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Apr. 7, 2010

A federal appeals court ruled today that the FCC doesn't have the legal authority to force Net Neutrality regulations on Internet service providers.

A three-judge panel in Washington unanimously tossed out the Federal Communications Commission's August 2008 cease and desist order against Comcast, which had taken measures to slow BitTorrent transfers and had voluntarily ended them earlier in February 2008.

Today's decision could really doom one of the original signature initiatives of FCC Chairman Julius Genachowski, a Democrat. In October 2009, Genachowski announced plans to begin drafting a formal set of Net neutrality rules--even though Congress hadn't given the agency the green light to begin.

Verizon Wireless CEO Ivan Seidenberg has said at that time the new regulations would act as a brake to innovative technologies like telemedicine and a few others.

Last year, advocacy groups had urged the FCC to take legal action against Comcast, but the agency's vote to proceed was a narrow 3-2, with the dissenting commissioners predicting at the time that it wouldn't hold up in court.

FCC Commissioner Robert McDowell said at the time that the FCC's ruling was unlawful and lacked any legal authority.

Furthermore, because the FCC has failed to tie its assertion of regulatory authority to any actual law enacted by Congress, the FCC doesn't have the authority to regulate an Internet provider's network management practices, wrote Judge David Tatel of the U.S. Court of Appeals for the Washington D.C. Circuit.

Senator Kay Hutchison, the Texas Republican who's the senior member on the Senate Commerce Committee, said: "It would be wrong to double down on excessive and burdensome regulations, and I hope the FCC chairman will now reconsider his decision to pursue expanded commission authority over Internet broadband services."

But House Representative Ed Markey, the Massachusetts Democrat who had drafted one of the unsuccessful Net Neutrality bills last year said: "I encourage the FCC to take any actions necessary to ensure that consumers and competition are protected on the Web."

Markey also noted that he reintroduced similar legislation in August 2009 but that it's been stuck in a House subcommittee even though House Speaker Nancy Pelosi once said there was an urgent need to enact it.

Overall, Net Neutrality proponents responded on today by saying the FCC should slap landline-style regulations on Internet service providers which could involve price regulation, service quality controls and even technological mandates.

Public Knowledge's Gigi Sohn said "the FCC should immediately start a proceeding bringing Internet access service back under some wireless carrier regulation."

Yesterday, the agency hinted that it was thinking along the same lines. It didn't "close the door to other methods for achieving this important end," and an FCC spokeswoman declined to elaborate any further.

For its part, Comcast said that it didn't immediately have a response to the Court's decision.

The court ruling also is likely to shift the debate to whether Congress will choose to explicitly grant the agency the authority to regulate wireless companies' network management practices. It will also likely revive lobbying coalitions that have been defunct since about May of 2006.

A little over four years ago, Congress rejected no less than five proposed bills, backed by groups including Google, Amazon.com, Free Press and Public Knowledge, that would have handed the FCC the power to police Net Neutrality issues.

Even though the Democrats have enjoyed a majority on Capitol Hill for the past three years, the political leadership has shown little interest in resuscitating those proposals.

Raymond F. Tatel wrote in his 36-page proposal at the time "we have to decide whether the FCC has the authority to regulate an Internet service provider's network management practices or not. The agency may exercise this ancillary authority only if it demonstrates that its action (barring Comcast from interfering with its customers' use of peer-to-peer networking applications) is reasonably ancillary to the effective performance of its statutorily mandated responsibilities."

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Source: WLR.