Federal Appeals Court FCC Ruling 622011
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Date Created:April 1, 2010
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United States Court Appeals FOR THE DISTRICT COLUMBIA CIRCUIT Argued January 2010 Decided April 2010 No. 08-1291 COMCAST CORPORATION, PETITIONER FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES AMERICA, RESPONDENTS NBC UNIVERSAL, AL., INTERVENORS Petition for Review Order the Federal Communications Commission Helgi Walker argued the cause for petitioner. With her the briefs were Eve Klindera Reed, Elbert Lin, David Murray, James Casserly, and David Solomon. Howard Symons argued the cause for intervenors National Cable Telecommunications Association and NBC Universal. With him the briefs were Neal Goldberg, Michael Schooler, and Margaret Tobey. Richard Cotton entered appearance. Kyle Dixon was the brief for amici curiae Professors James Speta and Glen Robinson and The Progress and Freedom Foundation support petitioner. Austin Schlick, General Counsel, Federal Communications Commission, argued the cause for respondents. With him the brief were Catherine O'Sullivan and Nancy Garrison, Attorneys, U.S. Department Justice, Joseph Palmore, Deputy General Counsel, Federal Communications Commission, Richard Welch, Deputy Associate General Counsel, and Joel Marcus, Counsel. Daniel Armstrong III, Associate General Counsel, entered appearance. Marvin Ammori argued the cause for intervenors Free Press, al. support respondents. With him the brief were Henry Goldberg, Harold Feld, and Andrew Jay Schwartzman. John Blevins was the brief for amici curiae Professors Jack Balkin, al. support respondents. Before: SENTELLE, Chief Judge, TATEL, Circuit Judge, and RANDOLPH, Senior Circuit Judge. Opinion for the Court filed Circuit Judge TATEL. TATEL, Circuit Judge: this case must decide whether the Federal Communications Commission has authority regulate Internet service providers network management practices. Acknowledging that has express statutory authority over such practices, the Commission relies section 4(i) the Communications Act 1934, which authorizes the Commission perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, may necessary the execution its functions. U.S.C. 154(i). The Commission may exercise this ancillary authority only demonstrates that its actionhere barring Comcast from interfering with its customers use peer-to-peer networking applicationsis reasonably ancillary the effective performance its statutorily mandated responsibilities. Am. Library Assn FCC, 406 F.3d 689, 692 (D.C. Cir. 2005). The Commission has failed make that showing. relies principally several Congressional statements policy, but under Supreme Court and D.C. Circuit case law statements policy, themselves, not create statutorily mandated responsibilities. The Commission also relies various provisions the Communications Act that create such responsibilities, but for variety substantive and procedural reasons those provisions cannot support its exercise ancillary authority over Comcasts network management practices. therefore grant Comcasts petition for review and vacate the challenged order. 2007 several subscribers Comcasts high-speed Internet service discovered that the company was interfering with their use peer-to-peer networking applications. See Peter Svensson, Comcast Blocks Some Internet Traffic, ASSOCIATED PRESS, Oct. 19, 2007. Peer-to-peer programs allow users share large files directly with one another without going through central server. Such programs also consume significant amounts bandwidth. Challenging Comcasts action, two non-profit advocacy organizations, Free Press and Public Knowledge, filed complaint with the Federal Communications Commission and, together with coalition public interest groups and law professors, petition for declaratory ruling. Compl. Free Press Public Knowledge Against Comcast Corp., File No. EB-08-IH-1518 (Nov. 2007) (Compl.); Pet. Free Press al. for Decl. Ruling, Docket No. 07-52 (Nov. 2007) (Pet.). Both filings argued that Comcasts actions violat[ed] the FCCs Internet Policy Statement. Compl. Pet. Issued two years earlier, that statement adopt[ed] the principles that consumers are entitled access the lawful Internet content their choice [and] run applications and use services their choice. Appropriate Framework for Broadband Access the Internet Over Wireline Facilities, F.C.C.R. 14,986, 14,988, (2005). Comcast defended its interference with peer-to-peer programs necessary manage scarce network capacity. Comments Comcast Corp. 14, Docket No. 07-52 (Feb. 12, 2008). Following period public comment, the Commission issued the order challenged here. Formal Compl. Free Press Public Knowledge Against Comcast Corp. for Secretly Degrading Peer-to-Peer Applications, F.C.C.R. 13,028 (2008) (Order). The Commission began concluding not only that had jurisdiction over Comcasts network management practices, but also that could resolve the dispute through adjudication rather than through rulemaking. Id. 13,03350, 1240. the merits, the Commission ruled that Comcast had significantly impeded consumers ability access the content and use the applications their choice, id. 13,054, 44, and that because Comcast ha[d] several available options could use manage network traffic without discriminating against peer-to-peer communications, id. 13,057, 49, its method bandwidth management contravene[d] federal policy, id. 13,052, 43. Because then Comcast had agreed adopt new system for managing bandwidth demand, the Commission simply ordered make set disclosures describing the details its new approach and the companys progress toward implementing it. Id. 13,05960, 54. The Commission added that injunction would automatically issue should Comcast either fail make the required disclosures renege its commitment. Id. 13,060, 55. Although Comcast complied with the Order, now petitions for review, presenting three objections. First, contends that the Commission has failed justify exercising jurisdiction over its network management practices. Second, argues that the Commissions adjudicatory action was procedurally flawed because circumvented the rulemaking requirements the Administrative Procedure Act and violated the notice requirements the Due Process Clause. Finally, asserts that parts the Order are poorly reasoned arbitrary and capricious. beginand endwith Comcasts jurisdictional challenge. II. Through the Communications Act 1934, ch. 652, Stat. 1064, amended over the decades, U.S.C. 151 seq., Congress has given the Commission express and expansive authority regulate common carrier services, including landline telephony, id. 201 seq. (Title the Act); radio transmissions, including broadcast television, radio, and cellular telephony, id. 301 seq. (Title III); and cable services, including cable television, id. 521 seq. (Title VI). this case, the Commission does not claim that Congress has given express authority regulate Comcasts Internet service. Indeed, its still-binding 2002 Cable Modem Order, the Commission ruled that cable Internet service neither telecommunications service covered Title the Communications Act nor cable service covered Title VI. High-Speed Access the Internet Over Cable and Other Facilities, F.C.C.R. 4798, 4802, (2002), affd Natl Cable Telecomms. Assn Brand Internet Servs., 545 U.S. 967 (2005). The Commission therefore rests its