Observers Say Decision May Force FCC's Hand

[Source: National Journal, by Juliana Gruenwald, April 6, 2010]

The FCC signaled Tuesday that it will continue to pursue efforts to ensure network neutrality despite an appeals court ruling that said the agency overstepped its authority when it cracked down on Comcast for certain network management practices.

The ruling by the U.S. Court of Appeals for the District of Columbia dealt with the FCC's 2008 enforcement action under then-Chairman Kevin Martin against Comcast for interrupting service to customers who used the high-bandwidth, file sharing service BitTorrent, which Comcast said was slowing down the network.  Most observers agree Tuesday's ruling is likely to impact the FCC's current proceedings aimed at imposing tougher network neutrality rules to prevent broadband providers from serving as content gatekeepers on the Internet.

FCC spokeswoman Jen Howard indicated in a statement that the agency may likely take a different route to address network neutrality.  "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."

Comcast Vice President of Government communications Sena Fitzmaurice said in a statement that the company was "gratified" by the ruling and that Comcast's primary goal was to "clear our name and reputation."  She added that the broadband provider "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."

Still even advocates of stronger network neutrality rules voiced concern about the ruling's effect on current FCC proceedings.  Public interest groups said the decision leaves the FCC with little authority to regulate broadband providers and hampers its ability to implement its ambitious national broadband plan.  "Past FCC actions created a huge loophole in the law that leaves the agency unable to protect consumer privacy or promote universal broadband access," Free Press Research Director S. Derek Turner said in a news release.

In its analysis of the decision, the Stifel Nicolaus investment firm said, "although today's decision is an immediate victory for broadband providers, they may have won the battle only to face a larger war."  The firm indicated that the decision could lead the FCC to reclassify broadband services as a more heavily regulated telecommunications service, an action some network neutrality advocates are calling on the FCC to take.

Markham Erickson, executive director of the Open Internet Coalition, said in a statement that, "The legal challenge to Title I authority by Comcast has created an outcome where the FCC has no option but to immediately open a proceeding to clarify its authority over broadband network providers under Title II" of the communications act.

Public Knowledge President Gigi Sohn echoed this view, arguing in a statement that "some parts of the communications act, which prohibit unjust and unreasonable discrimination, could be applied here.  The commission would not have to impose a heavy regulatory burden on the telephone and cable companies, yet consumers could once again have the benefit of legal protections and the broadband plan could go forward."

In a news release, Senate Commerce Communications Subcommittee Chairman John Kerry, D-Mass., said while he is not "advocating that the FCC reclassify broadband services as a result of this decision...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 added that Congress may need to craft "a new legal and regulatory framework for broadband, especially if reclassifying broadband as a telecommunications service proves too difficult to administer.  I am willing to work with all interested parties on the construction of that framework."

Senate Commerce ranking member Kay Bailey Hutchinson, R-Texas, said in a statement that the court said "what many already believed, the FCC does not have authority to act in this area.  In light of this important court decision, policy makers should assess whether there should be any regulatory role for the agency as it relates to the Internet and how private companies manage their investment."