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Thursday, May 6, 2010

The FCC’s Authority to Regulate Net Neutrality after Comcast v. FCC

Kathleen Ann Ruane
Legislative Attorney

In 2007, through various experiments by the media, most notably the Associated Press, it became clear that Comcast was intermittently blocking the use of an application called BitTorrent™ and, possibly, other peer-to-peer (P2P) file sharing programs on its network. Comcast eventually admitted to the practice and agreed to cease blocking the use of the P2P applications on its network. However, Comcast maintains that its actions were reasonable network management and not in violation of the Federal Communications Commission's ("FCC" or "Commission") policy. 

In response to a petition from Free Press for a declaratory ruling that Comcast's blocking of P2P applications was not "reasonable network management," the FCC conducted an investigation into Comcast's network management practices. The FCC determined that Comcast had violated the agency's Internet Policy Statement when it blocked certain applications on its network and that the practice at issue in this case was not "reasonable network management." The FCC declined to fine Comcast, because its Internet Policy Statement had never previously been the basis for enforcement forfeitures. Comcast appealed this decision to the U.S. Court of Appeals for the D.C. Circuit, as did other public interest groups. 

The D.C. Circuit ruled on April 6, 2010, that the FCC could not base ancillary authority to regulate cable Internet services solely upon broad policy goals contained elsewhere in the Communications Act. Whatever the merits of other jurisdictional arguments the FCC may advance, the court found that the FCC did not have jurisdiction to enforce its network management principles on the basis it had advanced in that case. The court did not address the other questions posed by the case, including whether the FCC could proceed via adjudication. 

On October 22, 2009, the FCC issued a notice of proposed rulemaking that would codify the four network management principles into regulations and would add two additional principles. The fifth principle would be one of non-discrimination and the sixth principle would be one of transparency. The period for public comment was open until January 14, 2010, with reply comments due in March of 2010. In light of the decision issued by the D.C. Circuit, the FCC may craft its jurisdictional argument for the adoption of the rules differently. It is possible that the agency could advance an argument that would satisfy the standard for its use of ancillary authority. Any new rules announced pursuant to this rulemaking will likely result in a court challenge. 

Congress could act to grant the FCC the authority necessary to adopt network management rules. If a law were enacted, the FCC would not have to rely on its ancillary jurisdiction to enforce network management rules. 

Date of Report: April 23, 2010
Number of Pages: 12
Order Number: R40234
Price: $29.95

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