assertion authority over Comcasts network management practices the broad language section 4(i) the Act: The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, may necessary the execution its functions, U.S.C. 154(i). Order, F.C.C.R. 13,036, 15. Courts have come call the Commissions section 4(i) power its ancillary authority, label that derives from three foundational Supreme Court decisions: United States Southwestern Cable Co., 392 U.S. 157 (1968), United States Midwest Video Corp., 406 U.S. 649 (1972) (Midwest Video I), and FCC Midwest Video Corp., 440 U.S. 689 (1979) (Midwest Video II). All three cases dealt with Commission jurisdiction over early cable systems time when, with the Internet today, the Communications Act gave the Commission express authority regulate such systems. (Title VI, which gives the Commission jurisdiction over cable services, was not added the statute until 1984. See Cable Communications Policy Act 1984, Pub. No. 98-549, Stat. 2779.) the first case, Southwestern Cable, the Supreme Court considered challenge Commission order restricting the geographic area which cable company could operate. 392 U.S. 160. that time, cable television, then known community antenna television (CATV), functioned quite differently than does today. Employing strategically located antennae, these early cable systems simply received over-the-air television broadcasts and retransmitted them cable their subscribers. Id. 16162. Although they rarely produced their own programming, they improved reception and allowed subscribers receive television programs from distant stations. Id. 16263. Seeking protect Commission-licensed local broadcasters, the Commission adopted rules limiting the extent which cable systems could retransmit distant signals and, the order issue Southwestern Cable, applied this policy particular company. The Supreme Court sustained that order, explaining that even though the then-existing Communications Act gave the Commission express authority over cable television, the Commission could nonetheless regulate cable television the extent reasonably ancillary the effective performance the Commissions various responsibilities for the regulation television broadcasting. Id. 178. Four years later, Midwest Video the Court again sustained the Commissions use its ancillary authority, this time support issuance regulation that required cable operators facilitate the creation new programs and transmit them alongside broadcast programs they captured from the air. 406 U.S. 670. Midwest Video II, the Court rejected the Commissions assertion ancillary authority, setting aside regulations that required cable systems make certain channels available for public use. 440 U.S. 70809. recently distilled the holdings these three cases into two-part test. American Library Assn FCC, wrote: The Commission may exercise ancillary jurisdiction only when two conditions are satisfied: (1) the Commissions general jurisdictional grant under Title [of the Communications Act] covers the regulated subject and (2) the regulations are reasonably ancillary the Commissions effective performance its statutorily mandated responsibilities. 406 F.3d 69192; see also Order, F.C.C.R. 13,035, n.64 (citing the American Library test). Comcast concedes that the Commissions action here satisfies the first requirement because the companys Internet service qualifies interstate and foreign communication wire within the meaning Title the Communications Act. U.S.C. 152(a). Whether the Commissions action satisfies American Librarys second requirement the central issue this case. III. Before addressing that issue, however, must consider two threshold arguments the Commission raises. First, asserts that given contrary position Comcast took California lawsuit, the company should judicially estopped from challenging the Commissions jurisdiction over the companys network management practices. Second, the Commission argues that even Comcasts challenge can proceed, need not through our usual ancillary authority analysis because recent Supreme Court decision, National Cable Telecommunications Assn Brand Internet Services, 545 U.S. 967, makes clear that the Commission had authority issue the Order. Courts may invoke judicial estoppel [w]here party assumes certain position legal proceeding, succeeds maintaining that position, [and then,] simply because his interests have changed, assume[s] contrary position. New Hampshire Maine, 532 U.S. 742, 749 (2001) (internal quotation marks omitted). For judicial estoppel apply, however, a partys later position must clearly inconsistent with its earlier position. Id. 750 (quoting United States Hook, 195 F.3d 299, 306 (7th Cir. 1999)). Doubts about inconsistency often should resolved assuming there disabling inconsistency, that the second matter may resolved the merits. 18B CHARLES ALAN WRIGHT, ARTHUR MILLER EDWARD COOPER, FEDERAL PRACTICE AND PROCEDURE 4477, 594 (2d ed. 2002). The Commissions estoppel argument rests the position Comcast took while defending against civil action California federal court. that case, one Comcasts Internet customers challenged the companys interference with peer-to-peer programs the same time Free Press and Public Knowledge were pressing their own challenges before the Commission. Comcast responded moving stay the litigation pending resolution the Commission proceedings. support, invoked the primary jurisdiction doctrine, arguing that a court obliged defer agency where the issue brought before court the process litigation through procedures originating the [agency]. Def.s Mem. Law Supp. Mot. for Pleadings 10, Hart Comcast Alameda, Inc., No. 07-6350 (N.D. Cal. 2008) (Comcast Cal. Mem.) (quoting Fed. Power Commn La. Power Light Co., 406 U.S. 621, 647 (1972)). language the Commission now emphasizes, Comcast continued: Any inquiry into whether Comcasts [peer-to-peer] management unlawful falls squarely within the FCCs subject matter jurisdiction. Id. Persuaded, the district court granted the requested stay. According the Commission, when Comcast argued that the Commission has subject matter jurisdiction over its disputed network management practices, was saying that any action the Commission prohibit those practices would satisfy both elements the American Library test and thus lie within the Commissions ancillary authority. Because Comcast prevailed [that] theory, the Commission contends, it should estopped from arguing the opposite here. Respts Br. 30. For its part, Comcast insists never argued that the Commission could justify exercising ancillary authority over its network management practices. Instead, claims that saying that the Commission possesses subject matter jurisdiction over those practices, was arguing more than what concedes here, namely that its Internet service constitutes communication wire within the meaning American Librarys first requirement. Interpreted that way, Comcasts California position does not conflict with the argument makes here, which rests American Librarys second requirement: that the Commission must show that its regulation Comcasts Internet service reasonably ancillary the Commissions effective performance its statutorily mandated responsibilities. 