On Tuesday April 6, 2010 the FCC lost its case against Comcast. The ruling undermines the FCC's authority to regulate ISPs and therefore broadband control and regulation. With the FCC not in the picture, then who is in charge of the broadband--the ISPs?!! How will the FCC respond? is the question that is not yet answerable.The U.S. of Appeals for the District of Columbia, in a 3 to 0 decision sided with Comcast. The Court stated that the FCC did not have the authority to require Comcast to treat all ISP traffic equally. The court said that the FCC "failed to justify exercising jurisdiction" when the FCC ruled against Comcast after Comcast blocked peer file-sharing traffic from BitTorrent.
The court's focus was on broadband services. Broadband services are in a different category compared to telephone, wireless and cable transmission. Part of the court opinion stated: "The Commission may exercise this 'ancillary' authority only if it demonstrates that its action...is reasonably ancillary to the...effective performance of its statutorily mandated responsibilities." According to the court, the FCC did not meet that requirement.
This outcome will have a profound influence on the next actions of the FCC. Net Neutrality is at stake. It appears that the FCC will have to reclassify broadband service, a Title II designation, as a common carrier service in order to obtain the desired authority. The court ruling also places the FCC's authority in question as relates to the $8 billion federal phone subsidy to include broadband for rural areas of the U.S.
If the FCC does not obtain authority over broadband and ISP services, then the ISPs can do whatever they want in pricing, traffic management, content delivery and access speeds. An example could be that Comcast blocks traffic from web sites that provide competing services such as Hulu and Netflix videos.
Without reclassification of broadband as a common carrier service, the FCC could find itself continually in court. Every time a broadband/ISP provider doesn't like the FCC decision, they will go to court. The FCC, based on this recent decision would probably lose the court cases.
An FCC spokesperson issued a statement:
The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans. It will rest these policies -- all of which will be designed to foster innovation and investment while protecting and empowering consumers - on a solid legal foundation. 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.
Public interest groups did not like the decision. One commented that the Comcast decision will drive the FCC to seek tighter regulation, most of which will not be favorable to the ISPs. Comcast may have actually accelerated the move to more broadband regulation by its court action.
The threat by the broadband providers is that if the FCC gains regulation, then the providers will reduce their investments in broadband services. I doubt this, except for low income and rural areas. Conservative groups such as the Cato Institute applauded the decision. Cato believes that this technology issue will have little traction with the technologically challenged members Congress and the Senate.
If the FCC does reclassify broadband services as a common carrier service, there will be further court challenges. The FCC may be deemed to have that authority of reclassification. On the other hand, if not, then legislation will have to be passed to gain the authority. You can bet that the lobbying dollars will be substantial as the near monopolies of Comcast, AT&T and Verizon fight to control their service offerings without any consumer protection. On the other side, search engine sites and content providers such as Google, Yahoo, Microsoft and the thousands of others will be on the side opposite the ISPs.
This question of traffic management has already been tackled in Canada. The Canadian Radio-television and Telecommunications Commission (CRTC) allows limited traffic management by the ISPs. There are two qualifiers for the traffic management. First, the traffic management policies must be neutral and not preferential. Second, the traffic management policies must be clearly stated for consumers and wholesale buyers. The Canadian rules only apply to wireline service. Wireless service may be included in the future. So far there have been no objections. Our U.S. based ISPs don't even want something as simple as the Canadian rules.
