FCC Faces Hostile Questioning During CALEA Oral Arguments

The FCC could lose big when the Court of Appeals, D.C., hands down a ruling later this year in a court case filed by the American Council on Education, CompTel and various Internet and education groups, to judge from oral arguments heard Fri. They're challenging how the FCC has applied CALEA to VoIP and other Internet communications.

Judges Harry Edwards and David Sentelle hit FCC attorney Jacob Lewis with repeated questions challenging the agency’s assertion that these IP communications are unregulated information services under the Telecom Act but telecom services under CALEA. Sources said the FCC appears likely to lose outright on its decision that CALEA applies to packets of information flowing over the Internet -- such as e-mails, photos or other data. The court’s likely decision on VoIP, and whether that part of the order would be remanded, was less clear.

“Your argument makes no sense,” said Edwards, who has a reputation for being tough and sometimes sarcastic in his questions: “When you go back to the office, have a big laugh, Okay? This is ridiculous.” Edwards said FCC’s arguments are “gobbledygook in light of what you said on broadband” and “utter nonsense.” Edwards told Lewis: “A telephone isn’t an orange… Just because it’s in a new statute you can’t say it’s fruit.”

The oral arguments played out in a packed courtroom full of telecom attorneys anxiously watching the proceedings, including FCC Gen. Counsel Sam Feder. Former FCC legal advisor Matt Brill, who represented plaintiffs, faced less hostile questioning. Brill told the panel that on the issue of CALEA and VoIP the FCC needs at the very least to make a determination of how VoIP is classified. “Our point is only that FCC never engaged in the analysis,” he said.

On Aug, 5, 2005, the Commission took 2 actions some observers saw as essentially contradictory. The FCC found that since VoIP and other Internet communications can “essentially replace conventional telecommunications services” the new services should be subject to CALEA. But the very same day the FCC voted to reduce regulation of wireline Internet access service by reclassifying as an “information service” facilities sharing requirements for facilities-based wireline broadband Internet access service providers.

“I have been wondering about the FCC’s convoluted logic in applying telecom regulation to the Internet in order to impose social obligations on Internet communications providers, while simultaneously removing telecom regulations from wireline broadband Internet access providers in order to relieve them of their access obligations,” said Jonathan Askin, gen. counsel to Pulver.com, another party in the suit. “Any minor distinction in the definition of telecom services and information services between the Telecom Act and the CALEA statute cannot possibly justify the radically distinct regulatory approaches within the 2 orders.”

“Given the intense reaction of Judge Edwards I would not be surprised that, as least as it applies to broadband services, the order will be vacated and possibly remanded as it relates to VoIP,” said an attorney who works on VoIP issues: “It was overwhelmingly one sided.”

The FCC told the court in a pleading it was logical to hold that IP services are information services under the Telecom Act but not under CALEA since they are very different statutes. “Terms used in different statutes with different purposes need not be construed identically,” the Commission said: “CALEA’s definition of ’telecommunications carrier’ is ‘more inclusive’ than the Communications Act’s and includes a unique provision that allows the statute to respond to changed circumstances.”