The ‘Net Neutrality’ Ball Lands in Congress’ Court

Federal appeals panel rules that the FCC lacks the authority to regulate the internet

Now that the Federal Communications Commission has been stripped of the power it presumed over the internet, it's up to Congress to enact laws to regulate the medium.

But considering what they're already up against on Capitol Hill, it looks like the World Wide Web could remain the Wild West for years to come.

An appellate court on Tuesday threw a wrench into the FCC's  hopes to expand broadband and bar internet service providers from favoring their own content at the expense of others — a concept known as “net neutrality." The three-judge panel of the U.S. Court of Appeals ruled that the FCC, which can regulate broadcast TV and telephone landlines, doesn’t have the authority to regulate the internet.

The ruling represents a victory for Comcast, whose case brought the issue to the fore. The FCC had sanctioned the cable provider for limiting its customers’ ability to download big BitTorrent video files — usually TV shows and movies.

The FCC acted after two consumer groups, Public Knowledge and Free Press, complained that Comcast was illegally blocking peer-to-peer file services at times of high internet traffic volume and effectively discriminating against those services without telling their customers — even as Comcast let other high volume web sites through.

The FCC in August 2008 ruled that Comcast “had unduly interfered with internet user’s right to access lawful internet content” and that its network management practices “are inconsistent with the concept of an open and accessible internet.” It ordered Comcast to remove the block and develop a network management plan that wasn’t discriminatory.

Comcast complied, but it also challenged the FCC in court, arguing both that the FCC hadn’t formally issued anti-discrimination rules it was trying to enforce; and that the FCC didn’t have the authority to regulate the internet to begin with.

The appeals panel agreed.

“It is true that ‘Congress gave the [FCC] broad and adaptable jurisdiction so that it can keep pace with rapidly evolving communication technologies.’ It is also true that ‘the internet is such a technology,’” wrote the panel, citing in part briefs filed by each site. “Yet technological change is not the equivalent of untrammeled freedom to regulate.”

Lawyers said Monday's ruling has far broader implications on what the FCC can do.

FCC chairman Julius Genachowski has been pushing for the commission to expand broadband and impose broader “net neutrality” limits. The court case could bar the FCC from doing either.

 “It has left the agency unable to protect consumers in the broadband marketplace,” said Derek Turner, research director for Free Press. “This is not a acceptable outcome for the American public.”

Andy Schwartzman, executive vice president of the Media Access Project, said the decision is such a narrow reading of the FCC’s authority “it represents a severe restriction on the FCC’s powers.”

The FCC said in a statement that it would continue to pursue policies to promote "an open internet." But it also conceded that it has its work cut out for it: "(The FCC) will rest these policies — all of which will be designed to foster innovation and investment while protecting and empowering consumers — on a solid legal foundation."

“Today’s court decision invalidated the prior Commission’s approach to preserving an open Internet. But the court in no way disagreed with the importance of preserving a free and open internet; nor did it close the door to other methods for achieving this important end.”

Sena Fitzmaurice, Comcast’s vice president of government communications, said the company was “gratified” by the decision.

“Our primary goal was always to clear our name and reputation," she said in a statement. "We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want. Comcast remains committed to the FCC’s existing open Internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant Internet.”

In Congress, the court’s decision immediately kicked off a new fight.

Republicans praised the ruling and said the FCC should stay out of regulating the internet.
“The internet has grown and flourished without federal regulations because it has been able to evolve to meet rapid changes without government roadblocks holding up progress,” said Sen. Kay Bailey Hutchison, R-Texas, the ranking Republican on the Senate Commerce Committee. She said it would be “wrong” for Genachowski to now pursue “excessive and burdensome regulation.”

Democrats suggested the decision should prompt the FCC to reexamine its decision under former chairman Kevin Martin that the internet is not a phone service.

“Without oversight, market giants would be free to do as they wish even if their actions hindered the free flow of information, treated consumers unfairly, or discriminated against content creator,” warned Sen. John Kerry, D-Mass., chairman of the Senate Commerce Committee’s telecommunications panel.

“The FCC can and must continue the role it has always played protecting consumers and encouraging the deployment of networks through the development of every communications technology, from the telephone to radio and television to wireless communications.”