? “The actions of broadcasters described in this petition support the calls for strengthening the license renewal process and shortening license terms in order to better ensure broadcasters’ responsiveness to the public, rather than their private interests,” the petition concludes, citing Commissioner Michael Copps frequent urgings to trim license periods down to three years.

So, what does this mean on a practical level? we asked Machowsky in an interview. “We’ve asked specifically for a few things,” he replied. “We’d like the behavior to stop. And we have asked in the context of the petition that this is information that the FCC should consider in the context of a license renewal. That’s all we’ve said.”

OK, we pressed, but does MusicFIRST want the FCC to revoke the license of George Chambers or some other pro-PRA-artist-boycotting station when its next renewal period comes up? “We want the FCC to consider that in the context of license renewal,” Machowsky said again, and no more.

It’s up to the individual broadcaster

So we went over to the other side and contacted National Association of Broadcasters Executive Vice President Dennis Wharton, who—no surprise here—thinks MusicFIRST’s petition is pretty specious. When it first came out, the group called it the RIAA’s “newest stunt.” Now that the FCC is actually considering an investigation, NAB’s tone has become a bit more circumspect.

“NAB will be commenting on the distortions raised in the musicFirst petition at the appropriate time,” the latest statement says. “Contrary to suggestions in the petition, broadcasters are under no obligation to carry everything that is offered or suggested to them.”

But what about this Chambers fellow and perhaps other boycotters? We asked Wharton whether that sort of behavior is in the public interest.

“I guess I’d respond by saying that it’s up to the individual broadcaster, ultimately, the licensee of the station, to decide what programming is appropriate for the community,” Wharton said. “I also don’t think that it’s some kind of coordinated effort. If indeed there are some broadcasters who are disappointed after having nurtured the careers of many artists, who decide in a moment of anger at performers who’ve come out in support of legislation which they believe threatens the very livelihood of free over-the-air broadcasting, for them to not play that music for a while, it wouldn’t surprise me if there were one or two stations who did that.” Wharton went on to call the coordination charge “ridiculous.”

Various players in the media reform community are keeping tabs on this skirmish. The Future of Music Coalition supports artists compensation, and it’s concerned about the allegations that MusicFIRST makes, FMC’s Casey Rae-Hunter told us. But the group hasn’t got a position on the petition. Still, “we will be following the comments on this closely,” he said.

The Media Access Project doesn’t have a stance on the PRA. But MAP’s Andrew Schwartzman says that, if MusicFIRST’s allegations “are proven to be true, they will raise serious questions as to whether some radio stations deserve to receive free licenses for exclusive use of the public’s airwaves.”

If you want to weigh in on this issue, the FCC is accepting comments on MusicFIRST’s petition through September 23. You can upload a text file here. The number for field #1 (”proceeding”) is

09-143.