American Council on Education v. Federal Communications CommissionAmerican Council on Education v. Federal Communications Commission
Lead
In 2004, several law-enforcement agencies petitioned the Federal Communications Commission (“FCC” or “the Commission”) to clarify the scope of the Communications Assistance for Law Enforcement Act,
I
Before the dawn of the digital era, there were few technological obstacles to the government’s wiretapping capabilities: Eavesdropping on a phone call was as easy as finding the copper wires that ran into every caller’s home. With the advent of the digital age, however, the architecture of the world’s communications networks changed drastically. In the place of physical copper wires that connected individual
Responding to these changing technologies, in 1994 Congress passed CALEA, which requires “telecommunications carriers” to “ensure” that their networks are technologically “capable” of being accessed by authorized law enforcement officials.
A
CALEA applies only to “telecommunications carriers.” See
a person or entity engaged in providing wire or electronic communication switching or transmission service to the extent that [2] the Commission finds that such service is a replacement for a substantial portion of the local telephone exchange service and that [3] it is in the public interest to deem such a person or entity to be a telecommunications carrier for purposes of this sub-chapter ....
Id. § 1001(8)(B)(ii) (emphasis added). Section 1001(8)(B)(ii) — which is commonly referenced as CALEA’s “Substantial Replacement Provision” or “SRP” — allows the Commission to expand the definition of a “telecommunications carrier” to include new technologies that substantially replace the functions of an old-fashioned telephone network.
CALEA does not аpply to “persons or entities insofar as they are engaged in providing information services.” Id. § 1001(8)(C)(i) (the “information-services exclusion”). The Act defines an “information service” as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications.” Id. § 1001(6)(A). Because information-service providers are not subject to CALEA, they need not make their networks accessible to law-enforcement agencies. See
B
In 2004, the United States Department of Justice, the Federal Bureau of Investigation, and the United States Drug Enforcement Administration (collectively, “the DOJ”) filed a joint petition for expedited
After receiving thousands of pages of comments from more than 40 interested parties, the Commission ruled that broadband and VoIP providers are covered (at least in part) by CALEA’s definition of “telecommunications carriers.” See Communications Assistance for Law Enforcement and Broadband, Access and Services, 20 F.C.C.R. 14989, ¶8 (2005) (“Order”). To avoid an “irreconcilable tension” between CALEA’s SRP and the information-services exclusion, the Commission concluded that the Act creates three categories of communications services: pure telecommunications (which plainly fall within CALEA), pure information (which plainly fall outside CALEA), and hybrid telecommunications-information services (which are only partially governed by CALEA). Id. ¶ 18.
The FCC then concluded that broadband and VoIP are hybrid services that contain both “telecommunications” and “information” components.
Notwithstanding CALEA’s breadth, the Commission clarified that the Act does not apply to “private networks.” See id. ¶ 36 n. 100 (citing
To the extent [the petitioners] are engaged in the provision of facilities-based private broadband networks or intranets that enable members to communicate with one another and/or retrieve informationfrom shared data libraries not available to the general public, these networks appeаr to be private networks for purposes of CALEA.... We therefore make clear that providers of these networks are not included as “telecommunications carriers” under the SRP with respect to these networks. To the extent, however, that these private networks are interconnected with a public network, either the [public voice network] or the Internet, providers of the facilities that support the connection of the private network to a public network are subject to CALEA under the SRP.
