Virtually Taking the Fifth: Are Neutrality Regs Unconstitutional?

August 4, 2010

By James Gattuso
Tech Liberation Front

Could net neutrality rules be unconstitutional?  Maybe so, says Daniel Lyons of Boston College Law School.  In a piece released last week by the Free State Foundation (based on a more extensive research paper for Boston College last March) he argues that rules of the sort being considered by the FCC may constitute a taking of property under the Fifth Amendment. 

The idea that a regulation could be considered a “taking” is certainly nothing new.   For decades, courts have recognized the concept of “regulatory takings,” rules so restrictive that they constitute a seizure of property under the Fifth Amendment.  But Lyons doesn’t just argue that “net neutrality” is a regulatory seizure in some abstract sense. He argues that neutrality rules would constitute a very real  seizure of tangible, albeit invisible, property.

 Specifically, he says the rules would allow content providers to “physically invade [ISP networks] “with their electronic signals and to permanently occupy space on those networks, all without having to pay the network owner for access.”   This, he concludes is tantamount to a forced easement to content providers.   As he puts it:

“[T]he transmission of content over broadband networks is not some metaphysical act. It takes place in a real physical space: the fiber-optic and copper wires, and associated electronics, that comprise the broadband network… While the electrons are invisible to the naked eye and travel very quickly within a sheathed wire, the physical act of transmission is nothing more than a microscopic version of vehicles traveling along a highway—or pedestrians traversing an easement. In other words, the mandatory transmissions do physically occupy the service providers’ property.”

The argument has generated quite a bit of debate, including a harsh rebuttal by Mike Masick over at Techdirt.   Calling it “ridiculously tortured,” he dismissed Lyon’s argument, relegating it to his “oh please,” department.

There is no physical invasion, Masick maintains.  Instead, he argues, ISPs voluntarily connect to the Internet, which allows their customers to request content which travels through the ISPs network.  “That’s how the open internet works. If the ISPs don’t like it, they shouldn’t have offered an internet service” he concludes.

But this reasoning is just a little bit circular.   Who decided that’s how the open Internet works?  Masick seems to assume that open Internet rules as a given, when that is in fact the issue.   And the fact that content is requested by users, rather than arriving from content providers unbidden, doesn’t necessarily change the situation.   Government regulations granting subscribers the right to decide what content travels over an ISP’s network is conceptually little different,  in Fifth Amendment terms, than giving access rights to content providers directly.

At any rate, none of these technical details seem to matter, since Masick also makes a sweeping – and rather startling – claim that ISP networks are not privately owned anyway.

“The key problem is defining the internet as a private broadband network,” he says, “when in nearly every case, the broadband infrastructure involved includes tremendous use of government granted rights of ways and other government subsidies.  If the telcos actually had built their network entirely on their own and negotiated privately with land owners for rights of way, they might have a point on this one. But they didn’t and they don’t’.

Putting aside the fact that not all ISPs received subsidies (or are “telcos”), the logical consequences of this line of reasoning are staggering.  If you got a subsidy or some other government benefits, the government now owns your network.  This will certainly come as a surprise to ISPs, and ISP shareholders, who thought they actually owned their networks.    But why stop there?  What of the millions of American’s with mortgages financed by Fannie Mae?   Or cars that they drive on government-owned roads? 

This is exactly the sort of thing the Fifth Amendment was intended to prevent.  Property is not something to be shifted, transferred or parsed based on the whim of policymakers (or bloggers).   You can’t just assume away property rights, just because they conflict with your notions of how things should be – or should have been – done.

In the end, I don’t know whether Lyon’s arguments will stand up to judicial scrutiny.   Courts have been reluctant to find regulatory takings without a clear taking of tangible property being involved.   And,  whatever the merits of the argument,  it’s hard to see a judge wading into electrical engineering arguments about the path of electrons.   But the argument is a serious one that should not be dismissed out of hand.

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