Where is FCC Authority to Regulate in Apple-Google Spat? What are the Costs?

by on August 3, 2009 · 29 comments

Over at Twitter, our TLF blogging colleague Jerry Brito asks a smart question about the Federal Communications Commission’s recently-opened investigation of the Apple-Google spat over Apple’s recent decision to reject the Google Voice app from the iPhone App Store.  Jerry asks: “Maybe I should know this, but what authority does the FCC have to demand that Apple explain anything?”  Good question, Jerry!  But no, I don’t think there’s anything you’re missing.  We might consider this merely the latest chapter of the agency’s rogue operator history: If you can’t find the authority to do something, just assert it anyway and go for broke!  The idea of living within the confines of the law and paying attention to statutory authority seems like an alien concept to the FCC.  As my PFF colleagues Barbara Esbin and Adam Marcus have pointed out in their amazing recent law review article, “The Law Is Whatever the Nobles Do: Undue Process at the FCC,” when all else fails, the agency just asserts “ancillary jurisdiction” and claims that the whole world is their oyster. They argue:

The FCC’s means of asserting regulatory authority over broadband Internet service providers’ (“ISP”) network management practices is unprecedented, sweeping in its breadth, and seemingly unbounded by conventional rules of interpretation and procedure. We should all be concerned, for apparently what we have on our hands is a runaway agency, unconstrained in its vision of its powers.

Of course, even if we ignore the agency’s cavalier attitude about the law and statutory authority, there are other reasons to be concerned about FCC interference in this matter. Berin and Ryan have already pointed out the other side of the story: That this is just old-fashion cut-throat competition, and that consumers continue to enjoy rapidly expanding options in this marketplace. [Also see this paper that Barbara Esbin and Berin co-authored: Should the FCC Kill The Goose That Laid The Golden iPhone.] And even some of those folks in the press or the blogosphere who welcome some FCC oversight in this case recognize the horrific potential downside here.  As Larry Dignan, Editor in Chief of ZDNet, argues in his piece today, “FCC’s More Proactive Stance: Should We Cheer or Worry?”:

But then there’s the other side of the equation. The one that can make you squirm. The FCC is looking into everything from app approval to exclusive deals between carriers and device makers. At some point, the FCC meddles in free markets. It will micromanage. For now, the FCC’s moves require a wait-and-see approach, but it’s clear there’s a new sheriff in town and he isn’t going to be shy about probing all aspects of the wireless business. Stay tuned to see how this turns out.

Uh, yeah. And that’s what has some of us so worried. When the FCC “meddles” and “micromanages” the results are usually less than stellar.  Once the FCC starts regulating every aspect of our smartphones, chances are they won’t be so smart any more.  In just one year’s time, the Apple iPhone Store has facilitated 1.5 Billion downloads of over 65,000 free and paid apps by consumers in 77 countries. Does anyone think the FCC is going to do better than that once they start micro-managing the process?

  • http://www.cs.princeton.edu/~tblee Tim Lee

    Well said!

  • Brett Glass

    It does not seem to me that the FCC’s enabling legislation allows it to regulate computing platforms, but if it were determined that it did, it would be particularly scary because of where it could lead.

    Think about it. The manufacturers of computer gaming consoles (all of which now telecommunicate, as the iPhone does) have, to date, been able to control which software products were available for their platforms, and have used this control to reduce the initial cost of the console and make up the money via the revenue stream from the software. They've also used this control to protect their brands and to avoid malware. If the FCC could regulate which apps Apple allows onto the iPhone, it could also regulate which games (especially networked games) console makers allowed onto their platforms and could scuttle this business model, which consumers seem to like.

    Come to think of it, all computers nowadays come equipped to telecommunicate, too (via Ethernet and usually Wi-Fi). So, once the camel’s nose was in the tent, these platforms would be subject to regulation as well. Operating system manufacturers and computer manufacturers would have to manage their platforms as the FCC saw fit.