Id. Thus, private networks — like broadband and VoIP — are excluded from CA-LEA insofar as they meet one of the statute’s exclusions. See
The Commission recognized that it had separately adopted a different interpretation of a similar term (“telecommunications service ”) under a different statute. Interpreting the Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56,
In the context of the 1996 Act, the Commission concluded that hybrid services fall entirely outside the statute’s scope. Because the 1996 Act defines both “telecommunications service” and “information service” in terms of an “offering” to consumers, see Broadband Declarator Ruling, 17 F.C.C.R. at 4820, ¶ 34, and because consumers perceive broadband Internet access to be a single “offer” for an integrated “information service,” id. at 4821-24, ¶¶ 35^41, the FCC concluded that cable-modem service is exclusively an “information service,” which is unregulable under the 1996 Act, id,, at 4832, ¶ 59. The Commission further emphasized that its interpretation of the Telecom Act is consistent with Congress’s deregulatory goals. See id. at 4802, ¶ 5; id. at 4823-24, ¶¶ 40-41; see also Verizon Commc’ns Inc. v. FCC,
However, the Telecom Act differs significantly from CALEA. Unlike CALEA, the 1996 Act does not contain an analogue to CALEA’s SRP: While an entity is covered by CALEA if it provides transmission, switching, or the functional equivalent thereof, an entity is covered by the Telecom Act only if it provides “transmission.” See
Drawing on the statutes’ different texts, structures, legislative histories, and purposes, the FCC decided to resolve the ambiguities in CALEA and the 1996 Act differently. In light of “Congress’s deliberate extension of CALEA’s [substantive] requirements to providers satisfying the SRP,” the FCC concluded that a telecommunications carrier should not escape the Act’s reach altogether simply because the carrier’s service offering has an “informational” component. Order, 20 F.C.C.R. 14989, f 18. Thus, the FCC concluded that CALEA’s definitional sections are not mutually exclusive: “[W]hen a single service comprises an information service component and a telecommunications component, Congress intended CALEA to apply to the telecommunications component.” Id. at ¶ 21. The Commission further emphasized that its interpretation of CALEA is consistent with the Act’s law-enforcement goals. Id.; cf. Verizon,
II
ACE raises three arguments in its petition for review. First, ACE argues that broadband Internet access is an integrated “information service” under CALEA, and as such, it is uniformly excluded from the Act’s substantive requirements. Second, ACE argues that VoIP similarly qualifies for CALEA’s information-services exclusion. Third, ACE argues that the Commission unlawfully applied the Act to “private networks.”
Our review is governed by the classic two-step approach set out in Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc.,
A
ACE first argues that broadband Internet access is an “information service,” which falls completely beyond CALEA’s reach. The Supreme Court has upheld the FCC’s classification of broadband as an integrated “informatiоn service” under the Telecom Act. See Brand X,
ACE’s syllogism falls apart because CA-LEA and the Telecom Act are different statutes, and Brand X was a different case. Although ACE would have us read Brand X was controlling this controversy, that case did not hold that broadband Internet access is exclusively an “information service,” devoid of any “telecommunications” component. Rather, it upheld the FCC’s reasonable interpretation to that effect under a different statute. See
So here. CALEA expressly provides that the Commission may extend the definition of a “telecommunications carrier ... to the extent that the Commission finds that [a] service is a replacement for a substantial portion of the local telephone service and that it is in the public interest to deem such a person or entity to be a telecommunications carrier .... ”
The Commission’s interpretation of CA-LEA represents a “reasonable policy choice.” CALEA — unlike the 1996 Act — is a law-enforcement statute. See
Specifically, CALEA differs from the 1996 Act in two important ways. First, CALEA’s definition of “telecommunications carrier” is broader than the definition used in the 1996 Act. To highlight the difference, we present the statutory texts synoptically.
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While the Telecom Act limits its definition of “telecommunications services” to “transmission,” CALEA’s text is more inclusive: CALEA defines a “telecommunications carrier” as a provider of “transmission or switching” plus any provider that substantially replaсes traditional transmission or switching. See
The second major difference between the two statutes is that CALEA’s text and structure suggest that its definitions for “telecommunications carrier” and “information services” are not mutually exclusive terms. Unlike the 1996 Act, CALEA does not refer to a “telecommunications service,” nor does its definition of “telecommunications carrier” include a reference to a service “offering.” Moreover, CALEA’s definition of a “telecommunications carrier”' — unlike the 1996 Act’s definition of that term — excludes entities only “insofar as they are engaged in providing information services.”