406 F.3d 692. Although the parties competing interpretations Comcasts California argument are both plausible, Comcasts more so. For one thing, its interpretation comports with the overall primary jurisdiction argument advanced that case. leading administrative law treatise explains, The question whether issue within [an] agencys primary jurisdiction different from the question whether the agency actually has exclusive statutory jurisdiction resolve issue. RICHARD PIERCE, JR., ADMINISTRATIVE LAW TREATISE 14.1, 1162 (5th ed. 2010). Specifically, for issue fall within agencys primary jurisdiction, the agency need not possess definite authority resolve it; rather, there need only sufficient statutory support for administrative authority that the agency should least requested proceed the first instance. Ricci Chicago Mercantile Exch., 409 U.S. 289, 304, 300 (1973) (holding that dispute fell within the Commodity Exchange Commissions primary jurisdiction where the Commodity Exchange Act at least arguably protected prohibited the conduct issue). Given this standard, and given that then, now, the Commission claimed ancillary authority over Comcasts network management practices, the company could plausibly argue the California case (as claims did) that deference the Commissions primary jurisdiction was appropriate merely because the disputed practices involved communication wireAmerican Librarys first requirement. And Comcast emphasized the California case, the Commission was already actively investigating the companys network management practices, Comcast Cal. Mem. 11, increasing the risk that the civil case could disrupt the regulatory process. See PIERCE, ADMINISTRATIVE LAW TREATISE 14.1, 1162 ([D]etermination the agencys primary jurisdiction involves pragmatic evaluation the advantages and disadvantages allowing the agency resolve issue the first instance.). Therefore, the California court could have fairly concluded under the primary jurisdiction doctrine that the Commission should determine the first instance whether regulating Comcasts network management practices would reasonably ancillary the Commissions effective performance its statutorily mandated responsibilities American Librarys second requirement. 406 F.3d 692. Reinforcing Comcasts interpretation, the Commission itself generally uses subject matter jurisdiction refer only the first part the American Library test rather than the test whole. For example, earlier Internet-related order (cited Comcast its California brief), the Commission wrote that may exercise its ancillary jurisdiction when Title the Act gives the Commission subject matter jurisdiction over the service regulated and the assertion jurisdiction reasonably ancillary the effective performance its various responsibilities. Appropriate Framework for Broadband Access the Internet Over Wireline Facilities, F.C.C.R. 14,853, 14,91314, 109 (2005) (emphasis added) (internal quotation marks and alteration omitted); accord Consumer Information and Disclosure, F.C.C.R. 11,380, 11,400, (2009); IP-Enabled Services, F.C.C.R. 6039, 604445, (2009); High-Cost Universal Service Support, F.C.C.R. 6475, 6540, 101 (2008). thus not interpret Comcasts California argument inconsistent with its argument here, let alone clearly so. New Hampshire, 532 U.S. 750 (internal quotation marks omitted). Because Comcast never clearly argued the California litigation that the Commissions assertion authority over the companys network management practices would reasonably ancillary the Commissions effective performance its statutorily mandated responsibilities (American Librarys second requirement), 406 F.3d 692, that question remains for answer. The Commissions second threshold argument that the Supreme Courts decision Brand already decided the jurisdictional question here. Respts Br. 20. that case, the Court reviewed the Commissions 2002 Cable Modem Order, supra 56, which removed cable Internet service from Title and Title oversight classifying information service. See Brand 545 U.S. 978. Challenging that determination, Brand argued that cable Internet actually comprises bundle two services: information service not subject Commission regulation and telecommunications service subject mandatory Title regulation. Id. 99091. Brand pressed this argument because Title applied cable Internet, then, under its view, cable companies would have unbundle the components their Internet services, thus allowing Brand and other independent Internet service providers (ISPs) use the telecommunications component those bundles offer competing Internet service over cable company wires. Brand Respts Br. 10, Brand 545 U.S. 967 (No. 04-277) ([I]f the telecommunications component cable modem service telecommunications service, and hence common carriage, [c]ustomers then will able choose their provider Internet services.). Although the Supreme Court acknowledged that cable Internet service does contain telecommunications component, deferred the Commissions determination that this component functionally integrated into single offering properly classified information service. 545 U.S. 991. Using language the Commission now emphasizes, the Court went say that the Commission remains free impose special regulatory duties [cable Internet providers] under its Title ancillary jurisdiction. Id. 996. particular, the Court suggested that the Commission could likely require cable companies allow independent ISPs access their facilities pursuant its ancillary authority, rather than using Title Brand urged. Id. 1002. According the Commission, this means that the FCC has authority over [information service providers] under its Title ancillary jurisdiction. Respts Br. 20. Comcast insists that the references ancillary jurisdiction Brand are dicta: Brand presented the question whether the FCC had permissibly classified cable Internet services information services, not whether any particular regulation such services was within the agencys statutory authority. Petrs Br. 53. Although Comcast may well correct, carefully considered language the Supreme Court, even technically dictum, generally must treated authoritative. United States Oakar, 111 F.3d 146, 153 (D.C. Cir. 1997) (internal quotation marks and alteration omitted). the end, however, need not decide whether the Courts discussion ancillary authority Brand qualifies authoritative, for even does the Commission stretches the Courts words too far. leaping from Brand Xs observation that the Commissions ancillary authority may allow impose some kinds obligations cable Internet providers claim plenary authority over such providers, the Commission runs afoul Southwestern Cable and Midwest Video Southwestern Cable, which the Court first recognized the Commissions ancillary authority, expressly reserved for future cases the question whether particular regulations fall within that power. Although the Court upheld the cable television order issue, declined to determine detail the limits the Commissions authority regulate CATV. 392 U.S. 178. Then Midwest Video the Court made clear that the permissibility each new exercise ancillary authority must evaluated its own terms. That is, the Court asked whether the particular regulation issue was reasonably ancillary the effective performance the Commissions various responsibilities for the regulation television broadcasting. 