D.C. Circuit Court of Appeals rules in favor of Comcast in net neutrality dispute with F.C.C.

Last week the D.C. Circuit Court of Appeals ruled against the F.C.C. in their ongoing dispute with Comcast and others about whether the F.C.C. has the legal authority to regulate internet service providers. [1]  At issue was whether the F.C.C. could legally dictate to Comcast that it had to treat all internet traffic coming through Comcast’s broadband network infrastructure equally.  This question has been a hot-button issue in public policy debates and amongst high-tech companies because the regulation affects who is and who isn’t able to potentially serve and/or view content.

Lawrence Lessig summarized net neutrality principles in an 2006 op-ed, “Net neutrality means simply that all like Internet content must be treated alike and move at the same speed over the network. The owners of the Internet’s wires cannot discriminate. This is the simple but brilliant “end-to-end” design of the Internet that has made it such a powerful force for economic and social good.” [2]  Net neutrality opponent Robert Pepper of Cisco Systems states, “The supporters of net neutrality regulation believe that more rules are necessary. In their view, without greater regulation, service providers might parcel out bandwidth or services, creating a bifurcated world in which the wealthy enjoy first-class Internet access, while everyone else is left with slow connections and degraded content. That scenario, however, is a false paradigm. Such an all-or-nothing world doesn’t exist today, nor will it exist in the future. Without additional regulation, service providers are likely to continue doing what they are doing. They will continue to offer a variety of broadband service plans at a variety of price points to suit every type of consumer.” [3]

In 2002, the Bush Administration deregulated internet cable broadband providers on the grounds that they were distinct from the high-speed internet services offered by telecommunications companies such as AT&T and Verizon. [4]  Thus, companies like Comcast and Time Warner Cable were viewed as “information services” because cable providers offered a bundle of services such as email, web hosting, and other services, which are allegedly distinct from the services offered by telecommunications companies. As a result, cable internet service providers were seen as exempt from the Common Carrier section of the Federal Communications Act.

In 2008, the F.C.C. ordered Comcast to stop blocking peer-to-peer filesharing technology known as Bit Torrent. [5] The basis for the restriction was a theory of net neutrality, which was adopted in 2005 and prevented internet service providers from favoring or disfavoring one type of traffic over another. [6]  The F.C.C. used those guidelines and principles when enforcing communication laws throughout the remainder of the Bush Administration, but now intend on making the guidelines into full-fledged regulations given the interest of F.C.C. Chariman Julius Genachowski and the recent October decision to proceed in writing the rules.

Comcast challenged the decision in the D.C. Circuit Court of Appeals, arguing that the F.C.C. lacked authority to block or slowdown traffic from specific sources under current law. [7] By winning the appeal, Comcast effectively forced the F.C.C. to reconsider its regulatory authority over internet service providers and may prompt Congress to step in and pass legislation related to net neutrality.  Because internet service providers currently don’t favor or disfavor certain types of internet traffic, the effects of this decision on the end-user will be minimal for the time being.  If the F.C.C. intends to further regulate internet service providers they currently have to carefully draft their regulations in lieu of last week’s decision.  Congress may attempt to enter the fray and pass legislation granting the F.C.C. additional regulatory authority over internet service providers, but that would actually require crafting a bill that can pass both chambers of Congress.  In the current political environment, net neutrality is a political hot button issue that most politicians would likely save for another day.

[1] Comcast v. F.C.C., 08-1291, U.S. Court of Appeals for the District of Columbia Circuit, Apr. 6, 2010, available at http://pacer.cadc.uscourts.gov/common/opinions/201004/08-1291-1238302.pdf (last visited Apr. 12, 2010).

[2] Lawrence Lessig & Robert W. McChesney, No Tolls on the Internet, Washington Post, Jun. 8, 2006,  available at http://www.washingtonpost.com/wp-dyn/content/article/2006/06/07/AR2006060702108.html (last visited Apr. 12, 2010).

[3] Robert Pepper, Network Neutrality: Avoiding a Net Loss, TechNewsWorld, Mar. 14, 2007,  available at http://www.technewsworld.com/story/56272.html (last visited Apr. 12, 2010).

[4] Telecommunications: F.C.C. Rules on Cable Access, New York Times, Mar. 15, 2002,  available at http://www.nytimes.com/2002/03/15/business/technology-briefing-telecommunications-fcc-rules-on-cable-access.html?pagewanted=1 (last visited Apr. 12, 2010).

[5] Comcast Statement on F.C.C. Internet Regulation Decision, Comcast, Aug. 1, 2008, available at http://www.comcast.com/About/PressRelease/PressReleaseDetail.ashx?PRID=786 (last visited Apr. 12, 2010).

[6] F.C.C. Net Neutrality principles, FCC 05-151, Sept. 23, 2005,  available at http://fjallfoss.fcc.gov/edocs_public/attachmatch/FCC-05-151A1.pdf (last visited Apr. 12, 2010).

[7] Comcast to Appeal F.C.C. Network Management Order, Gigaom.com, Sept. 4, 2008, available at http://gigaom.com/2008/09/04/comcast-to-appeal-fcc-network-management-order/ (last visited Apr. 12, 2010).

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