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Amici Curiae Brief of TechFreedom, No. 11-1355 (D.C. Cir.)

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Released: November 1, 2012
USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 1 of 45
ORAL ARGUMENT NOT YET SCHEDULED

No. 11-1355

IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

VERIZON, Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION, Appellee.
On Appeal from an Order of the
Federal Communications Commission
_______________________________________________________________

BRIEF AMICI CURIAE

OF TECHFREEDOM,

THE COMPETITIVE ENTERPRISE INSTITUTE,

THE FREE STATE FOUNDATION, AND THE CATO INSTITUTE

IN SUPPORT OF APPELLANT

_______________________________________________________________
Berin Szoka
John P. Elwood*
Matthew Starr
Eric A. White
TechFreedom
Vinson & Elkins LLP
1899 L St., NW, Suite 1260
2200 Pennsylvania Ave., NW
Washington, DC 20036
Suite 500 West
(202) 455-8186
Washington, DC 20037
bszoka@techfreedom.org
(202) 639-6518
jelwood@velaw.com
Sam Kazman
Competitive Enterprise Institute
Counsel for Amici Curiae
1899 L St., NW, Floor 12
Washington, D.C., 20036
*Counsel of Record
(202) 331-1010
skazman@cei.org

July 23, 2012

[Additional counsel listed on next page]

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 2 of 45
Randolph May
Thomas S. Leatherbury
Free State Foundation
Vinson & Elkins LLP
P.O. Box 60680
2001 Ross Ave., Suite 3700
Potomac, MD 20859
Dallas, TX 75201
(301) 984-8253
(214) 220-7700
rmay@freestatefoundation.org
tleatherbury@velaw.com
Ilya Shapiro
Cato Institute
1000 Massachusetts Ave., NW
Washington, DC 20036
Counsel for Amici Curiae
(202) 842-0200
ishapiro@cato.org

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 3 of 45

STATEMENT REGARDING CONSENT TO FILE

AND SEPARATE BRIEFING

All parties have consented to the filing of this brief.1 Amici filed with this
Court notice of their intent to participate on July 2, 2012.
Pursuant to D.C. Circuit Rule 29(d), amici curiae TechFreedom, the
Competitive Enterprise Institute, the Free State Foundation, and the Cato Institute
certify that no other non-government amicus brief of which we are aware addresses
the constitutionality of the FCC’s network-neutrality order.
We are the only
nonprofit-public-interest-group amici of which we are aware; in light of our
activities, discussed more fully in the Interest of Amici Curiae, we believe we are
particularly well-suited to discuss the constitutional issues implicated by the FCC’s
action. We understand that there will be a brief amicus curiae filed on behalf of
the National Association of Manufacturers, which we are told will focus only on
statutory issues. Additionally, amici filed a Joint Unopposed Motion to Set Filing
Deadlines for Briefs Amicus Curiae on July 2, 2012; that motion asked this Court
to set a schedule for the filing of “all briefs of amici curiae on both sides.” The
Court granted that motion on July 3, 2012.

1 Pursuant to Fed. R. App. P. 29(c), amici state that no counsel for a party
authored this brief in whole or in part, and no counsel or party made a monetary
contribution intended to fund the preparation or submission of this brief. No
person other than amici curiae or their counsel made a monetary contribution to its
preparation or submission.
i

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CERTIFICATE AS TO PARTIES, RULINGS,

AND RELATED CASES

Pursuant to D.C. Circuit Rule 28(a)(1), amici curiae TechFreedom, the
Competitive Enterprise Institute, the Free State Foundation, and the Cato
Institute certify that:
(A)

Parties and Amici

In addition to the parties, intervenors, and amici listed in the Joint Brief
for Verizon and MetroPCS, the following amici may have an interest in the
outcome of this case:
Cato Institute
Competitive Enterprise Institute
Free State Foundation
National Association of Manufacturers
TechFreedom
(B)

Rulings under Review

References to the rulings at issue appear in the Joint Brief for Verizon
and MetroPCS.
(C)

Related Cases

References to the related cases appear in the Joint Brief for Verizon and
MetroPCS. Since that time, Cause No. 11-1411 has been dismissed at the
request of the petitioner.
ii

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USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 6 of 45

CORPORATE DISCLOSURE STATEMENTS

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and
D.C. Circuit Rule 26.1, amici curiae TechFreedom, the Competitive Enterprise
Institute, the Free State Foundation, and the Cato Institute hereby submit the
following corporate disclosure statements:
TechFreedom is a nonprofit, non-stock corporation organized under the
laws of the District of Columbia. TechFreedom has no parent corporation, and
no company owns 10 percent or more of its stock.
The Competitive Enterprise Institute (“CEI”) is a nonprofit, non-stock
corporation organized under the laws of the District of Columbia. CEI has no
parent corporation, and no company owns 10 percent or more of its stock.
The Free State Foundation (“FSF”) is a nonprofit, non-stock corporation
organized under the laws of Maryland. FSF has no parent corporation, and no
company owns 10 percent or more of its stock.
The Cato Institute (“Cato”) is a Kansas nonprofit corporation that is this
month transitioning from having several private stockholders to being a non-
stock corporation. Cato has no parent corporation, and no company owns 10
percent or more of its stock.
iv

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TABLE OF CONTENTS

Page

Statement Regarding Consent to File and Separate Briefing .....................................i
Certificate as to Parties, Rulings, and Related Cases ................................................ii
Corporate Disclosure Statements..............................................................................iv
Table of Authorities .................................................................................................vii
Interest of Amici Curiae.............................................................................................1
Summary of Argument ..............................................................................................2
Argument ...................................................................................................................4
I.
The Order Violates the First Amendment by Compelling
Broadband Providers to Speak. .......................................................................4
II.
The Order Violates the Fifth Amendment by Granting
Content Providers a Nearly Unfettered Right to Occupy
Network Owners’ Property............................................................................13
A.
The Order Effects an Unconstitutional Per Se Taking
Without Just Compensation ................................................................13
B.
If Not a Per Se Taking, the Order Constitutes a
Regulatory Taking Under the Fifth Amendment ................................19
III.
The FCC’s Reliance on Ancillary Jurisdiction Calls for
Heightened Scrutiny. .....................................................................................24
Conclusion ...............................................................................................................26
1

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TABLE OF AUTHORITIES

CASES

Page(s)

