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Federal court curbs FCC authority on Web traffic

NEWS
Federal court curbs FCC authority on Web traffic

Wednesday, April 7, 2010

A federal appeals court ruled Tuesday that the Federal Communications Commission lacks the authority to force Internet service providers to keep their networks open to all forms of content, throwing into doubt the agency’s status as the government guardian of the Web.
The FCC has long sought to impose rules requiring Internet providers to offer equal access to all Web sites, a concept known as network neutrality. But in a unanimous decision, the U.S. Court of Appeals for the District of Columbia found that the agency lacked the power to stop cable giant Comcast from limiting traffic to a popular file-sharing site called BitTorrent.

While the Comcast case centered on the issue of network neutrality, the court’s ruling could hamper other agency initiatives, including an ambitious plan to expand high-speed Internet service nationwide and enforce new rules that hold carriers to promises of certain speeds for consumers.

The decision could spur the FCC or Congress to rewrite rules or laws to more concretely make the agency a regulator of Internet services.

The agency had intentionally kept its authority over broadband services vague, in hopes of spurring growth by keeping the market for Internet services largely deregulated. A reversal of that framework — which consumer groups have urged — would be strongly opposed by companies that operate Internet networks.

“Comcast swung an ax at the FCC to protest the BitTorrent order and they sliced right through the FCC’s arm and plunged the ax into their own back,” said Ben Scott, police director for public interest group Free Press.
The FCC’s predicament stems from Comcast’s challenge of sanctions the FCC issued against it in 2008.

In a 3-2 vote, the agency found that Comcast had violated open-Internet guidelines by slowing traffic to the BitTorrent file-sharing site. Those guidelines were meant to force broadband providers to treat all traffic equally on their networks, so as not to put any application at a disadvantage.

Comcast appealed the FCC sanction, saying the agency’s order was outside its scope. The court on Tuesday agreed.

Sena Fitzmaurice, a Comcast spokeswoman, said the company was “gratified” by the decision.

“Our primary goal was always to clear our name and reputation,” she said.

As a practical matter, the court ruling will not have any immediate impact on Internet users because Comcast and other large Internet providers are not currently restricting specific types of Web content and have no plans to do so.

The decision came as Comcast is pursuing agency approval of its proposed $30 billion merger with NBC Universal.

The cable giant has opposed FCC efforts to impose rules requiring that Internet providers offer equal access to all Web sites. The company argues, as it did in the BitTorrent case, that it needs to be able to limit some users from activities that could slow network operation for many customers, such as downloading massive movie files.

But in hearings on the merger, some lawmakers have said net neutrality rules would ensure that the combined company would not unfairly use its weight against competing Web sites.

Other companies such as Google and Facebook have supported government efforts to push net neutrality. Tuesday’s ruling may encourage the FCC to respond with what Sanford Bernstein analyst Craig Moffett calls the “nuclear option” — moving broadband providers into the same category as phone providers, which would subject them to many more rules.

That “would have sweeping implications far, far beyond net neutrality … and would bring back a raft of regulatory obligations from the days of monopoly telecommunications regulation,” Moffett said.

The decision puts in doubt dozens of policies the FCC hopes to roll out as part of the national broadband plan it released last month. It may complicate some reallocation of $8 billion in phone subsidies to build new broadband networks and hinder creation of a wireless public safety network for first responders, public advocacy groups say.

The FCC did not say specifically how it plans to respond to the court’s decision. Agency spokeswoman Jen Howard said it was important that the FCC’s broadband agenda rest on a “solid legal foundation.”

Michael Copps, a Democratic FCC commissioner, said in a statement: “It is time we stop doing the ‘ancillary authority’ dance and instead rely on the statute Congress gave us to stand on solid legal ground in safeguarding the benefits of the Internet for American consumers.”
• Source(s): Federal Communications Commission and Cisco Systems, Inc.

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