FCC loses ruling on ‘net neutrality’

Comcast claims victory in org challenge

A federal appeals court has put in doubt the FCC’s ability to pass new rules and ambitious new plans for the Internet, handing a victory to Comcast Corp. as it challenged the commission’s crackdown on the way it delivered online service to customers.

The U.S. Court of Appeals for the D.C. Circuit, in a unanimous ruling written by Circuit Judge David S. Tatel, said that the commission “failed to tie its assertion of ancillary authority over Comcast’s Internet service to any ‘statutorily mandated responsibility.'”

The case stemmed from an instance in 2007 when Comcast subscribers to its high-speed Internet service discovered that the company was interfering with their use of peer-to-peer networking applications, including one user who was attempting to send a file of a recording of a barbershop quartet.

In ordering Comcast to halt the practice, the FCC was acting on policies restricting Internet providers ability to discriminate against certain types of traffic, giving preferential treatment to one Website or service over another. But the policies were just that: policies, and Comcast challenged their authority. Since then, the FCC has been working to give those policies the force of law, via what is commonly called “net neutrality” regulation.

The commission also has embarked on a National Broadband Plan, an effort to greatly increase consumers’ access to affordable high speed Internet service, and the court ruling could stymie the commission’s ability to implement the proposal.

And it also raises the possibility of limiting what conditions that the FCC could place on the proposed union of Comcast with NBC Universal, which is currently pending before its regulators and the Department of Justice. Opponents of the pact have cited fears that the deal would give Comcast, the nation’s largest provider of Internet service, the ability to control the dissemination of online video content.

It is unclear whether the FCC will appeal or what measure it will take to assert its authority. FCC spokeswoman Jen Howard said, “The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans. It 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.”

She added that the Court “in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door on other methods for achieving this important end.”

Sen. John Kerry, chairman of the Commerce Subcommittee on Communications, Technology and the Internet, called the ruling a “history-making decision” and said that there may be the need for a “new legal and regulatory framework for broadband.”

The question is how such an effort would get through Congress.

“I am not advocating that the FCC reclassify broadband services as a result of this decision, but I absolutely believe they maintain that legal authority and it would be entirely consistent with the history of communications law in our country if they did,” he said in a statement. “In fact, in cases involving FCC classification of services, the Supreme Court has always deferred to the agency. It is likely to continue doing so if the agency reversed and provided a strong rationale for updating the Bush era classification of broadband service.”

Sena Fitzmaurice, vice president of government communications for Comcast, said that they were “gratified” by the court’s decision. The company has insisted all along that there was nothing nefarious about the way it managed its network.

“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 customers 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.”

White House spokesman Robert Gibbs, in the daily briefing to reporters, said that the administration continues to support net neutrality and is “committed to providing businesses with the certainty that they need, as well.”

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