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You are hereFCC Reclassification is Eminent Domain, but with No Just Compensation or Authority
Submitted by Scott Cleland on Mon, 2010-02-01 09:56
At core the FCC's contemplation of reclassifying, or effectively treating, unregulated broadband info services as regulated telecom services, would be tantamount to the FCC declaring "eminent domain" over private broadband providers, i.e. justifying a government takings of private property for public uses, but doing so "without just compensation" or any statutory authority.
A gaping missing element in all the FCC's discussions of all the new "public uses" it envisions for broadband in its pending National Broadband Plan and its proposed preemptive Open Internet regulations is any consideration at all of the potential hundreds of billions of dollars of un-budgeted liability to the U.S. Treasury that could result from the takings of private network property without just compensation -- at a time of skyrocketing trillion dollar Federal budget deficits and rapidly mounting public debt.
A supremely grand and untested assumption here is that the FCC can do whatever it did in a pre-1996 monopoly regulatory environment (which guaranteed monopolies a rate of return to address takings concerns), in a competitive broadband environment where carriers operate at market risk of bankruptcy without any guarantee of a rate of return.
1. Why would the FCC''s contemplated regulations/plan implicate "Eminent Domain?" Public use: The FCC's National Broadband Plan reportedly will propose ~40 FCC rulemakings and many changes to existing law to advance a wide variety of stated "public uses" for broadband: telemedicine and e-health records to improve health care and lower costs; smart grid to lower energy usage; e-learning to improve education and lower costs; improve public transparency and democratic processes; among many other "public uses" for broadband.
Condemnation via Eminent Domain: Many of the regulatory powers envisioned by some at the FCC in the National Broadband Plan and the proposed Open Internet regulations effectively involve the FCC taking de facto control over parts of private networks in a form of a permanent regulatory "easement" on broadband network providers' network property for a public use that deprives the owners from much of the benefit of their property.
2. The FCC does not have Eminent Domain authority.
3. What would be just compensation? Just compensation for the takings envisioned by some at the FCC could involve hundreds of billions of dollars over time.
In sum, the FCC is clearly envisioning justifying new Open Internet regulations and the ~40 rulemakings in the National Broadband Plan by declaring that they advance multiple important "public uses."
Moreover, the FCC does not have the constitutional or statutory authority to compel competitive private network providers -- that are not monopolies -- to essentially cede their property to the U.S. Government without just compensation from the U.S. Treasury. Given that the Adminstration just submitted a $3.8 trillion 2011 Federal Budget to Congress that includes no estimates for the unfunded liability of the FCC's National Broadband Plan or the FCC's proposed preemptive Open Internet regulations, the House and Senate Budget Committees should insist that the Office of Management and Budget (OMB), the Congressional Budget Office (CBO), and the General Accounting Office (GAO) should study and estimate the potential long-term cost liability to the U.S. taxpayer of just compensation to private broadband providers if the FCC implements rules or proposes laws that effectively take private broadband property for public uses. Simply, the FCC does not have a "blank check" from the U.S. taxpayer to do whatever it wants.
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