406 U.S. 670 (plurality opinion) (internal quotation marks omitted); see also id. 675 (Burger, C.J., concurring). Contrary the kind inference the Commission would have draw from Brand nothing Midwest Video even hints that Southwestern Cables recognition ancillary authority over one aspect cable television meant that the Commission had plenary authority over all aspects cable. made just this point National Assn Regulatory Utility Commissioners FCC, 533 F.2d 601 (D.C. Cir. 1976) (NARUC II). There reviewed series Commission orders that preempted state regulation non-video uses cable systems, including precursors modern cable modem service. See id. 616 ([T]he point-to-point communications involve one computer talking another .). Leaning its recent victories Southwestern Cable and Midwest Video the Commission arguedsimilar the way uses Brand herethat the combined force those two affirmances FCC powers over cable must seen establishing jurisdiction over all activities cable operators. Id. 611. rejected that argument, explaining that Southwestern Cable and Midwest Video foreclosed the Commissions broad view ancillary authority. pointed out that Southwestern Cable the Court stated explicitly that its holding was limited reasonably ancillary activities, and expressly declined comment the Commissions authority, any, regulate CATV under any other circumstances for any other purposes. Id. 612 (quoting Southwestern Cable, 392 U.S. 178). similarly noted that Midwest Video the plurality relied explicitly the Southwestern reasoning, and devoted substantial attention establishing the requisite ancillariness between the Commissions authority over broadcasting and the particular regulation before the Court. Id. 613. Neither case, concluded, recogniz[ed] any sweeping authority over [cable] whole. Id. 612. Instead, they command[ed] that each and every assertion jurisdiction over cable television must independently justified reasonably ancillary the Commissions power over broadcasting. Id. (emphasis added). Echoing this interpretation, the Supreme Court Midwest Video described Southwestern Cable as conferring the Commission circumscribed range power regulate cable television, determination reaffirmed Midwest Video 440 U.S. 696. The question now before us, the Court continued, is whether the [Communications] Act, construed these two cases, authorizes the capacity and access regulations that are here under challenge. Id. The Court ultimately concluded that did not, thus reinforcing the principle that the Commission must defend its exercise ancillary authority case-bycase basis. sure, Brand dealt with the Internet, not cable television. Nothing Brand however, suggests that the Court was abandoning the fundamental approach ancillary authority set forth Southwestern Cable, Midwest Video and Midwest Video II. Accordingly, the Commission cannot justify regulating the network management practices cable Internet providers simply citing Brand Xs recognition that may have ancillary authority require such providers unbundle the components their services. These are altogether different regulatory requirements. Brand more dictates the result this case than Southwestern Cable dictated the results Midwest Video NARUC II, and Midwest Video II. The Commissions exercise ancillary authority over Comcasts network management practices must, repeat, be independently justified. NARUC II, 533 F.2d 612. that issue that now turn. IV. The Commission argues that the Order satisfies American Librarys second requirement because reasonably ancillary the Commissions effective performance its responsibilities under several provisions the Communications Act. These provisions fall into two categories: those that the parties agree set forth only congressional policy and those that least arguably delegate regulatory authority the Commission. consider each turn. The Commission relies principally section 230(b), part provision entitled Protection for private blocking and screening offensive material, U.S.C. 230, that grants civil immunity for such blocking providers interactive computer services, id. 230(c)(2). Setting forth the policies underlying this protection, section 230(b) states, relevant part, that [i]t the policy the United States promote the continued development the Internet and other interactive computer services and to encourage the development technologies which maximize user control over what information received individuals, families, and schools who use the Internet. Id. 230(b). this case the Commission found that Comcasts network management practices frustrated both objectives. Order, F.C.C.R. 13,05253, 43. addition section 230(b), the Commission relies section which Congress set forth its reasons for creating the Commission 1934: For the purpose regulating interstate and foreign commerce communication wire and radio make available, far possible, all the people the United States rapid, efficient, Nation-wide, and world-wide wire and radio communication service reasonable charges, there created commission known the Federal Communications Commission . U.S.C. 151. The Commission found that prohibiting unreasonable network discrimination directly furthers the goal making broadband Internet access service both rapid and efficient. Order, F.C.C.R. 13,03637, 16. Comcast argues that neither section 230(b) nor section can support the Commissions exercise ancillary authority because the two provisions amount nothing more than congressional statements policy. Petrs Br. 46. Such statements, Comcast contends, are not operative part the statute, and not enlarge confer powers administrative agencies. such, they necessarily fail set forth statutorily mandated responsibilities within the meaning American Library. Id. (citations, internal quotation marks, and alteration omitted). The Commission acknowledges that section 230(b) and section are statements policy that themselves delegate regulatory authority. Still, the Commission maintains that the two provisions, like all provisions the Communications Act, set forth statutorily mandated responsibilities that can anchor the exercise ancillary authority. The operative provisions statutes are those which declare the legislative will, the Commission asserts. Respts Br. (internal quotation marks and alteration omitted). Here, the legislative will has been declared Congress the form policy, along with express grant authority the FCC perform all actions necessary execute and enforce all the provisions the Communications Act. Id. support its reliance congressional statements policy, the Commission points out that both Southwestern Cable and Midwest Video the Supreme Court linked the challenged Commission actions the furtherance various congressional goals, objectives, and policies. See, e.g., Southwestern Cable, 392 U.S. 175; Midwest Video 406 U.S. 665, 669 (plurality opinion). particular, the Commission notes that Midwest Video the plurality accepted its argument that the Commissions concern with CATV carriage broadcast signals extends requiring CATV affirmatively further statutory policies. 