ACLU v. FCC,
823 F.2d 1554 (D.C. Cir. 1987)..................................................................25, 26
Agostini v. Felton,
521 U.S. 203 (1997).........................................................................................26
American Library Ass’n v. FCC,
406 F.3d 689 (D.C. Cir. 2005)....................................................................25, 26
Andrus v. Allard,
444 U.S. 51 (1979)......................................................................................14, 20
* Bell Atl. Tel. Cos. v. FCC,
24 F.3d 1441 (D.C. Cir. 1994)..............................................................13, 14, 15
Brown v. Entm’t Merchs. Ass’n,
131 S. Ct. 2729 (2011)........................................................................................8
Bldg.. Owners & Managers Ass’n Int’l v. FCC,
254 F.3d 89 (D.C. Cir. 2001)................................................................17–18, 18
Cablevision Sys. Corp. v. FCC,
570 F.3d 83 (2009) ...........................................................................................21
CBS, Inc. v. FCC,
453 U.S. 367 (1981)....................................................................................11–12
CFTC v. Schor,
478 U.S. 833 (1986)..........................................................................................25
Chevron U.S.A., Inc. v. Natural Res. Def. Council,
467 U.S. 837 (1984)....................................................................................15, 25
* Comcast Cablevision of Broward Cnty. v. Broward Cnty.,
124 F. Supp. 2d 685 (S.D. Fla. 2000).................................................................5
* Authorities upon which we chiefly rely are marked with asterisks.
2

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* Comcast Corp. v. FCC,
600 F.3d 642 (D.C. Cir. 2010)................................................................4, 24, 25
CompuServe Inc. v. Cyber Promotions, Inc.,
962 F. Supp. 1015 (S.D. Ohio 1997) ................................................................16
FCC v. Fla. Power Corp.,
480 U.S. 245 (1987)..........................................................................................19
FDA v. Brown & Williamson Tobacco Corp.,
529 U.S. 120 (2000)......................................................................................4, 24
Gonzales v. Oregon,
546 U.S. 243 (2006)......................................................................................4, 24
Hodel v. Irving,
481 U.S. 704 (1987)......................................................................................3, 20
Hurley v. Irish-Am. Gay, Lesbian & Bisexual Group of Boston, Inc.,
515 U.S. 557 (1995)............................................................................................6
Illinois Bell Tele. Co. v. Village of Itasca,
503 F. Supp. 2d 928 (N.D. Ill. 2007)..................................................................5
Jefferson Cnty. Sch. Dist. No. R-1 v. Moody’s Investor’s Servs.,
175 F.3d 848 (10th Cir. 1999) ..........................................................................10
* Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419 (1982)...................................................................................passim
* Lucas v. S.C. Coastal Council,
505 U.S. 1003 (1992)....................................................................................3, 13
Malik v. Brown,
16 F.3d 330 (9th Cir. 1994) ................................................................................6
Miami Herald Publ’g Co. v. Tornillo,
418 U.S. 241 (1974)............................................................................................6
Michigan v. EPA,
268 F.3d 1075 (D.C. Cir. 2001)........................................................................25
3

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Minority Television Project v. FCC,
676 F.3d 869 (9th Cir. 2012) ...............................................................................9
NARUC v. FCC,
533 F.2d 601 (D.C. Cir. 1976)..........................................................................24
Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs.,
545 U.S. 967 (2005)......................................................................................8, 21
Nixon v. United States,
978 F.2d 1269 (D.C. Cir. 1992)........................................................................15
* Nollan v. Cal. Coastal Comm’n,
483 U.S. 825 (1987)......................................................................................3, 17
Pacific Gas & Elec. Co. v. Pub. Util. Comm’n,
475 U.S. 1 (1986)............................................................................................6–7
Palazzolo v. Rhode Island,
533 U.S. 606 (2001)..........................................................................................19
* Penn Cent. Transp. Co. v. City of New York,
438 U.S. 104 (1978)..............................................................................19, 21, 22
Police Dep’t of Chicago v. Mosley,
408 U.S. 92 (1972)..............................................................................................7
Preseault v. United States,
100 F.3d 1525 (Fed. Cir. 1996) ........................................................................18
R.A.V. v. City of St. Paul, Minn.,
505 U.S. 377 (1992)............................................................................................7
Reno v. ACLU,
521 U.S. 844 (1997)..........................................................................................12
Riley v. Nat’l Fed’n of the Blind of N.C., Inc.,
487 U.S. 781 (1988)........................................................................................2, 6
Syracuse Peace Council v. FCC,
867 F.2d 654 (D.C. Cir. 1989)..........................................................................19
4

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* Turner Broad. Sys., Inc. v. FCC,
512 U.S. 622 (1994)...................................................................................passim
Turner Broad. Sys. v. FCC,
520 U.S. 180 (1997)......................................................................................8, 10
Turner Broad. Sys., Inc. v. FCC,
819 F. Supp. 32 (D.D.C. 1993),
vacated on other grounds, 512 U.S. 622 (1994) ..............................................16
United States v. E.I. du Pont de Nemours & Co.,
366 U.S. 316 (1961)..........................................................................................23
United States v. Microsoft Corp.,
253 F.3d 34 (D.C. Cir. 2001)............................................................................10
Vieth v. Jubelirer,
541 U.S. 267 (2004)............................................................................................8
Ward v. Rock Against Racism,
491 U.S. 781 (1989)..........................................................................................12
Wooley v. Maynard,
430 U.S. 705 (1977)........................................................................................2, 8
Yee v. City of Escondido,
503 U.S. 519 (1992)..........................................................................................18

FEDERAL STATUTES

15 U.S.C. §§ 1, 2 (2006) ........................................................................................23
47 U.S.C. § 230(b)(2) (2006).................................................................................11

LEGISLATIVE MATERIALS

H.R. 3458, 111th Cong. (2009) .............................................................................11
H.R. 5273, 109th Cong. (2006) .............................................................................11
H.R. 5353, 110th Cong. (2008) .............................................................................11
5

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S. 215, 110th Cong. (2007)....................................................................................11
S. 2360, 109th Cong. (2006)..................................................................................11
S. 2917, 109th Cong. (2006)..................................................................................11

ADMINISTRATIVE MATERIALS

Appropriate Regulatory Treatment for Broadband Access
to the Internet over Wireless Networks,
22 F.C.C. Rcd. 5901 (2007)..............................................................................22
In re Inquiry Concerning High Speed Access to the Internet
Over Cable and Other Facilities,
17 F.C.C. Rcd. 4798 (2002)........................................................................21–22
* Preserving the Open Internet, Report and Order,
25 F.C.C. Rcd. 17905 (Dec. 23, 2010),
76 C.F.R. 59192 (Sept. 23, 2011)..............................................................passim

MISCELLANEOUS

Timothy K. Armstrong, Chevron Deference and
Agency Self-Interest,
13 Cornell J.L. & Pub. Pol’y 203 (2004) .........................................................26
Seth L. Cooper, Sledgehammering the False Narrative
for Regulating Broadband Internet,
7 Perspectives from FSF Scholars 16 (2012), available at
http://www.freestatefoundation.org/images/Sledge
hammering_the_False_Narrative_For_Regulating
_Broadband_Internet_071212.pdf....................................................................20
Larry Downes, The Net Neutrality Walk of Shame
(Sept. 28, 2009), available at http://larrydownes.com/
the-net-neutrality-walk-of-shame/ ......................................................................8
* Larry Downes, Unscrambling the FCC’s Net Neutrality
Order: Preserving the Open Internet—But Which One?
20 CommLaw Conspectus 83 (2011-2012)....................................................7, 9
6

