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FCC and Consumers Dealt Major Blow by Appeals Court

by Terrence O'Brien on April 6, 2010 at 05:40 PM

The National Broadband Plan, Net neutrality and consumer advocates around the country took a major blow today when a federal appeals court ruled that the FCC had no authority to regulate how service providers manage network traffic. The ruling was handed down in favor of Comcast following a 2008 challenge leveled by the FCC against the cable provider for blocking and throttling P2P file-sharing traffic.

The Federal Court of Appeals in Washington, D.C. unanimously decided that the FCC had overstepped its bounds when it interpreted a loose collection of federal laws, policy statements and court decisions as giving it the authority to tightly regulate the service providers. The ruling declared that the FCC can only exercise its limited authority "if it demonstrates that its action... is 'reasonably ancillary to the... effective performance of its statutorily mandated responsibilities.'" The roadblock thrown up by the court rests on two major oversights by the FCC: one, that policy statements by members of Congress or the executive branch do not constitute the "statutorily mandated responsibilities" claimed; and two, that broadband service is classified as a Title I service (or information service), which grants the FCC very limited and vague powers.

There is a battle looming, though, as the FCC and Congress will likely move to reclassify broadband as a Title II service, which would grant the FCC the same regulatory power it currently has over telephone service -- a move that is essential to pushing forward with the National Broadband Plan. AT&T, Verizon, Time Warner and Comcast will, of course, fight that proposal tooth and nail, but they will have trouble building support as the effort to establish Net neutrality enjoys support from both sides of the aisle. In fact, the FCC's challenge to Comcast was initiated during the Bush years and was galvanized by his administration's policies (so Obama-hating commenters might want to hold off on the shouting war).

The decision from the court could also spell trouble for Comcast and its quest to purchase a controlling portion of NBC Universal. As the New York Times points out, Congress has already expressed concern that the provider could potentially give priority to its own content. This opens the door for the company to block or restrict content from competitors, which could give many on the panel serious pause.

While we usually avoid taking firm political stances, we are too reliant on the Web for our lives and work to remain on the sidelines. All of us here are staunchly in favor of enshrining Net neutrality as law. The ability of a service provider to fast track its own content while putting that of competitors or small Internet start-ups in the slow lane would be a disaster and restrict both consumer freedom and innovation. While the telecommunications industry and some staunch Ayn Rand types may declare Net neutrality to be a violation of free market values, the exact opposite is true. An open web is essential to a free digital market, and anyone who argues otherwise doesn't understand technology. [From: Hillicon Alley and the New York Times]

Tags: broadband, comcast, congress, fcc, government, internet, law, media, nationalbroadbandplan, netneutrality, top

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