Court sides with Comcast against FCC in network management battle

APRIL 6, 2010 By Stephen Hardy -- The U.S. Court of Appeals for the District of Columbia ruled this morning that the Federal Communications Commission (FCC) did not have the authority to order cable MSO Comcast Corp. to stop blocking subscriber access to the BitTorrent file-sharing system. The ruling puts into doubt the FCC’s authority to regulate the provision of broadband services, a key part of its National Broadband Plan (see "FCC National Broadband Plan to call for funding changes, infrastructure access and 1 Gbps to anchor institutions").

The FCC made its ruling in August 2008, based on its Internet Policy Statement of 2005. The three-judge court panel heard Comcast’s appeal of the ruling this past January 8.

“In this case we must decide whether the Federal Communications Commission has authority to regulate an Internet service provider’s network management practices,” wrote Circuit Judge David S. Tatel as part of this morning’s rulings. Judge Tatel noted that the FCC, ”[a]cknowledging that it has no express statutory authority over such practices,” relied on the policy statement to make its ruling, by virtue of the authority granted by the Communications Act of 1934. This law enables the FCC to “perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions.”

The FCC therefore could legally bar Comcast from throttling peer-to-peer communications on its network only if it could prove that its actions were “reasonably ancillary to the...effective performance of its statutorily mandated responsibilities,” the court said.

Wrote Judge Tatel, “The Commission has failed to make that showing.”

Or, as the judge put it more bluntly later in the ruling, “Policy statements are just that -- statements of policy. They are not delegations of regulatory authority.” The Commission can enforce such ancillary policy decisions in areas where it has statutory authority. Network management is not one of those areas, the court ruled.

In addition to questioning whether the FCC had overstepped its jurisdiction, Comcast also argued that the FCC’s order was procedurally flawed and that aspects of the FCC’s order “are so poorly reasoned as to be arbitrary and capricious.” The court declined to rule on these additional assertions.

The decision strikes a blow to the net neutrality policies of the FCC under the Bush Administration, as well as the efforts of the Commission under the current Administration to solidify those policies into enforceable rules. It also calls into question how much of its recently unveiled National Broadband Plan it can put into action without congressional help.

The ruling has not dissuaded the Commission from its aims, however. “The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans,” said FCC Spokesperson Jen Howard in a statement issued after the ruling. “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.”

While the FCC made no comment on its plans, these “other methods” could involve Congressional action or changing the regulatory status of broadband from “lightly regulated” to “heavily regulated.” The Commission also could also appeal today’s decision.

Comcast quickly aligned itself with the FCC’s aims. “Our primary goal was always to clear our name and reputation,” said Sena Fitzmaurice, vice president of government communications at Comcast, in a statement posted on the carrier’s website today. “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.”