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* Barbara Esbin, FCC Could Mess Up Internet with ‘Net
Neutrality’ Rules No One Needs,
U.S. News & World Rep. (Nov. 24, 2009).....................................................3, 9
Thomas W. Hazlett & Anil Caliskan, Natural Experiments
in U.S. Broadband Regulation,
7 Rev. Network Econ. 460 (2008)....................................................................22
* Daniel A. Lyons, Virtual Takings: The Coming Fifth
Amendment Challenge to Net Neutrality Regulation,
86 Notre Dame L. Rev. 65 (2011) ..................................................15–16, 18, 20
* Randolph J. May, Net Neutrality Mandates: Neutering
the First Amendment in the Digital Age,
3 I/S: A J. of Law and Pol’y for the Info. Soc’y 198 (2007)..................2, 20, 27
Frank I. Michelman, Property, Utility, and Fairness:
Comments on the Ethical Foundations of “Just
Compensation” Law
,
80 Harv. L. Rev. 1165 (1967).....................................................................16–17
Blake D. Morant, Symposium: First Amendment Issues
in Emerging Technology – The Search for a Viable
Theory of Regulation in the Digital Age
,
47 Univ. of Louisville L. Rev. 661 (2009) .......................................................11
James B. Speta, FCC Authority to Regulate the Internet:
Creating It and Limiting It,
35 Loy. U. Chi. L.J. 15 (2003) .........................................................................24
Transcript of Oral Argument, Comcast v. FCC,
No. 08-1291, Jan. 8, 2010...........................................................................24, 25
Verizon, Industry Overview,
http://www22.verizon.com/investor/industryoverview.htm.............................22
Eugene Volokh & Donald Falk, First Amendment
Protection for Search Engine Search Results
(Google, Working Paper, Apr. 20, 2012), available at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2055364 ........................10
7

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INTEREST OF AMICI CURIAE

This brief is submitted by amici curiae TechFreedom, the Competitive
Enterprise Institute, the Free State Foundation, and the Cato Institute in support of
Appellant Verizon.
TechFreedom, a nonprofit, nonpartisan public policy think tank seeking
501(c)(3) status based in Washington, D.C., works on a wide range of information-
technology policy issues under the core belief that technology enhances freedom
and freedom enhances technology.
The Competitive Enterprise Institute is a nonprofit public interest
organization dedicated to the principles of limited constitutional government and
free enterprise. CEI engages in research, education, litigation, and advocacy on a
broad range of regulatory and constitutional issues.
The Free State Foundation, a nonprofit, Section 501(c)(3) tax-exempt
foundation, promotes through its research and educational activities free market,
limited government, and rule of law principles, especially with respect to
communications and high-tech markets.
The Cato Institute was established in 1977 as a nonpartisan public policy
research foundation dedicated to advancing the principles of individual liberty, free
markets, and limited government. Toward those ends, Cato publishes books and
8

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studies, conducts conferences and forums, publishes the annual Cato Supreme
Court Review, and files amicus briefs.

SUMMARY OF THE ARGUMENT

However noble the FCC’s intentions, its network-neutrality regulation,
Preserving the Open Internet2 (“the Order”), benefits content providers at the
expense of broadband providers’ constitutional rights.
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. E.g.,
Riley v. Nat’l Fed’n of the Blind of N.C., Inc., 487 U.S. 781, 796–97 (1988); see
also Randolph J. May, Net Neutrality Mandates: Neutering the First Amendment in
the Digital Age, 3 I/S: A J. of Law and Pol’y for the Info. Soc’y 198 (2007). It is
particularly pernicious because it applies only to some speakers. See Order ¶¶50,
94. The Order therefore requires strict-scrutiny review, e.g., Wooley v. Maynard,
430 U.S. 705, 714–17 (1977), which it cannot survive.
The Order serves no compelling government interest: it “solves” a
“problem” even the FCC admits is almost entirely theoretical. See Order ¶¶12, 24,
62, 38, 147. Empirical evidence suggests that the practices the Order purports to

2 25 F.C.C. Rcd. 17905 (Dec. 23, 2010), 76 C.F.R. 59192 (Sept. 23, 2011).
9

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prevent have been, and most likely will continue to be, deterred by market forces.
See, e.g., Barbara Esbin, FCC Could Mess Up Internet with ‘Net Neutrality’ Rules
No One Needs, U.S. News & World Rep. (Nov. 24, 2009). Even if anticompetitive
behavior became a problem, those rare instances could continue to be dealt with
through existing antitrust laws. And, far 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.
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). See, e.g., Nollan v.
Cal. Coastal Comm’n, 483 U.S. 825, 831 (1987). The Order deprives network
owners of their traditional right to exclude others from, and control the use of, their
property. See, e.g., Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1015 (1992).
And, by requiring network owners to give content providers space on their
networks, the Order leaves users to bear the full cost of funding networks, which in
turn reduces the networks’ value by discouraging consumers from adopting, and
fully using, broadband. Cf. Hodel v. Irving, 481 U.S. 704, 714 (1987). The Order
“chops through the bundle” (Loretto v. Teleprompter Manhattan CATV Corp., 458
U.S. 419, 435 (1982)) of network owners’ property rights—effecting a per se
10

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physical taking. At the very least, by displacing network owners’ reasonable
investment-backed expectations, the Order effects a regulatory taking in violation
of the Fifth Amendment.
Finally, the FCC’s assertion of “ancillary authority” to regulate the Internet
arrogates a boundless, and therefore dangerous, amount of power to itself. This
Court has recognized that the FCC possesses some authority over matters ancillary
to those Congress specifically delegated to it. See, e.g., Comcast Corp. v. FCC,
600 F.3d 642, 653 (D.C. Cir. 2010). But agency “ancillary authority” is an
increasingly anomalous doctrine grounded in pre-Chevron Supreme Court case law
(see, e.g., id. at 646 (collective authorities)) and conflicts with modern
administrative-law limits on agency power, see, e.g., Gonzales v. Oregon, 546 U.S.
243, 267 (2006); FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160
(2000). The continuing validity of that doctrine is therefore ripe for
reconsideration; at a minimum, this Court should be cautious in allowing the FCC
ancillary authority to regulate the Internet.

ARGUMENT

I.

