FCC loses court ruling over Net 'neutrality'
By JOELLE TESSLER
WASHINGTON — A federal court threw the future of Internet regulations into doubt yesterday with a far-reaching decision that went against the Federal Communications Commission and could even hamper government's plans to expand U.S. broadband access.
The U.S. Court of Appeals for the District of Columbia ruled that the FCC lacks authority to require broadband providers to give equal treatment to all Internet traffic flowing over their networks. That was a big victory for Comcast Corp., the nation's largest cable company, which had challenged the FCC's authority to impose such "network neutrality" obligations.
Supporters of network neutrality, including the FCC chairman, have argued that the policy is necessary to prevent broadband providers from favoring or discriminating against certain Web sites and online services, such as Internet phone programs or software that runs in a Web browser. Advocates say nondiscrimination rules have traditionally applied to so-called "common carrier" public networks from roads and highways to electrical grids and telephone lines.
But broadband providers such as Comcast, AT&T Inc. and Verizon Communications Inc. argue that after spending billions of dollars on their networks, they should be able to sell premium services and manage their systems to prevent certain applications from hogging capacity.
Yesterday's unanimous ruling by the three-judge panel was a setback for the FCC because it questioned the agency's authority to regulate broadband. It has serious implications for the ambitious national broadband-expansion plan released by the FCC last month. The FCC needs the authority to regulate broadband so that it can push ahead with some of the plan's key recommendations. Among other things, the FCC proposes to expand broadband by tapping the federal fund that subsidizes telephone service in poor and rural communities.
In a statement, the FCC said it remains "firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans" and "will rest these policies . . . on a solid legal foundation."
Comcast welcomed the decision, saying "our primary goal was always to clear our name and reputation."
The case centers on Comcast's actions in 2007 when it interfered with an online file-sharing service called BitTorrent, which lets people swap movies and other big files over the Internet. The next year the FCC banned Comcast from blocking subscribers from using BitTorrent.
The commission, at the time headed by Republican Kevin Martin, based its order on a set of net neutrality principles it had adopted in 2005.
But Comcast argued that the FCC order was illegal because the agency was seeking to enforce mere policy principles, which don't have the force of regulations or law. That's one reason that Martin's successor, Democratic FCC Chairman Julius Genachowski, is trying to formalize those rules.
The cable company had also argued the FCC lacks authority to mandate net neutrality because it had deregulated broadband under the Bush administration, a decision upheld by the Supreme Court in 2005.