Net Neutrality – Governing Via Loopholes

by Mike Wendy on August 27, 2013

On September 9th, the U.S. Court of Appeals for the D.C. Circuit will hear Verizon’s challenge to the FCC’s Net Neutrality rules. Apart from the questionable legality of the rules, to me the FCC’s land grab has always exemplified the worse part of our liberty-eroding administrative state.

Give ‘em an inch and they’ll take a mile.  And that’s what they’ve done with the so-called “limited rules.”  They’re the camel’s nose under the tent.  If the rules stand, they will be employed to regulate anything or any behavior that touches or affects the Internet, no matter what the main author stated when crafting the regulation.

The crux of the dispute is whether Congress gave the FCC the authority to regulate the Internet in such a manner. It would seem easy enough to find that out.  Look to see if the words “the FCC may regulate the Internet” exist in the Communications Act.

You will not find them.

Undaunted, the FCC and its supporters essentially say, “Who cares?  Congress didn’t explicitly forbid the agency from regulating the Internet.  So, that loophole is all we need to regulate it.”  A recent Supreme Court ruling suggests that, technically, they might have a case.

But really, what’s right about taking control of a medium – one that annually contributes nearly a trillion dollars (and growing) to the U.S. GDP – via a technicality or loophole?


Congress could have allowed the FCC to regulate, but it didn’t.  Moreover, it didn’t hide an elephant in a mouse hole.  That should have ended the discussion.  But, no.  The FCC went ahead and issued its rules anyway, even after being previously defeated (and embarrassingly so) on the same issue, in front of the same court, which will hear the September 9th appeal.

Why has the agency gone back for another bite at that rotten apple?  Well, the FCC knows that FDR-era agencies like it are granted huge amounts of deference by the courts, and so there’s virtually no harm for the agency in trying to “fix” what isn’t broken (especially when campaign promises must be met).  The upside – i.e., more power and all that that entails – is worth the trouble (for the agency and the favored industries subsidized by the unjustified conscription of private property, that is).

Sadly, a lot of our law is made this way.  According to Wayne Crews at the CEI, “The regulatory state is growing in large part because the executive branch increasingly uses its control over rulemaking to enact policies it could not get approved by Congress.”

Imagine that?  When it serves Uncle Sam (and his cronies), he can certainly be quite efficient and cut out the middleman.

Quite frankly, the FCC’s Net Neutrality loophole, er, rule is cheating at its worst; it’s a willful attempt by partisan, unelected FCC officials to skirt Congress’ deregulatory policy, as plainly expressed in the Communications Act.  Contrary to what the FCC believes, its illicit behavior has a real cost.  Governing through loopholes harms markets and consumers.  More importantly, it undermines trust in government when its apparatus works to intentionally short-circuit our self-governance.

There must be a better way to achieve Hope and Change than through administrative thievery and chicanery?

Here’s to hoping the Court agrees and throws the rule out (again).


Johnny Broadband September 7, 2013 at 4:27 pm

That’s right the FCC should throw out the “Net Neutrality loophole” and just classify it as a telecommunications service subjecting it to common carriage regulations; Something the Ninth Circuit Court of Appeals had already decided it was.
In fact thanks to former FCC chairman Michael Powell internet access service has been completely deregulated consequently leaving consumers with one broadband ISP per wire. Remember dial-up days when during it’s peak there were 15 ISP’s per 100,000 internet subscribers on one wire? That number never dropped below 10. Now what choice do we have besides take it or leave it?

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