The Order Violates the First Amendment by Compelling Broadband
Providers to Speak

The Order compels speech by forcing Internet service providers to post,
send, and allow access to nearly all types of content, even if a broadband provider
prefers not to transmit such content. See Order ¶1 (“Fixed broadband providers
11

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may not block lawful content, applications, services, or non-harmful devices
. . . .”). Courts have recognized that the First Amendment protects the editorial
discretion of broadband providers in determining what content they transmit. See
Comcast Cablevision of Broward Cnty. v. Broward Cnty., 124 F. Supp. 2d 685
(S.D. Fla. 2000) (holding a county ordinance requiring favorable-term access for
all Internet service providers violates broadband cable owners’ free-speech rights);
id. at 692 (“Liberty of circulating is not confined to newspapers and periodicals,
pamphlets and leaflets, but also to delivery of information by means of fiber optics,
microprocessors and cable.”); see also Turner Broad. Sys., Inc. v. FCC, 512 U.S.
622, 636 (1994) (“Turner I”) (“[Through] original programming or by exercising
editorial discretion over which stations or programs to include in its repertoire[,
cable programmers and operators] see[k] to communicate messages on a wide
variety of topics and in a wide variety of formats.”) (internal citations omitted); Ill.
Bell Tele. Co. v. Village of Itasca, 503 F. Supp. 2d 928, 948 (N.D. Ill. 2007)
(collecting cases recognizing that cable and satellite companies’ activities are
protected by the First Amendment). Although, as Verizon, MetroPCS, and even
the FCC note, alleged network-neutrality violations have been rare, see Joint Brief
for Verizon and MetroPCS 47; Order ¶24, that does not diminish broadband
providers’ constitutional rights to decide for themselves what to transmit and on
what terms. A speaker’s freely made choice to transmit the messages of others is
12

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itself an exercise of First Amendment rights to control the content transmitted, and
does not waive his right to determine the content he chooses to transmit in the
future. Cf. Malik v. Brown, 16 F.3d 330, 332 (9th Cir. 1994) (“A ‘use it or lose it’
approach [for constitutional rights] does not square with the Constitution.”).
Nor is the Order any less constitutionally suspect because it compels speech
rather than restricts it. Constitutionally, it makes no difference whether the
government forces broadband providers to speak in certain ways or not to speak at
all. Although “[t]here is certainly some difference between compelled speech and
compelled silence, . . . in the context of protected speech, the difference is without
constitutional significance . . . .” Riley, 487 U.S. at 796–97; see also Hurley v.
Irish-Am. Gay, Lesbian & Bisexual Group of Boston, Inc., 515 U.S. 557, 573
(1995) (extending the protections against compelled speech to “business
corporations generally and [to] professional publishers”); Miami Herald Publ’g
Co. v. Tornillo, 418 U.S. 241, 258 (1974) (holding unconstitutional a Florida
statute requiring newspaper to publish political candidate’s reply to critical
editorial). Most fundamentally, “the First Amendment guarantees ‘freedom of
speech,’ a term necessarily comprising the decision of both what to say and what
not to say.” Riley, 487 U.S. at 796–97; cf. Pac. Gas & Elec. Co. v. Pub. Util.
Comm’n, 475 U.S. 1, 9 (1986) (holding electric utility could not be compelled to
include in its billing envelope an advocacy group’s flyer with which it disagreed).
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The Order demands particularly exacting scrutiny because it picks and
chooses among speakers. Cf., e.g., R.A.V. v. City of St. Paul, Minn., 505 U.S. 377,
386 (1992) (“The government may not regulate use based on hostility—or
favoritism—towards the underlying message expressed.”); Police Dep’t of
Chicago v. Mosley, 408 U.S. 92, 94–95 (1972) (finding general ban on picketing
near schools impermissibly content-based because it contained an exclusion for
labor picketing). The Order’s nondiscrimination rule applies only to certain types
of Internet service providers: for instance, to broadband providers but not to
“edge” providers.3 Thus Apple could continue to exercise editorial discretion in
deciding which applications it will allow iPhone and iPad users to access.4 Besides
the economic disruption caused when the government regulates only certain
speakers, the government’s differential treatment of speakers violates basic First
Amendment principles of, yes, neutrality. Cf. Turner I, 512 U.S. at 659
(“Regulations that discriminate among media, or among different speakers within a
single medium, often present serious First Amendment concerns.”); Larry Downes,

3 See Order ¶50. According to the Commission, edge providers differ from
Internet service providers in that they merely provide “content or applications over
the Internet.” Id. By contrast, according to the Commission, “broadband providers
control access to the Internet for their subscribers and for anyone wishing to reach
those subscribers.”). Id.
4
See Larry Downes, Unscrambling the FCC’s Net Neutrality Order:
Preserving the Open Internet—But Which One? 20 CommLaw Conspectus 83, 93
(2011–2012).
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The Net Neutrality Walk of Shame (Sept. 28, 2009), available at http://
larrydownes.com/the-net-neutrality-walk-of-shame/. Accordingly, the Order is
subject to strict scrutiny, e.g., Wooley, 430 U.S. at 714–17, and can overcome the
“strong presumption of invalidity” that applies to all such laws, Vieth v. Jubelirer,
541 U.S. 267, 294 (2004), only if it is “justified by a compelling government
interest and is narrowly drawn to serve that interest,” Brown v. Entm’t Merchs.
Ass’n, 131 S. Ct. 2729, 2738 (2011). The FCC cannot overcome that presumption
here.
Even were this Court to view broadband providers as common carriers—
which the Commission itself says they are not5—the FCC could not satisfy its
burden under intermediate-scrutiny review. Cf. Turner Broad. Sys. v. FCC, 520
U.S. 180 (1997) (“Turner II”) (applying intermediate scrutiny to cable must-carry
provisions). After all, under intermediate scrutiny, “the guiding principle . . . is
that the government must ‘demonstrate that the recited harms’ to the substantial
government interest ‘are real, not merely conjectural, and that the regulation will in
fact alleviate those harms in a direct and material way.’” Minority Television
Project, Inc. v. FCC, 676 F.3d 869, 879 (9th Cir. 2012) (quoting Turner I, 512 U.S.

