Appeals Court Guts FCC Authority on Net Neutrality

A federal appeals court has sided with Comcast, and ruled the FCC does not have the authority to mandate ISPs treat all Internet traffic equally.

Remember when Comcast took a major public relations blow—and drew sanctions from the Federal Communications Commission—for forging traffic that deliberately shut down P2P sharing applications like BitTorrent and Gnutella, ostensibly in the name of “network management?” Comcast has just struck a major blow back at the FCC: a federal appeals court has ruled (PDF) that the FCC does not have the authority to impose so-called “net neutrality” requirements on Internet providers.

Comcast’s appeal was based on the notion that the FCC’s Internet Policy statement—which specifies ISPs treat all traffic and applications equally—does not have the legal authority of an actual federal regulation because it is not tied to law(s) enacted by Congress.

“The Commission may exercise this ‘ancillary’ authority only if it demonstrates that its action—here 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,’” Judge David Tatel of the U.S. Court of Appeals for the D.C. Circuit wrote in the court’s opinion.

The FCC’s recently unveiled national broadband plan relies on the agency’s authority to regulate the Internet and ISPs’ responsibilities.

The FCC has not yet indicated how it intends to pursue the matter. Options include appealing the Comcast victory and adopting the Internet Policy statement as formal regulations—however, that process would require action by Congress, and would be likely to become mired in political debate, potentially stalling the already under-the-gun national broadband plan.

Privacy advocates, consumer groups, and larger Internet businesses like Google have warned that lack of net neutrality requirements could rapidly lead to a fractured, multi-tiered Internet, where “preferred” traffic receives better service than others. Providers could potentially require companies like Google or Netflix to pay them for preferred service; alternatively, they could choose to block their customers’ services like Google or Netflix for any reason.