ACE’s аrgument to the contrary relies on the fact that “information services,” by statutory definition, are delivered “via telecommunications” under both CALEA and
ACE’s analysis is inconsistent with our standard of review. We cannot set aside the Commission’s reasonable interpretation of the Act in favor of an alternatively plausible (or an even better) one. See, e.g., Brand X,
We hasten to emphasize the continued vitality of CALEA’s information-services exclusion. As the Commission explained:
A facilities-based broadband Internet access service provider continues to have no CALEA obligations with respect to, for example, the storage functions of its e-mail service, its web-hosting and [“Domain Name System,” or “DNS”] lookup functions or any other [“Internet Service Provider,” or “ISP”] functionality of its Internet access service. It is only the “switching and transmission” component of its sеrvice that is subject to CALEA under our finding today.
Order, 20 F.C.C.R. 14989, ¶ 38 (emphasis in original and footnote omitted). Because CALEA’s definitions for “telecommunications” and “information service” are not mutually exclusive, the Commission reasonably concluded that mixed services— such as broadband Internet access — are partially covered by (and partially excluded from) the statute: The “switching and transmission” portion of a broadband service offering — which replaces the “switching or transmission” portion of a dial-up Internet connection — is covered, while any “capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications,”
The Commission has long distinguished between “information services” and the underlying “telecommunications” that transport thеm. See, e.g., Amendment of Section 61.702 of the Commission’s Rules & Regulations (Second Computer Inquiry),
B
ACE next argues that the Commission arbitrarily and capriciously “refused to classify VoIP as either a telecommunications service or an information service.” Pet. Br. at 33. At oral argument, ACE’s counsel clarified that it is not challenging the merits of VoIP’s classification in one category or the other; ACE argues only that the Commission must classify it. See Tr. of Oral Arg. at 13:14-19:03. We need not tarry long over this claim.
As we explained above, CALEA says nothing about “telecommunications servicefs].” To the extent ACE and its fellow petitioners confusedly petitioned the Commission tо (mis)classify VoIP in relation to a nonexistent statutory term, the FCC did not err by declining the invitation. Moreover, ACE ignores the fact that the Commission did classify VoIP providers as “telecommunications earners,” see Order, 20 F.C.C.R. 14989, ¶¶ 39-44, while specifically excluding the voice-transmission portions of VoIP from the definition of “information services,” see id. ¶ 45. Regardless of the merits of that classification — which ACE does not challenge — no one can deny that the Commission made it.
C
ACE’s third and final argument focuses on a single word in a single sentence in a single footnote from the Order. The Commission noted: “To the extent [that] private networks are interconnected with a public network, either the [public voice network] or the Internet, providers of the facilities that support the connection of the private network to a public network are subject to CALEA under the SRP.” Order, 20 F.C.C.R. 14989, ¶36 n. 100 (emphasis added). Relying on language from thе proposed rule, ACE insists that the inclusion of the word “support” in the FCC’s final rule “provides no real comfort” for its fears that the Commission will extend its regulatory authority “throughout [an] entire private network.” Pet. Br. at 46.
Although ACE’s argument suggests the point is not necessarily self-evident, it should go without saying that a proposed rule is not a final rule. It should be equally obvious that a challenge to the Commission’s possible future applications or extensions of CALEA does not ripen by
Ill
For the reasons set forth above, the petition for review is
Denied.
Notes
. Throughout this opinion we refer collectively to DSL and cable modems as "broadband Internet access services,” or simply "broadband.” We refer to interconnected VoIP services — which allow users to make phone calls over broadband connections — simply as "VoIP.” See generally In re IP-Enabled Services, 19 F.C.C.R. 4863 (2004) (providing background information on both broadband and VoIP).
. CALEA does not affect the scope of the government’s wiretapping powers. Those powers instead come from the Omnibus Crime Control and Safe Streets Act, Pub.L. No. 90-351, 82 Stat. 197 (1968) (codified as amended in scattered sections of 5, 18, and 42 U.S.C.), and the Foreign Intelligence Surveillance Act, Pub.L. No. 95-511, 92 Stat. 1783 (1978),
. Our dissenting colleague asserts that "[b]roadband Internet is an ‘information service' — indeed, the Commission does not dispute this.” Dissent at 236. However, in the Order die Commission determines that broadband Internet is not an “information sendee” for purposes of CALEA. See Order, 20 F.C.C.R. 14989, ¶¶ 37-38.
