Wednesday, April 07, 2010

FCC Cannot Enforce Net Neutrality

In Comcast v. FCC, the U.S. Court of Appeals for the D.C. Circuit ruled unanimously that the FCC lacks the authority to block internet providers from controlling content. Here is the full text of the case, docket number 08-1291. The Boston Globe's Hiawatha Bray has an article in today's issue. I always take Bray's analysis seriously:

The court ruled 3 to 0 that the Federal Communications Commission exceeded its authority in 2008 when it ordered cable giant Comcast Corp. to lift limits on some kinds of Internet traffic. The decision was a setback for advocates of “Net neutrality,’’ the idea that Internet providers should be required to treat all data alike. And it could mean that the FCC lacks the authority to implement its recently released plan to deliver broadband Internet service to every American.

Democratic US Representative Ed Markey of Malden, a Net neutrality advocate, blamed the ruling on the Bush administration. “Today the court threw out the previous Commission’s shoddy legal theories,’’ Markey wrote in a statement. “In light of the court’s ruling, I encourage the current Commission to take any actions necessary to ensure that consumers and competition are protected on the Internet.’’

It’s unlikely that the ruling will have any immediate impact on consumers. Comcast said yesterday that it will not resume the controversial limits on Internet traffic that spawned the legal dispute. But some Internet activists fear that Comcast and other broadband companies could delay or block data transmitted by business rivals, or data streams containing controversial political ideas.

Gigi Sohn, president and cofounder of Public Knowledge, a Washington lobbying group that favors Net neutrality regulations, said the court ruling “essentially takes away the FCC’s ability to protect consumers.’’

But Scott Cleland, chairman of, a trade group financed by broadband Internet providers, said the ruling allows providers to manage their networks without undue government interference. “Comcast was simply trying to ensure quality of service to its customers when confronted with the problem of bandwidth hogs,’’ Cleland said.

In 2007, Comcast began restricting the use of a file-sharing technology called BitTorrent, saying users of the service transmitted so much data — including music and video files — that they were slowing down the entire network. Users said Comcast had no right to single them out for discriminatory treatment, noting that other heavy Internet uses were not restricted.

The FCC agreed, issuing a cease-and-desist order compelling Comcast to halt its restrictions. The company complied, but appealed the decision to the US Court of Appeals for the District of Columbia, arguing that there was no federal statute giving the FCC authority over the company’s Internet service. Yesterday, a three-judge panel of the appeals court unanimously agreed.

“We are gratified by the Court’s decision today to vacate the previous FCC order,’’ Comcast spokeswoman Sena Fitzmaurice said in a written statement. “Our primary goal was always to clear our name and reputation.’’

Even those who want tougher regulation of broadband Internet services agreed that the FCC was on shaky legal ground. In 2002, the agency decided that Internet services would no longer be treated like the highly regulated telephone industry. “The FCC was saying we don’t want to regulate broadband Internet access,’’ said Sohn.

So in the Comcast case, the FCC couldn’t rely on the laws that gave the agency specific authority to regulate phone companies. Instead, the agency argued that it had “ancillary authority’’ derived from general policy statements included in the 1934 Communications Act. But the court held that those policy statements were not sufficient to give the FCC authority over Internet providers.

The FCC could reverse the 2002 policy decision and declare that Internet services will be regulated like telephone companies. James DeLong, visiting fellow at Digital Society, a free market-oriented think tank, said such a move “would set off a long, long legal donnybrook, though . . . I think the agency would ultimately win.’’

Also, Congress could pass a law to expand the FCC’s powers, such as the Internet Freedom Preservation Act, cosponsored by Markey, but languishing since July in the House Committee on Energy and Commerce.

Meanwhile, the court ruling could mean trouble for the FCC’s national broadband plan, which was released last month. Sohn said that due to the court ruling, the FCC has no authority to implement key portions of the plan, like the use of $15.5 billion from the telephone universal service fund to build new broadband services. “Anything that requires the FCC to regulate broadband Internet access is at risk,’’ Sohn said.
The Net Neutrality fight is intense and highly politicized, since there are huge amounts of money at stake. The Internet providers want very much to be able to control without regulatory interference which data they give preference to speeding over their information highway segments. And knowledgeable consumers resent bitterly that those internet providers are suddenly banning or putting the brakes on their data -- usually video material, but it can include music packets as well. They argue that the control may one day easily extend to blocking or slowing packets from rival providers. Here is a fairly even-handed lay-out of the debate. And the link here takes the reader to PC World's Tony Bradley, in a Sept. 22, 2009 editorial about the issue, which gives you a flavor for just how bare knuckle the battle has been, and how much it is about power and control of valuable assets, no matter how the speakers might dress it up in philosophical rhetoric. It also makes clear the back story to yesterday's decision, which was exactly between Comcast and the FCC, and those are the characters in the editorial.

Here is the brief filed by Comcast in Comcast v. FCC

Here is the Respondent's (FCC's) Brief from Comcast v. FCC.

Amicus brief in support of Respondent FCC.

Comcast Intervenors Brief (amicus)

An excellent blog entry at Obsidian Wings about the case by a segment of the amici law professors, with links to other blog entries on the topic.

The decoration is a Georgian era print of bare knuckle boxers from England... courtesy of in case you want to buy a copy.

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