5 See Order ¶¶79, 122 n.381; see also Nat’l Cable & Telecomms. Ass’n v.
Brand X Internet Servs., 545 U.S. 967, 975–76 (2005); May, supra, at 209. Of
course, this did not stop the FCC from regulating broadband providers as if they
were
common carriers. See, e.g., Joint Brief for Verizon & MetroPCS 15–20.
15

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at 664–65.) But as discussed below, the harms here remain entirely conjectural.
The Commission has failed to identify any material instances of denial of access,
instead relying on hypothetical threats to the “open Internet.” See Order ¶¶12, 24,
62, 38, 147.
The Government identifies no compelling interest. The evidence simply
does not show discriminatory practices requiring new regulatory remedies. See,
e.g., Joint Brief for Verizon and MetroPCS 47.6 As one scholar noted, although
“there are some 121.2 million broadband Internet service lines in the United
States,” there are “few instances where network operators supposedly violated the
FCC’s network neutrality principles.” Esbin, supra. That is unsurprising given
how well market forces already discipline broadband providers:
consumers
demand unfettered access and “[p]erceived violations [of network neutrality] are
met with nearly immediate and widespread public backlash through the very
medium that is allegedly at risk: the free and open Internet.” Id. If the FCC fears
there is insufficient broadband competition, it could address that problem directly
by ensuring adequate spectrum for competing wireless-broadband services. See

6 See also Downes, supra, at 101 (noting that examples in the Order “of
instances where broadband providers acted to ‘limit openness’” comprised just
“four instances” in “three paragraphs”); id. at 101–05 (describing in detail these
instances and noting that the Order’s regulation might not even have covered a
majority of them).
16

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Department of Justice, Notice of Inquiry, In the Matter of A National Broadband
Plan for Our Future, GN Docket No. 09-51 (Jan. 4, 2010), available at http://
www.justice.gov/atr/public/comments/253393.pdf#page=8 (discussing importance
of wireless competition). Finally, to the extent broadband providers abuse market
power to block access to competitors, rather than infringe on providers’ editorial
discretion, such actions can be addressed through existing antitrust law.7 See, e.g.,
United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (upholding
monopolization claim under the Sherman Act).
The cable must-carry provisions upheld in Turner II were predicated on
Congress’s express finding (entitled to “considerable deference”) that most cable
systems had functional monopolies that gave them “undue market power,” Turner
I, 512 U.S. at 633, and that cable systems had “increasing ability and incentive to
drop local broadcast stations.” Turner II, 520 U.S. at 197. But no congressional
findings support the FCC’s rationale for the Order; indeed, Congress has

7 But even violations of antitrust laws cannot be “predicated solely on
protected speech.” Jefferson Cnty. Sch. Dist. No. R-1 v. Moody’s Investor’s Servs.,
175 F.3d 848, 860 (10th Cir. 1999); Eugene Volokh & Donald Falk, First
Amendment Protection for Search Engine Search Results
(Working Paper, Apr. 20,
2012) at 20, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id
=2055364 (“[A]ntitrust law itself, like other laws, is limited by the First
Amendment, and may not be used to control what speakers say or how they say
it.”).
17

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repeatedly declined to enact network-neutrality legislation.8 In fact, the legislation
Congress has enacted suggests it believes that minimizing Internet regulation is a
more important governmental interest than FCC micromanagement of network
access. See, e.g., Blake Morant, Symposium: First Amendment Issues in Emerging
Technology – The Search for a Viable Theory of Regulation in the Digital Age, 47
Univ. of Louisville L. Rev. 661, 672 (2009) (“The Telecommunications Act of
1996 . . . clearly requires deference to the ‘vibrant and competitive free market,’
which should be ‘unfettered by Federal or State regulation.’” ) (quoting 47 U.S.C.
§ 230(b)(2) (2006)).
Nor is the Order narrowly tailored to support the government’s claimed
interest. It forces broadband providers to allow nearly all speech all the time. By
contrast, even under the long-abandoned “fairness doctrine,” see generally
Syracuse Peace Council v. FCC, 867 F.2d 654 (D.C. Cir. 1989), the Supreme
Court permitted the government to compel speech only when that requirement was
limited in time and scope. In CBS, Inc. v. FCC, 453 U.S. 367, 396 (1981), for
instance, the Court upheld “a limited right to ‘reasonable’ access that pertains only
to legally qualified federal candidates and may be invoked by them only for the

8 See, e.g., H.R. 3458, 111th Cong. (2009); H.R. 5353, 110th Cong. (2008);
S. 215, 110th Cong. (2007); S. 2917, 109th Cong. (2006); H.R. 5273, 109th Cong.
(2006); S. 2360, 109th Cong. (2006).
18

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purpose of advancing their candidacies once a campaign has commenced.”
(internal citations omitted). The Court contrasted that limited right to a general
right requiring granting access to all comers, noting, “[p]etitioners are correct that
the Court has never approved a general right of access to the media,” and adding,
“[n]or do we do so today.” Id. Yet the Order creates just such a general right, with
only a carve-out for whatever category of speaker the FCC chooses to exclude
from its largesse. The beneficiaries are all those wishing to make content available
through providers’ networks, who will be able to do so whenever they want. If a
blanket order mandating nearly unfettered access is “narrow,” it is difficult to
imagine what a “broad” compulsion of speech would look like.
It is hornbook law that the “government may not regulate expression in such
a manner that a substantial portion of the burden on speech does not serve to
advance its goals.” Ward v. Rock Against Racism, 491 U.S. 781, 799 (1989). With
few allegations of network discrimination (let alone whatever would fall into the
presumably narrower category of “unreasonable” network discrimination), the
Order would fail even if it only minimally burdened speech. As it is, the Order
forces broadband providers to substitute the editorial discretion of content
providers for their own. The Order goes too far; in essence, it “burn[s] the house
to roast the pig.” Reno v. ACLU, 521 U.S. 844, 872 (1997).
19

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II.

The Order Violates the Fifth Amendment by Granting Content
Providers a Nearly Unfettered Right to Occupy Network Owners’
Property

A.
The Order Effects an Unconstitutional Per Se Taking Without Just
Compensation
If the Order stands, content providers will enjoy a nearly unqualified right to
occupy the cables and wires that constitute broadband networks. The Fifth
Amendment prohibits permanent physical occupations without just compensation,
“no matter how minute the intrusion, and no matter how weighty the public
purpose behind it.” Lucas, 505 U.S. at 1015.
In fact, a “permanent physical
occupation” of property constitutes a per se taking, even if the occupation is on a
“relatively insubstantial amount[] of space.” Loretto, 458 U.S. at 430; see also
Bell Atl. Tel. Cos. v. FCC, 24 F.3d 1441, 1446 (D.C. Cir. 1994). The Order here
provides no compensation to network owners, yet curtails network owners’ rights
to exclude users and to control the use of their networks. This works a per se
taking, regardless of the manner of and rationale behind that taking. See Loretto,
458 U.S. at 426 (noting traditional “ad hoc” factors applied in takings cases are
irrelevant when a “permanent physical occupation” occurs).
Loretto concerned a state law requiring landlords to allow cable-television
companies to install equipment on their property. Id. at 421. The Court found the
statute unconstitutional because it permitted the company to occupy the landlord’s
physical property without compensation. Id. at 421–22. This was a per se taking,
20