    Do we want to open this can of worms merely because a few iPhone users — who bought the product with full knowledge that it was a closed platform — are now experiencing buyer’s remorse? Should we let monopolist Google (which seems to be pulling the strings here) control the FCC like a puppet? Do we want the government regulating what software we can run, and where? What will come next: censorship of video games that the FCC finds indecent?

  • http://www.facebook.com/RichardBennett.Cal Richard Bennett

    I'm bummed. I installed the Google Voice app on my AT&T Blackberry today, and although it runs fine on the The Man's Telephone, I can't do anything with it because it's an invitation-only service and Google won't give me an invitation. I requested one several hours ago, but I'm still stuck.

    I demand the FCC investigate Google's discriminatory failure to give me a Google Voice invitation. In return, I can promise to answer some of their questions for them. Given that AT&T is happy for me to run the Google Voice app on my Blackberry, it's clear that AT&T isn't the culprit in the Apple/Google tussle. Hence, they can take that off the table completely and focus the inquiry on the two vital questions:

    1. Why won't Google give me an invitation? and:
    2. Why is this any of the FCC's business?

    Clearly, the future of our democracy hangs in the balance.

  • mwendy

    Agreed on this.

  • http://www.eff.org/ Fred von Lohmann

    While I certainly share your concerns regarding the FCC's penchant for ever-expanding jurisdiction, as well as skepticism about some of its past regulatory efforts, I can't see what's wrong with having it simply ask Apple and AT&T for answers here.

    I also can imagine some regulatory efforts that might have salutary effects (like the Carterfone ruling did). For example, the FCC could support EFF's proposed DMCA exemption for jailbreaking, thereby enabling a free market for independent iPhone software development. And the FCC and/or FTC could look into regulations to bar contractual terms that block consumers from jailbreaking their phones to run software of their own choosing. Neither of those would constitute “micro-managing” the iPhone/AT&T.

    Fred von Lohmann, EFF

  • http://jerrybrito.com Jerry Brito

    Fred, I agree that there's nothing wrong is asking for answers, but what happens if Apple refuses to answer? Implicit in the FCC's letter (PDF) is that it's not simply asking; it's demanding answers. And that's where the question of jurisdiction comes in. We're right to be concerned over the FCC's penchant for ever-expanding jurisdiction, and we can't let them get away with one more inch just because we'd all like to know (I sure would) how Apple made it's app rejection decisions.

    On another note, while I'm all for a DMCA exemption for jailbreaking, barring contractual terms is a whole other thing. One carries criminal penalties, the other is voluntary and at worst can result in a cancelled service or a voided warranty. It's only reasonable that Apple and AT&T should be able to contract with their customers about what they will support as part of service.

  • http://jerrybrito.com Jerry Brito

    Fred, I agree that there's nothing wrong is asking for answers, but what happens if Apple refuses to answer? Implicit in the FCC's letter (PDF) is that it's not simply asking; it's demanding answers. And that's where the question of jurisdiction comes in. We're right to be concerned over the FCC's penchant for ever-expanding jurisdiction, and we can't let them get away with one more inch just because we'd all like to know (I sure would) how Apple made it's app rejection decisions.

    On another note, while I'm all for a DMCA exemption for jailbreaking, barring contractual terms is a whole other thing. One carries criminal penalties, the other is voluntary and at worst can result in a cancelled service or a voided warranty. It's only reasonable that Apple and AT&T should be able to contract with their customers about what they will support as part of service.

  • http://jerrybrito.com Jerry Brito

    Fred, I agree that there's nothing wrong is asking for answers, but what happens if Apple refuses to answer? Implicit in the FCC's letter (PDF) is that it's not simply asking; it's demanding answers. And that's where the question of jurisdiction comes in. We're right to be concerned over the FCC's penchant for ever-expanding jurisdiction, and we can't let them get away with one more inch just because we'd all like to know (I sure would) how Apple made it's app rejection decisions.

    On another note, while I'm all for a DMCA exemption for jailbreaking, barring contractual terms is a whole other thing. One carries criminal penalties, the other is voluntary and at worst can result in a cancelled service or a voided warranty. It's only reasonable that Apple and AT&T should be able to contract with their customers about what they will support as part of service.

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