406 U.S. 664 (plurality opinion) (emphasis added) (internal quotation marks omitted). According the Commission, since congressional statements policy were sufficient support ancillary authority over cable television, may likewise rely such statementssection 230(b) and section 1to exercise ancillary authority over the network management practices Internet providers. read Southwestern Cable and Midwest Video quite differently. those cases, the Supreme Court relied policy statements not because, standing alone, they set out statutorily mandated responsibilities, but rather because they did conjunction with express delegation authority the Commission, i.e., Title IIIs authority regulate broadcasting. Southwestern Cable, the Commission argued that restricting the geographic reach cable television was necessary fulfill its Title III responsibility foster local broadcast service. The Court agreed, explaining that Congress has imposed upon the Commission the obligation providing widely dispersed radio and television service, with fair, efficient, and equitable distribution service among the several States and communities. The Commission has, for this and other purposes, been granted authority allocate broadcasting zones areas, and provide regulations as may deem necessary prevent interference among the various stations. 392 U.S. 17374 (citation and footnote omitted) (quoting REP. NO. 86-923, (1959), U.S.C. 307(b), 303(f)). The Court concluded that the Commission has reasonably found that the successful performance these duties demands prompt and efficacious regulation community antenna television systems. Id. 177. Nonetheless, the Court emphasize[d] that the authority which recognize today restricted that reasonably ancillary the effective performance the Commission's various responsibilities for the regulation television broadcasting. Id. 178 (emphasis added). Midwest Video the Court again made clear that was sustaining the challenged regulationrequiring cable companies originate their own programmingonly because its connection the Commissions Title III authority over broadcasting. four-Justice plurality agreed with the Commission that the challenged rule would further the achievement long-established regulatory goals the field television broadcasting increasing the number outlets for community self-expression and augmenting the publics choice programs and types services. 406 U.S. 66768 (plurality opinion) (internal quotation marks omitted). Because the regulation preserve[d] and enhance[d] the integrity broadcast signals satisfied Southwestern Cable, i.e., was reasonably ancillary the effective performance the Commission's various responsibilities for the regulation television broadcasting. Id. 670 (emphasis added) (internal quotation marks omitted). Chief Justice Burger made the same point controlling concurring opinion: CATV dependent totally broadcast signals and significant link the system whole and therefore must seen within the jurisdiction the Act. Id. 675 (Burger, C.J., concurring). That said, warned, candor requires acknowledgment that the Commissions position strains the outer limits of its authority. Id. 676. The Commission exceeded those outer limits both NARUC and Midwest Video II. NARUC II, the Commission defended its exercise ancillary authority over non-video cable communications (as does here with respect Comcasts network management practices) the basis section 1s overall statutory mandate make available, far possible, all the people the United States rapid, efficient, [N]ation-wide, and world-wide wire and radio communications service. 533 F.2d 606 (internal quotation marks and alteration omitted). The Commission reasoned that this language called for the development nationwide broadband communications grid which cable systems should play important part. Id. (internal quotation marks omitted). rejected that argument. Relying Southwestern Cable and Midwest Video began explaining that the Commissions ancillary authority is really incidental to, and contingent upon, specifically delegated powers under the Act. Id. 612 (emphasis added). Applying that standard, found difficult see how any action which the Commission might take concerning two-way cable communications could have its primary impact the furtherance any broadcast purpose. Id. 615. Because the regulations had not been justified reasonably ancillary the Commissions power over broadcasting, id. 612, vacated them. Midwest Video II, the Supreme Court rejected the Commissions assertion ancillary authority impose public access requirement certain cable channels because doing would relegate cable systems common-carrier status. 440 U.S. 70001. Pointing out that the Communications Act expressly prohibits common carrier regulation broadcasters, id. 702, the Court held that given the derivative nature ancillary jurisdiction the same prohibition applied the Commissions regulation cable providers. The Commission had opposed this logic, arguing that could regulate so long the rules promote statutory objectives. Id. The Court rejected that broad claim and, revealing the flaw the argument the Commission makes here, emphasized that without reference the provisions the Act directly governing broadcasting, the Commission's [ancillary] jurisdiction would unbounded. Id. 706 (emphasis added). Though afforded wide latitude its supervision over communication wire, the Court added, the Commission was not delegated unrestrained authority. Id. The teaching Southwestern Cable, Midwest Video Midwest Video II, and NARUC IIthat policy statements alone cannot provide the basis for the Commissions exercise ancillary authorityderives from the axiomatic principle that administrative agencies may [act] only pursuant authority delegated them Congress. Am. Library, 406 F.3d 691. Policy statements are just thatstatements policy. They are not delegations regulatory authority. sure, statements congressional policy can help delineate the contours statutory authority. Consider, for example, the various services over which the Commission enjoys express statutory authority. When exercising its Title authority set just and reasonable rates for phone service, U.S.C. 201(b), its Title III authority grant broadcasting licenses the public convenience, interest, necessity, id. 307(a), its Title authority prohibit unfair methods competition cable operators that limit consumer access certain types television programming, id. 548(b), the Commission must bear mind section 1s objective Nation-wide wire and radio communication service reasonable charges, id. 151. all three examples, section 1s policy goal undoubtedly illuminates the scope the authority delegated [the Commission] Congress, Am. Library, 406 F.3d 691though Titles II, III, and that the delegating. too with respect the Commissions section 4(i) ancillary authority. Although policy statements may illuminate that authority, Title II, III, which the authority must ultimately ancillary. this case the Commission cites neither section 230(b) nor section shed light any express statutory delegation authority found Title II, III, VI, or, for that matter, anywhere else. That is, unlike the way successfully employed policy statements Southwestern Cable and Midwest Video the Commission does not rely section 230(b) section argue that its regulation activity over which concededly has express statutory authority (here Comcasts Internet management practices) necessary further its regulation activities over which does have express statutory authority (here, for example, Comcasts management its Title cable services). this respect, this case just like NARUC II. the record before us, see no relationship whatever, NARUC II, 533 F.2d 616, between the Order and services subject Commission regulation. Perhaps the Commission could use section 230(b) section demonstrate such connection, but that not how employs them here. Instead, the Commission maintains that congressional policy itself creates statutorily mandated responsibilities sufficient support the exercise section 4(i) ancillary authority. Not only this argument flatly inconsistent with Southwestern Cable, Midwest Video Midwest Video II, and NARUC II, but accepted would virtually free the Commission from its congressional tether. the Court explained Midwest Video II, without reference the provisions the Act expressly granting regulatory authority, the Commissions [ancillary] jurisdiction would unbounded. 