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it held, because that placement of cable equipment on the landlord’s property did
“not simply take a single ‘strand’ from the ‘bundle’ of property rights:
it
chop[ped] through the bundle, taking a slice of every strand.” Id. at 435 (quoting
Andrus v. Allard, 444 U.S. 51, 65-66 (1979)). As the Court explained, “[p]roperty
rights in a physical thing have been described as the rights to possess, use and
dispose of it. To the extent that the government permanently occupies physical
property, it effectively destroys each of these rights.”
Id. (internal quotations
omitted). And, the Court added, the government need not directly occupy property
to create a per se taking; rather, a “permanent physical occupation authorized by
state law is a taking without regard to whether the State, or instead a party
authorized by the State, is the occupant.” Id. at 432 n.9.
More recently, in Bell Atlantic, this Court invalidated a Commission order
requiring local telephone companies to allow “physical co-location” by which a
competitive access provider (“CAP”) would string its own cable to a local
telephone company’s central office. 24 F.3d at 1444. This Court held that the
“Commission’s decision to grant CAPs the right to exclusive use of a portion of
the petitioners’ central offices directly implicates the Just Compensation Clause of
the Fifth Amendment, under which a ‘permanent physical occupation authorized
21

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by government is a taking without regard to the public interests that it may
serve.’” 9 Id. at 1445 (quoting Loretto, 458 U.S. at 426).
Here, the Order authorizes an occupation of broadband networks that is both
physical and permanent. The Order forbids network owners from excluding
providers’ content—much like the Loretto statute forbade landlords from
excluding cable companies and the Bell order forbade local telephone companies
from excluding CAPs. And, by extension, the Order gives content providers the
right to occupy network cables and wires—just as the Loretto statute and Bell order
gave third parties the right to occupy the plaintiffs’ properties.
Although either “real or personal property” can be subject to a per se taking,
Nixon v. United States, 978 F.2d 1269, 1284–85 (D.C. Cir. 1992), a proper
understanding of broadband network communications shows that electrical
networks resemble the physical property at issue in Loretto:
[T]he transmission of content over broadband networks is not some
metaphysical act. . . . Transmission of Internet content primarily
involves the movement of electrons, which are physical particles that
occupy rivalrous limited space on those [broadband] lines, en route
from the Internet to the end-user consumer.

9 Furthermore, in Bell Atlantic, this Court held that a regulation implicating a
taking, even a compensated one, negates the usual deference to which an agency is
entitled under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837 (1984). 24 F.3d at 337. And, the Court added, a regulation that works an
uncompensated taking compels courts to strike down the order, not grant
compensation. See id. at 337–38.
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Daniel Lyons, Virtual Takings: The Coming Fifth Amendment Challenge to Net
Neutrality Regulation, 86 Notre Dame L. Rev. 65, 97 (2011); cf. Turner Broad.
Sys., Inc. v. FCC, 819 F. Supp. 32, 67 n.10 (D.D.C. 1993) (Williams, J., dissenting)
(acknowledging that “insertion of local stations’ programs into a cable operator’s
line-up” implicates Loretto because such insertion “presumably is not a
metaphysical act, and presumably takes place on real property”), vacated on other
grounds, 512 U.S. 622 (1994); CompuServe Inc. v. Cyber Promotions, Inc., 962 F.
Supp. 1015, 1021 (S.D. Ohio 1997) (“Electronic signals generated and sent by
computer have been held to be sufficiently physically tangible to support a trespass
cause of action.”). Moreover, as Loretto instructs, even though any given content
provider’s physical occupation of wires may involve only a small part of total
network capacity, that is irrelevant in determining whether a taking occurred. See
458 U.S. at 430.
That content providers use network space intermittently rather than
continuously does not distinguish this case from Loretto or Bell. The Order
effectively grants content providers a permanent easement over private broadband
networks by allowing them to “‘regularly’ use, or ‘permanently’ occupy . . . a
thing which theretofore was understood to be under private ownership.” Id. at 427
n.5 (quoting Frank Michelman, Property, Utility, and Fairness: Comments on the
Ethical Foundations of “Just Compensation” Law, 80 Harv. L. Rev. 1165, 1184
23

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 31 of 45
(1967)). Thus, the FCC has taken one element from the network owner’s bundle
of rights and permanently transferred it to content providers—however intermittent
content providers’ use of the easement might be.
The Court has squarely held that such easements constitute a permanent
physical occupation under Loretto. In Nollan v. California Coastal Commission,
the Court considered California’s decision to condition issuance of a rebuilding
permit on a landowner’s acceptance of an easement over his beachfront property,
thus connecting two public beaches. 483 U.S. at 831. The Court held that “a
‘permanent physical occupation’ has occurred, for purposes of the [Loretto per se
takings] rule, where individuals are given a permanent and continuous right to pass
to and fro, so that the real property may continuously be traversed, even though no
particular individual is permitted to station himself permanently upon the
premises.” Id. at 832. Although here, no single content provider will permanently
occupy some discrete physical portion of the network wires, the Order still allows
content providers to traverse the network permanently and continuously without
interference from the owner, just as the easement in Nollan allowed beachgoers to
traverse the Nollans’ property.
To be sure, this Court held in Building Owners & Managers Ass’n Int’l v.
FCC that the Commission’s order forbidding landlords from banning tenant use of
satellite dishes was not a per se taking under Loretto. 254 F.3d 89, 97–99 (D.C.
24

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 32 of 45
Cir. 2001). But as this Court noted, the government has heightened authority “to
regulate various aspects of the landlord-tenant relationship without paying
compensation for all economic injuries that such regulation entails, even though
some of these regulations transfer wealth from the one who is regulated to
another.” Id. at 98 (internal quotation omitted). By contrast, Internet customers
have no such “tenancy” rights in a network, but only a contractual easement to use
a network under certain terms and conditions. See Lyons, supra, at 74. Expanding
the scope of such an express easement (or, really, giving another easement to the
content provider) constitutes a taking even where expansion of a tenant’s rights
would not. See, e.g., Preseault v. United States, 100 F.3d 1525, 1571 n.16 (Fed.
Cir. 1996) (holding a law expanding an “expressly limited” easement for railroad
use into a public easement was a taking).
Furthermore, the Order requires network owners to grant third-party access
to all content providers, access to which the network owners did not automatically
consent upon contracting with a subscriber. Landlords, by contrast, consensually
grant tenants access and cannot subsequently argue that “regulation of the terms of
a landlord-tenant relationship constitutes on its face an invasion of the landlord’s
right to exclude” for purposes of showing a per se taking. Bldg. Owners, 254 F.3d
at 99 (citing Yee v. City of Escondido, 503 U.S. 519, 531 (1992)). Here, a content
provider is a more constitutionally suspect “interloper with a government license,”
25

