Comcast scored a victory today when a federal appeals court shot down the Federal Communications Commission’s ability to regulate Internet service providers.
Essentially, it’s a blow to so-called Net Neutrality efforts, the push that would keep Internet Service providers like Comcast (NASDAQ:CMCSA) from differentiating - and treating differently - heavy users of the Internet. The ruling by the U.S. Court of Appeals for the District of Columbia (.pdf) said that FCC does not have the authority to require Comcast to treat all Internet traffic the same on its network. From the ruling:
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…”
The Commission has failed to make that showing. It relies principally on several Congressional statements of policy, but under Supreme Court and D.C. Circuit case law statements of policy, by themselves, do not create “statutorily mandated responsibilities.” The Commission also relies on various provisions of the Communications Act that do create such responsibilities, but for a variety of substantive and procedural reasons those provisions cannot support its exercise of ancillary authority over Comcast’s network management practices. We therefore grant Comcast’s petition for review and vacate the challenged order.
Beyond that, the ruling puts the FCC’s National Broadband Plan, which was submitted to Congress last month, in legal limbo because Net Neutrality was an integral part of it. Almost immediately, public interest groups started to chime in on the decision. Washington-based Public Knowledge, for example, said the decision harms consumers. From its statement:
Companies selling Internet access are free to play favorites with content on their networks, to throttle certain applications or simply to block others. The ability of the FCC to support broadband through universal service is in jeopardy, as is the agency’s ability to protect consumer privacy, ensure access to broadband-based emergency communications or promote access to broadband for the disabled. In our view, the FCC needs to move quickly and decisively to make sure that consumers are not left at the mercy of telephone and cable companies.
Update: Comcast issued an official statement in response to the court’s ruling:
We are gratified by the Court’s decision today to vacate the previous FCC’s order. Our primary goal was always to clear our name and reputation. We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want. Comcast 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.