Comcast won a judgment against the FCC in a ruling over its network management policies.
Back in 2008 I wrote about the FCC’s smackdown of Comcast for its BitTorrent network management debacle. Last year I wrote about the broader issue of network management in a net neutrality world. Today Comcast won the first round against the FCC:
A federal appeals court on Tuesday dealt a sharp blow to the efforts of the Federal Communications Commission to set the rules of the road for the Internet, ruling that the agency lacks the authority to require broadband providers to give equal treatment to all Internet traffic flowing over their networks.
The decision, by the United States Court of Appeals for the District of Columbia Circuit, specifically concerned the efforts of Comcast, the nation’s largest cable provider, to slow down customers’ access to a service called BitTorrent, which is used to exchange large video files, most often pirated copies of movies.
The ruling (PDF file) is narrow, but with broad implications. It doesn’t get into the issue of net neutrality at all. Rather, Comcast challenged whether or not the FCC had regulatory jurisdiction to control its network management policies. The FCC asserted that it did, even though the Communications Act doesn’t explicitly address this area - a fact the FCC acknowledged, relying instead on previous rulings about its power to regulate areas “ancillary” to its explicit authority. The Court ruled solely on this jurisdictional issue, finding the FCC’s argument unpersuasive. The money quote:
the Commission maintains that congressional policy by itself creates “statutorily mandated responsibilities” sufficient to support the exercise of section 4(i) ancillary authority. Not only is this argument flatly inconsistent with Southwestern Cable, Midwest Video I, Midwest Video II, and NARUC II, but if accepted it would virtually free the Commission from its congressional tether. As the Court explained in Midwest Video II, “without reference to the provisions of the Act” expressly granting regulatory authority, “the Commission’s [ancillary] jurisdiction ... would be unbounded.” 440 U.S. at 706. Indeed, Commission counsel told us at oral argument that just as the Order seeks to make Comcast’s Internet service more “rapid” and “efficient,” Order, 23 F.C.C.R. 13,036–37, ¶ 16, the Commission could someday subject Comcast’s Internet service to pervasive rate regulation to ensure that the company provides the service at “reasonable charges,” 47 U.S.C. § 151. Oral Arg. Tr. 58–59. Were we to accept that theory of ancillary authority, we see no reason why the Commission would have to stop there, for we can think of few examples of regulations that apply to Title II common carrier services, Title III broadcast services, or Title VI cable services that the Commission, relying on the broad policies articulated in section 230(b) and section 1, would be unable to impose upon Internet service providers. If in Midwest Video I the Commission “strain[ed] the outer limits of even the open-ended and pervasive jurisdiction that has evolved by decisions of the Commission and the courts,” 406 U.S. at 676 (Burger, C.J., concurring), and if in NARUC II and Midwest Video II it exceeded those limits, then here it seeks to shatter them entirely.
Of course, there are people quite up in arms about this:
Consumer advocates said the ruling, one of several that have challenged the F.C.C.’s regulatory reach, could also undermine all of the F.C.C.’s attempts to regulate Internet service providers and establish its authority over the Internet, including its recently released national broadband plan.
“This decision destroys the F.C.C.’s authority to build broadband policy on the legal theory established by the Bush Administration,” said Ben Scott, the policy director for Free Press, a nonprofit organization that advocates for broad media ownership and access.
TBH, I’m somewhat surprised that the FCC doesn’t have some discretion in this area, based on the 1996 update to the Communications Act, but it appears they don’t. The companies that the FCC regulates are borderline monopolies, based on network architecture issues that I discussed in my previous posts, and there is something to be said for such intervention (it’s hard to argue that what happened to AT&T 30 years ago was bad for the consumer). Although that’s really going away - you have telecomm-based fiber alternatives to cable in most if not all metropolitan areas (e.g. I have Cox Cable and Verizon FiOS fighting over my business every day). And wireless broadband is becoming a reality with Clearwire’s rollout of WiMAX (20-some-odd metropolitan areas so far) and the coming of LTE from Verizon and others, so there are some market forces in play now that weren’t there just a few years ago - which argues for continuing to go slow from a regulatory perspective.
Comcast really screwed up with their 2007 nonsense. I still completely agree with their need to manage their network, and their right to do so. But the way they did it was ham-handed and stupid. There are better solutions. The question is whether people will wake up to the complexities involved in running these networks enough to allow them to operate profitably, or if we’re going to continue to fall for the “Movies For Nothing and Pr0n For Free” mindset of much of the Internet Illuminati, who do not appear to have the slightest comprehension of what’s actually involved in running “teh InterWebs”.
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