440 U.S. 706. Indeed, Commission counsel told oral argument that just the Order seeks make Comcasts Internet service more rapid and efficient, Order, F.C.C.R. 13,03637, 16, the Commission could someday subject Comcasts Internet service pervasive rate regulation ensure that the company provides the service reasonable charges, U.S.C. 151. Oral Arg. Tr. 5859. Were accept that theory ancillary authority, see reason why the Commission would have stop there, for can think few examples regulations that apply Title common carrier services, Title III broadcast services, Title cable services that the Commission, relying the broad policies articulated section 230(b) and section would unable impose upon Internet service providers. Midwest Video the Commission strain[ed] the outer limits even the open-ended and pervasive jurisdiction that has evolved decisions the Commission and the courts, 406 U.S. 676 (Burger, C.J., concurring), and NARUC and Midwest Video exceeded those limits, then here seeks shatter them entirely. Attempting avoid this conclusion, the Commission argues that several more recent cases upheld its use ancillary authority the basis policy statements alone. each those cases, however, sustained the exercise ancillary authority because, unlike here, the Commission had linked the cited policies express delegations regulatory authority. The Commission places particular emphasis Computer and Communications Industry Assn FCC, 693 F.2d 198 (D.C. Cir. 1982) (CCIA). There considered challenge the Commissions landmark 1980 Computer Order, which the Commission set forth regulatory ground rules for common carriers that provided so-called enhanced services, i.e., precursors modern information services like cable Internet. See Amend. 64.702 the Commns Rules and Regulations (Second Computer Inquiry), F.C.C.2d 384, 38589, 113 (1980). The petitioners argued that two aspects the Computer Order exceeded the Commissions ancillary authority. First, the Commission had ruled that ATT, then the monopoly telephone provider throughout most the nation, could offer enhanced services only through separate subsidiary. CCIA, 693 F.2d 205. Second, the Commission had mandated that all common carriers unbundle charges for consumer premises equipment (CPE)i.e., telephones, computer terminals, and other similar devicesfrom their regulated tariffs. Id. sustained both requirements. Emphasizing, here, that Southwestern Cable limited the Commissions jurisdiction that which reasonably ancillary the effective performance the Commissions various responsibilities, explained that [o]ne those responsibilities assure nationwide system wire communications services reasonable prices. Id. 213 (internal quotation marks omitted). According the Commission, this latter language demonstrates that section describes statutorily mandated responsibilities. But the Commission reads our statement out context. The crux our decision CCIA was that its Computer Order the Commission had linked its exercise ancillary authority its Title responsibility over common carrier ratesjust the kind connection statutory authority missing here. Thus, with respect the ATT component the order, relied the Commissions finding that [r]egulation enhanced services was necessary prevent ATT from burdening its basic transmission service customers with part the cost providing competitive enhanced services. Id. Given [the] potentially symbiotic relationship between competitive and monopoly services, concluded that the agency charged with ensuring that monopoly rates are just and reasonable can legitimately exercise jurisdiction over the provision competitive services. Id. made the same point with respect the orders CPE component: [E]xercising jurisdiction over CPE was necessary carry out [the Commissions] duty assure the availability transmission services reasonable rates. Id. So, when wrote that [o]ne [the Commissions] responsibilities assure nationwide system wire communications services reasonable prices, id., were using section 1s language just the way required Southwestern Cable, Midwest Video Midwest Video II, and NARUC II: for the light sheds the Commissions Title ratemaking power. other words, viewed the Commissions Computer Orderlike the Supreme Court had viewed the regulations issue Southwestern Cableas regulation services otherwise beyond the Commissions authority order prevent frustration regulatory scheme expressly authorized statute. The Commissions reliance Rural Telephone Coalition FCC, 838 F.2d 1307 (D.C. Cir. 1988), fares better. There upheld the Commissions creation Universal Service Fund provide subsidies for telephone service rural and other high-cost areas. Again borrowing the language section held that [a]s the Universal Service Fund was proposed order further the objective making communication service available all Americans reasonable charges, the proposal was within the Commissions statutory authority. Id. 1315. Contrary the Commissions argument, however, Rural Telephone, like CCIA, rested not section alone, but the fact that creation the Universal Service Fund was ancillary the Commissions Title responsibility set reasonable interstate telephone rates. True, the Commission observes, our discussion ancillary authority never cites Title II. But any such citation would simply have restated the obvious given that the Commission established the Universal Service Fund for the very purpose ensur[ing] that telephone rates are within the means the average subscriber all areas the country. Id. 131112 (emphasis added) (quoting Amend. Pt. the Commns Rules and Establishment Joint Bd., F.C.C.2d 781, 795, (1984)). Next the Commission cites New York State Commission Cable Television FCC, 749 F.2d 804 (D.C. Cir. 1984), which considered challenge Commission order preempting state regulation early satellite television. Because petitioner there never argued that the Commissions exercise ancillary authority lacked sufficient grounding express statutory authority, New York State Commission did not address the issue now face. See id. 808 (describing petitioners challenge). Still, sustaining the Commissions action, noted that [i]n its preemption order the Commission based its authority over [satellite television] upon the federal interest the unfettered development interstate transmission satellite signals. Id. 808 (quoting Earth Satellite Commcns, Inc., F.C.C.2d 1223, 1230, (1983)). According the Commission, this language demonstrates that ancillary authority may grounded policy alone. Not so. Our statement does nothing more than clearly and accurately describe what the Commission actually did, i.e., supply policy justification for its decision. Significantly for the issue before here, the Commissions preemption order also expressly linked its exercise ancillary authority over satellite television its Title III authority over users radio spectrum. The Commission noted that the reception facilities that states sought regulate (satellite dishes hotel and apartment