On this 4th, Let’s Celebrate the 5th! Let’s Hope Net Neutrality Gets Tossed Out in Court.

by Mike Wendy on July 4, 2013

With the Supreme Court’s recent City of Arlington ruling, some observers believe that more attention will be given to Verizon’s constitutional claims in its upcoming Net Neutrality appeal.  Ordinarily in these types of disputes, such claims aren’t generally reached because the underlying statutory matter has been dealt with first, ending the matter.  With Arlington, however, there’s a possibility that the Court could find the Commission has the authority to issue its Net Neutrality rules (which is the main issue in dispute), and, if this happens, the remaining constitutional claims will likely have to be addressed.

Of these claims, the lion’s share of attention has been devoted to Verizon’s belief that the rules violate its First Amendment rights as a speaker.  What’s gotten less attention is Verizon’s so-called “takings” claim.  More specifically, the company feels that the FCC’s Net Neutrality rules violate the Fifth Amendment in that they compel a permanent physical occupation of the company’s private networks by third-parties without just compensation; and that the rules are an unconstitutional “regulatory takings” because they unreasonably impinge on the company’s ability to manage and make money from its private property.

Protecting private property – even that of billion-dollar corporations – is important stuff.  Our free society is built on those protections. I only wish Verizon had given a little more oomph to this aspect of its challenge, though.

In its initial appeal brief, Verizon gives it “takings” claim just one page in its 53-page argument.  This may be so because takings analysis, especially in a regulatory setting, is a hard challenge to succeed upon.  The law is a tangle and has not kept pace with how the Internet runs.

Seemingly confirming (or taking advantage of) this, the FCC rapidly concludes in about 200 words (near the end of its 100-plus page order) that its “open Internet rules pose no issue under the Fifth Amendment’s Takings Clause.” (Emphasis added)

The agency explains that the rules “simply require transparency and prevent broadband providers—when they voluntarily carry Internet traffic—from blocking or unreasonably discriminating in their treatment of that traffic.”


It seems quite the opposite to me.  The FCC’s rules compel accepting the traffic of all third-parties, all the time.  Providers can’t keep them and their capacity-choking, digital 0’s and 1’s off their property 24/7/365.  Forever.  Further, they deny carriers the ability to truly price, “discriminate” or prioritize their services as they see fit, even when providers lack market power.

Perhaps more upsetting is the fact that the FCC has imposed this takings via specious powers it says that Congress – albeit ambiguously – granted it.  Putting a finer point on this, the agency believes it can skate right up to the regulatory cliff without getting blown into the abyss of lawlessness because, though Congress didn’t affirmatively say it was OK to regulate Internet providers, it also didn’t say the agency couldn’t do it either.  Got that?  So, it’s OK to steal from and to press one group – the carriers – into the servitude of others – namely, the Internet’s edge.

In the agency’s view, the “public interest” demands that this public duty be undertaken at the cost of zero (to the edge, that is).  Too bad, so sad for the carriers – they should have expected this would occur.

At a broader level, I guess the FCC believes it can get away with this government-approved theft – I don’t think there’s any other way to characterize it – because Americans have been worn down through the slow-drip of Big Government programs to accept these continual usurpations.  And besides, in keeping the Internet “open” (whatever that means), Americans probably feel they’re getting something for nothing here, too.

Well, not really.

Throughout the tech sector, government policymakers, addled by special interest groups, want “stuff” that isn’t theirs.  Music.  Movies.  Software code.  Permanent digital easements to traverse the Internet.  Etcetera, etcetera.

How long can those who invest and take risk do this before they decide that it just isn’t worth it, especially if government can easily purloin private property simply because it wants it?

Not long.

Private property remains one of the purest and easily understood expressions of our liberty.  The Fifth Amendment was designed to stop government from stealing it and our labor, which built it.  The FCC’s Net Neutrality rules perform a proverbial five-finger discount of network providers’ private property and gives it to others without just compensation.  Let’s hope for Verizon, and for us, those confiscatory rules are overturned.

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