April 7, 2010

Court blocks push to regulate internet traffic

Kara Rowland and Stephen Dinan THE WASHINGTON TIMES

A federal appeals court on Tuesday undercut the government’s push for “net neutrality” when it said the Federal Communications Commission does not have the authority to tell Internet service providers how to manage the traffic on their networks.

Free-market advocates hailed the ruling, in favor of Comcast Corp. and against the FCC, as a victory for keeping the Internet free of government interference. But consumer groups warned that it leaves the Web without a traffic cop and opens the door for companies to block or slow access to certain applications, such as popular “peer-to-peer” file-sharing services like BitTorrent.

The decision by the U.S. Circuit Court of Appeals for the District of Columbia still leaves an opening for Congress to intervene and delegate authority to the FCC, which key Democrats in Congress said they will now try to do.

“The FCC can and must continue the role it has always played protecting consumers and encouraging the deployment of networks through the development of every communications technology,” said Sen. John Kerry, Massachusetts Democrat.

The three-judge panel’s unanimous ruling throws a wrench into one of FCC Chairman Julius Genachowski’s marquee initiatives to mandate that Internet service providers treat all Web traffic equally – an approach backers call net neutrality.

“Today’s appeals court decision means there are no protections in the law for consumers’ broadband services. Companies selling Internet access are free to play favorites with content on their networks, to throttle certain applications or simply to block others,” said Gigi B. Sohn, president of Public Knowledge, who said net neutrality is now “in legal limbo.”

The FCC has not said whether it plans to appeal the ruling, but spokeswoman Jen Howard said commissioners see a continued role for the agency.

“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,” she said.

The fight has turned political, with many Democrats on Capitol Hill favoring net neutrality and Republicans arguing against it.

“The Internet has flourished because of both its wondrous utility and the fact that it has been allowed to develop with minimal government interference,” said Rep. Tom Price, Georgia Republican. “The federal government is not known for being either nimble or flexible, both qualities which would be absolutely necessary to prevent such tight restrictions on a freewheeling medium like the Internet from doing more harm than good.”

The case stemmed from Internet users’ discovery several years ago that Comcast was “throttling,” or limiting speeds on peer-to-peer file sharing, which can involve the downloading of large amounts of data. Even as the FCC began looking at complaints, Comcast worked with BitTorrent, a peer-to-peer application, to come up with a new plan for managing the service provider’s bandwidth. But months later, the FCC issued an order anyway, directing Comcast to follow through on the plan and warning of an injunction if it didn’t.

Comcast sued to overturn the order, arguing that Congress had never given the FCC the authority to regulate how companies control traffic.

In a statement, the company said the ruling cleared its name and reputation.

Comcast, Verizon Communications and other Internet service providers say more than half of all their traffic comes from a small group of users. The companies said they should be able to manage traffic so they can ensure the best experience for the majority of users.

But Google and other content providers fear companies could favor certain traffic and put competitors at a disadvantage.

There are several avenues for the FCC and net neutrality backers to pursue. They could appeal the ruling to the full appeals court or the Supreme Court, seek specific authority from Congress, or try to write rules under a different part of the law that governs the FCC.

Dating back to the 1930s, the commission has had the power to regulate traditional media communications, such as phone and broadcast TV and radio services. The court on Tuesday said the agency lacks the authority to regulate broadband, which it began classifying in 2002 as an “information service.”

That has prompted some consumer advocates to urge regulators to move broadband under the FCC’s traditional regulatory framework, known as “common carrier” services.

But critics argue that such a move would risk being overturned by the courts again, as the agency would have to base the policy change on a new factual finding to avoid being found “arbitrary and capricious.”

Commissioner Robert M. McDowell, a Republican who dissented on the original Comcast order, warned against classifying broadband as a phone service.

“I hope this decision will provide certainty in the marketplace and will not lead to the unnecessary classification of broadband service as a monopoly phone service” under federal communications laws, Mr. McDowell said.

The net neutrality fight isn’t new. Kevin J. Martin, a Republican appointed by President George W. Bush to the FCC chairmanship, agreed to a 2005 policy statement in favor of net neutrality principles, saying consumers should be able to use the applications of their choice, but also allowed for companies to exercise “reasonable” network management.

Even prior to Tuesday’s ruling, the enforcement authority of that statement was unclear, and advocates of net neutrality have demanded that the commission go further. Soon after taking the reins at the agency last year, Mr. Genachowski announced plans to adopt formal rules on net neutrality despite Congress’ failure to act on several bills that would have established clear statutory authority.