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not a lessee. See id. at 98 (quoting FCC v. Fla. Power Corp., 480 U.S. 245, 252–
53 (1987)).
B.
If Not a Per Se Taking, the Order Constitutes a Regulatory Taking
Under the Fifth Amendment
Even if the Order is not a Loretto per se physical taking, it nonetheless
constitutes an unconstitutional regulatory taking without just compensation.
Determining when a regulatory taking has occurred requires the traditional ad hoc
three-factor inquiry: (1) the economic impact of the regulation on the claimant; (2)
the extent to which the regulation interferes with reasonable investment-backed
expectations; and (3) the nature of the governmental action.
See Penn Cent.
Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). Although the FCC’s
action need not implicate all three factors to constitute a taking, see, e.g., Palazzolo
v. Rhode Island, 533 U.S. 606, 633–34 (2001) (O’Connor, J., concurring), it
plainly does.
To begin with, the Order substantially undermines the ability of Verizon and
other broadband providers to realize the full value of their networks, causing
economic harm to providers. See, e.g., Joint Brief for Verizon and MetroPCS 6–7,
51–52; see also Penn Central, 438 U.S. at 126–27 (discussing how adverse
economic impacts of a regulation evidence a regulatory taking). The Order here
plainly reduces the value of network property. First, the Order’s bans on
discrimination and blocking prevent network owners from realizing the full
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monetary potential of their networks via differentiated pricing. See Joint Brief for
Verizon and MetroPCS 20, 43–44. By charging different rates for varying levels
of network service or bandwidth to content providers, network owners would
maximize revenue, see Lyons, supra, at 74, and consumers could choose the
Internet experience they prefer, cf. May, supra, at 206–07. Instead, the Order
essentially requires users alone to fund networks while allowing content providers
free access. This reduces the current and future market value of network assets, a
strong indication that regulation has had an adverse economic impact. See Hodel,
481 U.S. at 714 (looking to property’s market value in considering whether
regulation constituted a taking). Second, the Order fossilizes broadband networks
as simply a “dumb” conduit for Internet traffic, which could deprive network
owners of other potentially profitable network uses such as cable television or
telephony. See Seth Cooper, Sledgehammering the False Narrative For
Regulating Broadband Internet, 7 Perspectives from FSF Scholars 16, at *1–2
(2012), available at http://www.freestatefoundation.org/images/Sledgehammering
_the_False_Narrative_For_Regulating_Broadband_Internet_071212.pdf;
cf.
Andrus, 444 U.S. at 66 (assessing the economic impact of a law banning the sale of
parts of protected birds by looking to the harm caused by the law’s elimination of
the primary economic use for them).
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The Order also interferes with network owners’ reasonable investment-
backed expectations. In Cablevision Systems Corp. v. FCC, the case challenging
the Commission’s enforcement of a “must-carry” provision against a cable-
television company, this Court noted that, to show a regulatory taking,
“Cablevision was required to show that the regulation had an economic impact that
interfered with ‘distinct investment-backed expectations.’” 570 F.3d 83, 98–99
(2009) (citing Penn Central, 438 U.S. at 124). Absent any such showing, the
Court held that “any regulatory taking theory must therefore fail.” Id. at 99.
Here, the Commission’s actions underscore the reasonableness of network
owners’ investment-backed expectations in developing advanced broadband
networks. See Joint Brief for Verizon and MetroPCS 49. The Commission’s 2002
declaratory ruling held that cable-modem services were exempt from “common
carrier” obligations and would only be regulated under Title I of the
Communications Act, In re Inquiry Concerning High Speed Access to the Internet
Over Cable and Other Facilities, 17 F.C.C. Rcd. 4798 (2002), a conclusion the
Supreme Court approved in National Cable & Telecomms. Ass’n v. Brand X
Internet Servs., 545 U.S. 967 (2005). The 2002 declaratory ruling’s conclusion
that the Commission believed “broadband services should exist in a minimal
regulatory environment that promotes investment and innovation in a competitive
market” established network owners’ expectation that they would be able to recoup
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their investments over time under light-touch FCC regulatory policies. See 17
F.C.C. Rcd. at 4802. Indeed, following Brand X, the Commission issued a 2007
declaratory ruling freeing all broadband network owners, not just cable owners,
from the requirement that they sell portions of their bandwidth at wholesale rates to
competitors. See Appropriate Regulatory Treatment for Broadband Access to the
Internet over Wireless Networks, 22 F.C.C. Rcd. 5901, 5909 (2007).
The understanding that network owners would not be regulated as de facto
common carriers encouraged network owners to pour billions of dollars into
building, maintaining, and modernizing broadband plants.
See, e.g., Thomas
Hazlett & Anil Caliskan, Natural Experiments in U.S. Broadband Regulation, 7
Rev. Network Econ. 460, 477 (2008) (describing growth in the broadband industry
following the 2007 declaratory ruling); cf. Penn Central, 438 U.S. at 124. Indeed,
Verizon alone invested over $20 billion to replace millions of miles of copper wire
with fiber-optic cables. Verizon, Industry Overview, at ch.4, http://www22.
verizon.com/investor/industryoverview.htm.
The Order undercuts
these
investment-backed expectations by subjecting network owners to a stringent
regulatory regime.
Finally, the Order physically invades network owners’ property. See 13–19,
supra; see also Penn Central, 458 U.S. at 124 (“[A regulatory taking] may more
readily be found when the interference with property can be characterized as a
29

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physical invasion by the government.”). But even if the Order does not lead to the
permanent physical occupation of networks, at the very least it facilitates a
physical invasion of property because content providers are given unqualified
access to physical network assets regardless of the owner’s wishes. As
Commissioner McDowell noted in his dissent from the Order: “[T]he new
regulatory regime effectively authorizes third-party occupation of some portion of
a broadband ISP’s transmission facilities by constraining the facility owner’s
ability to decide how to best manage the traffic running over the broadband
platform.” Order, at 168 n.111 (McDowell, Comm’r, dissenting). The Order’s
invasion is tantamount to a physical occupation.
Finally, invalidating the Order as a taking would not leave the government
powerless to regulate anticompetitive behavior that harms consumers. Antitrust
violations, for example, may justify imposition of equitable remedies that would
otherwise be unconstitutional takings. Cf. United States v. E.I. du Pont de
Nemours & Co., 366 U.S. 316, 326 (1961) (“[C]ourts are authorized, indeed
required, to decree relief effective to redress the violations [of antitrust law],
whatever the adverse effect of such a decree on private interests.”) But that does
not support the FCC’s actions here. Network owners have not engaged in any
restraints of trade or other forms of anticompetitive conduct necessary to justify
such a remedy. See 15 U.S.C. §§ 1, 2 (2006).
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III.