. ACE attempts to obscure the differences between CALEA and the 1996 Act by arguing that "when Congress uses the same language in two statutes having similar purposes, particularly when one is enacted shortly after the other, it is appropriate to presume that Congress intended that text to have the same meaning in both statutes.” Pet. Br. at 26 (quoting Smith v. City of Jackson,
. ACE attеmpts to cabin the expansive effect of the SRP by arguing that it applies only "to commercial providers of 'telecommunications’ that are not common carriers for hire.” Pet. Br. at 38 (emphasis added and removed). However, ACE's interpretation of the SRP would eviscerate the clause that immediately precedes it, which defines a telecommunications carrier as “a common carrier for hire.”
. Our dissenting colleague argues that ''[p]ri- or to the issuance of the instant Order, the Commission has consistently held that broadband Internet service is an 'information service.’ It has never previously said otherwise. Indeed, it has never hinted otherwise.” Dissent at 239. However, the Commission has consistently recognized that the telecommunications and information components of broadband are distinguishable. The fact that the Commission treated those components as an integrated service-offering under one statute does not preclude the Commission from reasonably treating those differentiable components differently under a different statute. Cf. Brand X,
Dissenting Opinion
dissenting.
Regardless of how serious the problem an administrative agency seeks to address ... it may not exercise its authority in a manner that is inconsistent with the administrative structure that Congress enacted into law.
FDA v. Brown & Williamson Tobacco Corp.,529 U.S. 120 , 125,120 S.Ct. 1291 ,146 L.Ed.2d 121 (2000).
The Communications Assistance for Law Enforcement Act (“CALEA”) sets forth “assistance capability requirements,” compelling “telecommunications carriers” to build and sustain their equipment in a manner that allows law enforcement agents to execute surveillance orders. Importantly, for purposes of this case, the statute
• explicitly states that “telecommunications carrier[s]” do not include “persons or entities insofar as they are engaged in providing information services,”47 U.S.C. § 1001(8)(C)(i) (2000),
• defines “information services” as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications,”id. § 1001(6)(A) , and
• expressly states that the assistance capability requirements “do not apply to [ ] information services,”id. § 1002(b)(2)(A) .
In determining that broadband Internet providers are subject to CALEA as “telecommunications carriers,” and not excluded pursuant to the “information services” exemption, the Commission apparently forgot to read the words of the statute. CALEA does not give the FCC unlimited authority to regulate every telecommunications service that might conceivably be used to assist law enforcement. Quite the contrary.
The FCC apрarently believes that law enforcement will be better served if broadband Internet providers are subject to CA-LEA’s assistance capability requirements. Although the agency may be correct, it is not congressionally authorized to implement
What we see in this case is an agency attempting to squeeze authority from a statute that does not give it. The FCC’s interpretation completely nullifies the information services exception and manufactures broad new powers out of thin ah*.
The most troubling aspect of the FCC’s interpretation of CALEA is that it is directly at odds with the statutory language. The statute defines “information services” as the offering of various information capabilities via telecommunications.
The net effect of the FCC’s interpretation is to vitiate the statutory exception altogether. If all information services that are carried out “via telecommunications” are subject to CALEA, then the “information services” exemption is an empty set. Under the plain terms of the statute, this cannot be.
In the face of this reality, the Commission offers an example of a service that, under its interpretation, allegedly falls within the information services exception — the “storage functions of [a broadband Internet access provider’s] e-mail service.” Order at ¶ 38. The example highlights the absurdity of the agency’s position. Once email storage functions are viewed apart from the telecommunications mechanism used to transmit email messages, there is no sense in which email services are offered “via telecommunications.” Thus defined, email storage services fall outside of the statutory exception and are thus potentially subject to CA-LEA’s requirements.