building roofs) initially were subject Commission licensing, calling these receivers absolutely essential instrumentalities radio broadcasting. Earth Satellite Commcns, F.C.C.2d 1231, (internal quotation marks omitted). The Commission also cited section 303, which provides that the Commission public convenience, interest, necessity requires, shall [c]lassify radio stations; [p]rescribe the nature the service rendered each class licensed stations and each station within any class; [a]ssign bands frequencies the various classes stations, and on. U.S.C. 303. These express delegations authority contrast sharply with the general policies set forth section 230(b) and section The Commission next relies National Assn Regulatory Utility Commissioners FCC, 880 F.2d 422 (D.C. Cir. 1989) (NARUC III), which considered challenge its decision preempt state regulation inside wiringtelephone wires within customers home place business. Id. 425. The Commission had found inside wiring beyond the scope its Title regulation and simultaneously preempted state regulation such wiring. held that the Commission had authority issue the preemption orders insofar necessary to encourage competition the provision, installation, and maintenance inside wiring. Id. 42930. Although did agree with the FCC that this policy [was] consistent with the goals the Act, and that [had] the authority implement this policy with respect interstate communications, id. (citation omitted), petitioners that case had conceded that inside wiring installation and maintenance are integral telephone communication, id. 427 (emphasis added)a fact critical the Commissions exercise preemption authority. its orders, the Commission had emphasized that [o]ur prior preemption decisions have generally been limited activities that are closely related the provision services and which affect the provision interstate services. Detariffing the Installation and Maintenance Inside Wiring, F.C.C.R. 1190, 1192, (1986). The term services referred common carrier communication services within the scope the Commissions Title jurisdiction. Id. In short, the Commission explained, the interstate telephone network will not function efficiently possible without the preemptive detariffing inside wiring installation and maintenance. Id. (emphasis added). The Commissions preemption state regulation inside wiring was thus ancillary its regulation interstate phone service, precisely the kind link express delegated authority that absent this case. The Commission cites several additional cases, but none support its expansive view ancillary authority. Two decisions, like the many have already discussed, upheld the Commissions exercise ancillary authority because, unlike here, the Commission had linked its action statutory delegation regulatory authority. See United Video, Inc. FCC, 890 F.2d 1173, 118283 (D.C. Cir. 1989) (upholding rules that, like those upheld Southwestern Cable, limited the ability cable companies import programming into broadcasters market); GTE Serv. Corp. FCC, 474 F.2d 724, 72930 (2d Cir. 1973) (upholding Commission regulation data processing activities common carriers based the Commissions concern that the statutory obligation the communication common carrier provide adequate and reasonable services could adversely affected). another case, rejected the Commissions argument, similar the one makes here, that could exercise ancillary authority the basis policy alone. Motion Picture Assn Am. FCC, 309 F.3d 796, 80607 (D.C. Cir. 2002) (finding the Commissions argument that [its] video description rules are obviously valid communications policy goal and the public interest insufficient justify its exercise ancillary authority (internal quotation marks omitted)). And two decisions, ancillary authority was either never addressed, Natl Broad. Co. United States, 319 U.S. 190 (1943) (reviewing the Commissions exercise its express licensing power over broadcasting stations under section 303, U.S.C. 303), addressed only passing, ATT Corp. Iowa Utils. Bd., 525 U.S. 366, 37980 (1999) (mentioning the existence the Commissions ancillary authority the course interpreting another provision the Act). This brings the second category statutory provisions the Commission relies support its exercise ancillary authority. Unlike section 230(b) and section each these provisions could least arguably read delegate regulatory authority the Commission. begin with section 706 the Telecommunications Act 1996, which provides that [t]he Commission shall encourage the deployment reasonable and timely basis advanced telecommunications capability all Americans utilizing price cap regulation, regulatory forbearance, measures that promote competition the local telecommunications market, other regulating methods that remove barriers infrastructure investment. U.S.C. 1302(a). the Commission points out, section 706 does contain direct mandatethe Commission shall encourage . earlier, still-binding order, however, the Commission ruled that section 706 does not constitute independent grant authority. Deployment Wireline Servs. Offering Advanced Telecomms. Capability, F.C.C.R. 24,012, 24,047, (1998) (Wireline Deployment Order). Instead, the Commission explained, section 706 directs the Commission use the authority granted other provisions encourage the deployment advanced services. Id. 24,045, 69. The Commission now insists that this language refers only to whether section 706(a) supported forbearance authority, Respts Br. 41, i.e., the Commissions authority free regulated entities from their statutory obligations certain circumstances, see U.S.C. 160. According the Commission, was not opining more generally the effect section 706 ancillary authority. Respts Br. 41. But the order itself says otherwise: [S]ection 706(a) does not constitute independent grant forbearance authority authority employ other regulating methods. Wireline Deployment Order, F.C.C.R. 24,044, (emphasis added). Because the Commission has never questioned, let alone overruled, that understanding section 706, and because agencies may not depart from prior policy sub silentio, FCC Fox Television Stations, Inc., 129 Ct. 1800, 1811 (2009), the Commission remains bound its earlier conclusion that section 706 grants regulatory authority. Implying that this court has done what the Commission has not, the Commission points recent decision which wrote, The general and generous phrasing 706 means that the FCC possesses significant, albeit not unfettered, authority and discretion settle the best regulatory deregulatory approach broadband. Hoc Telecomms. Users Comm. FCC, 572 F.3d 903, 90607 (D.C. Cir. 2009). that case, however, cited section 706 merely support the Commissions choice between regulatory approaches clearly within its statutory authority under other sections the Act, and upheld the Commissions refusal forbear from certain regulation business broadband lines neither arbitrary nor capricious. Nowhere did question the Commissions determination that section 706 does not delegate any regulatory authority. The Commissions reliance section 706 thus fails. the case section 230(b) and section the Commission seeking use its ancillary authority pursue stand-alone policy objective, rather than support its exercise specifically delegated power. The Commissions attempt tether its assertion ancillary authority section 256 the Communications Act suffers from the same