The FCC’s Reliance on “Ancillary Jurisdiction” Demands Heightened
Scrutiny

Although existing case law recognizes that the FCC possesses some
“ancillary jurisdiction” over matters for which it lacks explicit regulatory authority
if “reasonably ancillary” to matters the Communications Act “specifically
delegate[s]” to the agency, see, e.g. Comcast, 600 F.3d at 646, 653 (quoting
NARUC v. FCC, 533 F.2d 601, 612 (D.C. Cir. 1976)) (emphasis in Comcast), that
doctrine is increasingly “out of step with contemporary Supreme Court
jurisprudence” (Tr. of Oral Argument 20, Comcast v. FCC, No. 08-1291, Jan. 8,
2010 (Randolph, J.)) limiting an agency’s regulatory authority to that explicitly
delegated by Congress, see, e.g., Gonzales, 546 U.S. 243 at 267 (“The importance
of the issue . . . makes the oblique form of the claimed delegation all the more
suspect.”); Brown & Williamson Tobacco Corp., 529 U.S. at 160 (“[W]e are
confident that Congress could not have intended to delegate a decision of such
economic and political significance to an agency in so cryptic a fashion.”); see also
James B. Speta, FCC Authority to Regulate the Internet: Creating It and Limiting
It, 35 Loy. U. Chi. L.J. 15, 25 & n.56 (2003) (discussing the inconsistency between
ancillary-authority cases and recent Supreme Court cases policing agency powers
more strictly).
Allowing an agency that derives its regulatory authority solely from
congressional delegation to claim ancillary authority beyond that grant of power
31

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violates basic administrative-law principles. Properly understood, “[t]he
Commission ‘has no constitutional or common law existence or authority, but only
those authorities conferred upon it by Congress.’ ” Am. Library Ass’n v. FCC, 406
F.3d 689, 698 (D.C. Cir. 2005) (quoting Michigan v. EPA, 268 F.3d 1075, 1081
(D.C. Cir. 2001)). But, by invoking its ancillary authority, the FCC grasps beyond
the regulatory powers that Congress actually gave it. Cf. ACLU v. FCC, 823 F.2d
1554, 1567 n.32 (D.C. Cir. 1987) (“[I]t seems highly unlikely that a responsible
Congress would implicitly delegate to an agency the power to define the scope of
its own power.”).
The Supreme Court precedents supporting the FCC’s ancillary-authority
claims predate the seminal decision in Chevron, see Comcast, 600 F.3d at 646
(collecting authorities). The FCC’s claims more closely resemble the discarded
notion of “implied rights of action” than Chevron and its progeny. Tr. of Oral
Argument 20, Comcast v. FCC, No. 08-1291, Jan. 8, 2010 (Randolph, J.).
Underscoring how anomalous ancillary agency authority really is, the FCC is one
of the few agencies that still invokes the concept as grounds for greater regulatory
reach. Cf. CFTC v. Schor, 478 U.S. 833, 852 (1986) (noting that the “wholesale
importation of ancillary jurisdiction into the agency context” has the potential to
“create great[] constitutional difficulties”).
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Agencies have every incentive to interpret the scope of their authority
broadly. See generally Timothy K. Armstrong, Chevron Deference and Agency
Self-Interest, 13 Cornell J.L. & Pub. Pol’y 203 (2004) (discussing why courts
should view skeptically interpretations advancing agencies’ jurisdictional self-
interest). For that reason, courts are well advised to recognize agency regulatory
authority only where Congress has specifically granted it. At a minimum, cf.
Agostini v. Felton, 521 U.S. 203, 215 (1997), these considerations warrant caution
in recognizing ancillary authority: “[w]hen an agency’s assertion of power into
new arenas is under attack, . . . courts should perform a close and searching
analysis of congressional intent, remaining skeptical of the proposition that
Congress did not speak to such a fundamental issue.” ACLU, 823 F.2d at 1567
n.32. Given the grave First- and Fifth-Amendment concerns present here, this case
warrants that same “very cautious approach in deciding whether the Commission
has validly invoked its ancillary jurisdiction.” Am. Library Ass’n, 406 F.3d at 702.
If the FCC can invent authority to regulate the Internet today, there is no limit to
what it might do tomorrow.

CONCLUSION

For the foregoing reasons, this Court should vacate the Order.


33

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USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 43 of 45

CERTIFICATE OF SERVICE

I hereby certify that on this 23d day of July, 2012, a true and correct copy of
the foregoing instrument was filed with the Clerk of the United States Court of
Appeals for the D.C. Circuit via the Court’s CM/ECF system, which will send
notice of such filing to all counsel who are registered CM/ECF users. Others,
marked with an asterisk, will receive service by mail unless another attorney for
the same party is receiving service through CM/ECF.
Carl W. Northrop
Mark A. Stachiw
Telecommunications Law
General Counsel, Secretary & Vice
Professionals PLLC
Chairman
875 15th Street, NW, Suite 750
MetroPCS Communications, Inc.
Washington, DC 20005
2250 Lakeside Blvd.
Counsel for MetroPCS
Richardson, TX 75082
Communications, Inc., et al.
Counsel for MetroPCS
Communications, Inc., et al.

Helgi C. Walker
*Michael E. Glover
Eve Klindera Reed
Edward Shakin
Brett A. Shumate
William H. Johnson
Wiley Rein LLP
Verizon
1776 K Street, NW
1320 North Courthouse Road, 9th Floor
Washington, DC 20006
Arlington, VA 22201
Counsel for Verizon
Counsel for Verizon
*John T. Scott, III
Walter E. Dellinger
Verizon Wireless
O’Melveny & Myers LLP
1300 I Street, NW
1625 Eye Street, NW
Suite 400 West
Washington, DC 20006
Washington, DC 20005
Counsel for Verizon
Counsel for Verizon

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 44 of 45
Samir C. Jain
Joel Marcus
Wilmer Cutler Pickering, et al.
Jacob M. Lewis
1875 Pennsylvania Avenue, NW
Austin C. Schlick
Washington, DC 20006
Richard Kiser Welch
Counsel for Verizon
FCC Office of General Counsel
445 12th Street, SW
Washington, DC 20554
Counsel for FCC
James Bradford Ramsay
Genevieve Morelli
General Counsel
ITTA
National Association of Regulatory
1101 Vermont Avenue, N.W.
Utility Commissioners
Suite 501
1101 Vermont Avenue
Washington, DC 20005
Suite 200
Counsel for ITTA
Washington, DC 20005
Counsel for NASUCA
Henry Goldberg
Harold J. Feld
Goldberg, Godles, Wiener & Wright
Public Knowledge
1229 Nineteenth Street, NW
1818 N Street, NW Ste. 410
Washington, DC 20036
Washington, DC 20036
Counsel for Open Internet
Counsel for Public Knowledge
Coalition
Nancy C. Garrison
Matthew F. Wood
Catherine G. O’Sullivan
Free Press
Robert J. Wiggers
501 Third Street, NW
U.S. Department of Justice
Suite 875
Antitrust Div,, Appellate, Rm. 3224
Washington, DC 20001
950 Pennsylvania Avenue, NW
Counsel for Free Press
Washington, D.C. 20530-0001
Counsel for the United States
R. Craig Lawrence
U.S. Attorney’s Office
555 4th Street, NW
Washington, D.C. 20530
Counsel for the United States

USCA Case #11-1355 Document #1385030 Filed: 07/23/2012 Page 45 of 45

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