If the FCC had construed CALEA’s information services exception consistent with the pаrallel provision in the Communications Act — which is identical in all relevant respects, compare
VoIP is an example of such a service. There is no doubt that VoIP replaces a substantial portion of local telephone exchange service — it offers exactly the same functionality as phone service. And, in contrast to broadband service, the Commission has explicitly refrained from designating VoIP as an information service under the Communications Act, see Federal-State Joint Board on Universal Service, Report to Congress, 13 F.C.C.R. 11,501, 11,541 ¶ 83,
It seems thаt the Commission had little interest in reading CALEA in a manner that is consistent with the statute’s language and structure. The Commission’s argument is quite revealing. By emphasizing the need to construe CALEA to “ensur[e] that technological change [does] not erode lawful surveillance authority,” FCC’s Br. at 30, the Commission betrays its true objective: administrative amendment of the statute. Our standard for reviewing an agency’s interpretation of congressional commands does not permit us to ratify the FCC’s unauthorized attempt to legislate new and better tools for law enforcement.
As Chevron and its progeny teach, an “agency’s interpretation of the statute is not entitled to deference absent a delegation of authority from Congress to regulate in the areas at issue.” Motion Picture Ass’n of Am., Inc. v. FCC,
The Supreme Court reiterated this view in Brown & Williamson. There the Court rejected an attempt by the Food and Drug Administration to regulate tobacco products, noting that “Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion.”
Similar considerations militate against the proposition that, in enacting CALEA, Congress quietly granted the FCC the authority to subject a new industry — providers of broadband service — to the intrusive requirements of the statute. In gauging the plausibility of the FCC’s purported authority, one surely must look to the FCC’s treatment of the “information services” exception under the Communications Act. A term in one statute does not necessarily control the Commission’s actions under another statute. But here the Commission’s earlier rulings show that “information services” has become a term of art. The agency cannot simply ignore its prior consistent constructions of “information services,” especially when it offers no coherent alternative interpretation. Under
Prior to the issuance of the instant Order, the Commission has consistently held that broadband Internet service is an “information service.” It has never previously said otherwise. Indeed, it has never hinted otherwise. For example, in its Declaratory Ruling on the status of cable modem service under the Communications Act, the Commission held:
As currently provisioned, cable modem service is a single, integrated service that enables the subscriber to utilize Internet access service through a cable provider’s facilities and to realize the benefits of a comprehensive service offering.
... Consistent with the statutory definition of information service, cable modem service provides the capabilities described above “via telecommunications.” That telecоmmunications component is not, however, separable from the data-processing capabilities of the service. As provided to the end user the telecommunications is part and parcel of the cable modem service and is integral to its other capabilities.
Inquiry Concerning High-Speed Access to the Internet Over Cable and Other Facilities, Declaratory Ruling and Notice of Proposed Rulemaking,17 F.C.C.R. 4798, 4823 ¶¶ 38-39,
There is no doubt that an “initial agency interpretation is not instantly carved in stone”; nor is there any doubt that, if acting pursuant to delegated authority, an agency may adopt different interpretive positions to address different problems. See Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs.,
The question here is whether the FCC has identified a statutory predicate for enlarging CALEA’s scope to encompass providers of broadband access. It has not. Merely saying that broadband is not an information service does not make it so, certainly not in light of all that the FCC has said in the past. And merely invoking law enforcement, “as though it were a talisman under which any agency decision is by definition unimpeachable,” Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co.,
The FCC can no more contend that “information service” providers are really “telecommunications carriers” because their regulation can facilitate the law enforcement purposes of CALEA, than the
Appendix
The Applicable Provisions of the Communications Assistance for Law Enforcement Act,
* * * * * *
(6) The term “information services ”—
(A) means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications; and
(B) includes—
(i) a service that permits a customer to rеtrieve stored information from, or file information for storage in, information storage facilities;
(ii) electronic publishing; and
(iii) electronic messaging services; but
(C) does not include any capability for a telecommunications carrier’s internal management, control, or operation of its telecommunications network.
(8) The term “telecommunications carrier”—
* *
(C) does not include—
(i) persons or entities insofar as they are engaged in providing information services;
‡ # *1* H*
(a) Capability requirements
... a telecommunications carrier shall ensure that its equipment, facilities, or services that provide a customer or subscriber with the ability to originate, terminate, or direct communications are capable of [serving government needs in intercepting digital and other communications] ....
(b) Limitations
$ ‡ ‡ ‡
(2) Information services; private networks and interconnection services and facilities
The requirements of subsection (a) of this section do not apply to—
(A) information services;
* * * * * *