flaw. Section 256 directs the Commission establish procedures for oversight coordinated network planning for the effective and efficient interconnection public telecommunications networks. U.S.C. 256(b)(1). language unmentioned the Commission, however, section 256 goes state that [n]othing this section shall construed expanding any authority that the Commission otherwise has under law, id. 256(c)precisely what the Commission seeks here. The Commission next cites section 257. Enacted part the Telecommunications Act 1996, that provision gave the Commission fifteen months complete proceeding for the purpose identifying and eliminating, regulations pursuant its authority under this chapter (other than this section), market entry barriers for entrepreneurs and other small businesses the provision and ownership telecommunications services and information services. U.S.C. 257(a). Although the section 257 proceeding now complete, that provision also directs the Commission report Congress every three years any remaining barriers. See 257 Proceeding Identify and Eliminate Mkt. Entry Barriers for Small Bus., F.C.C.R. 16,802 (1997) (completing original proceeding); U.S.C. 257(c) (requiring ongoing reports). readily accept that certain assertions Commission authority could reasonably ancillary the Commissions statutory responsibility issue report Congress. For example, the Commission might impose disclosure requirements regulated entities order gather data needed for such report. But the Commissions attempt dictate the operation otherwise unregulated service based nothing more than its obligation issue report defies any plausible notion ancillariness. See Motion Picture Assn Am., 309 F.3d 80102 (holding that order requiring that broadcasters incorporate video descriptions into certain television programs fell outside the Commissions ancillary authority even though had been directed produce report the subject). Next the Commission argues that its exercise authority over Comcasts network management practices ancillary its section 201 common carrier authoritythough the section 201 argument the Commission sets forth its brief very different from the one appearing the Order. indicated above, section 201 provides that [a]ll charges, practices, classifications, and regulations for and connection with [common carrier] service shall just and reasonable. U.S.C. 201(b). the Order, the Commission found that blocking certain traffic Comcasts Internet service, the company had effectively shifted the burden that traffic other service providers, some which were operating their Internet access services common carrier basis subject Title II. Order, F.C.C.R. 13,03738, 17. marginally increasing the variable costs those providers, the Commission maintained, Comcasts blocking peer-topeer transmissions affected common carrier rates. Id. Whatever the merits this position, the Commission has forfeited failing advance here. See United States rel. Totten Bombardier Corp., 380 F.3d 488, 497 (D.C. Cir. 2004) (Ordinarily, arguments that parties not make appeal are deemed have been waived.). Instead, the Commission now argues that voice over Internet Protocol (VoIP) servicesin essence, telephone services using Internet technologyaffect the prices and practices traditional telephony common carriers subject section 201 regulation. According the Commission, some VoIP services were disrupted Comcasts network management practices. have need examine this claim, however, for the Commission must defend its action the same grounds advanced the Order. SEC Chenery Corp., 318 U.S. 80, 8788 (1943). The same problem undercuts the Commissions effort link its regulation Comcasts network management practices its Title III authority over broadcasting. The Commission contends that Internet video has the potential affect the broadcast industry influencing local origination programming, diversity viewpoints, and the desirability providing service certain markets. Respts Br. 43. But the Commission cites source for this argument the Order, nor can find one. Finally, the Commission argues that the Order ancillary its section 623 authority over cable rates. U.S.C. 543. Although the Order never mentions section 623, and although, far can tell, commenter suggested section 623 basis for the Commissions exercise ancillary authority, the Commission argues that its reliance this provision implicit its section finding. That finding included the following explanation: [E]xercising jurisdiction over the complaint would promote [section 1s] goal achieving reasonable charges. For example, cable companies such Comcast are barred from inhibiting consumer access high-definition on-line video content, then, discussed above, consumers with cable modem service will have available source video programming (much free) that could rapidly become alternative cable television. The competition provided this alternative should result downward pressure cable television prices, which have increased rapidly recent years. Order, F.C.C.R. 13,037, 16. Laying the foundation for this theory earlier the Order, the Commission found that video distribution poses particular competitive threat Comcasts video-on-demand (VOD) service. VOD operates much like online video, where Internet users can select and download stream any available program without schedule and watch any time . Id. 13,030, (internal quotation marks and alteration omitted). The Commissions argument that should read its invocation section reference its section 623 authority over cable rates fails because, unlike its Title authority over common carrier rates, its section 623 authority sharply limited. Indeed, section 623 expressly prohibits the Commission from regulating rates for video programming offered per program basis, i.e., video-on-demand service. U.S.C. 543(l)(2), (a)(1). Although the Commission once enjoyed broader authority over cable rates, see id. 543(c)(4), its current authority limited setting standards for and overseeing local regulation rates for basic tier service certain cable systems. See id. 543(b). the Order, the Commission does not assert ancillary authority based this narrow grant regulatory power. Instead, the Order rests the premise that section gives the Commission ancillary authority ensure reasonable rates for all communication services, including those, like video-ondemand, over which has express regulatory authority. explained above, Southwestern Cable, Midwest Video Midwest Video II, and NARUC bar this expansive theory ancillary authority. true that Congress gave the [Commission] broad and adaptable jurisdiction that can keep pace with rapidly evolving communications technologies. Respts Br. 19. also true that [t]he Internet such technology, id., indeed, arguably the most important innovation communications generation, id. 30. Yet notwithstanding the difficult regulatory problem rapid technological change posed the communications industry, the allowance wide latitude the exercise delegated powers not the equivalent untrammeled freedom regulate activities over which the statute fails confer Commission authority. NARUC II, 533 F.2d 618 (internal quotation marks and footnote omitted). Because the Commission has failed tie its assertion ancillary authority over Comcasts Internet service any statutorily mandated responsibility, Am. Library, 406 F.3d 692, grant the petition for review and vacate the Order. ordered.