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Tuesday, February 8, 2011

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 DC Circuit, as did other public interest groups.

The DC 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.

The court’s ruling has thrown into doubt the FCC’s authority to regulate Internet network management. The FCC had announced the possibility of reclassifying the transmission component of broadband Internet services as a telecommunications service under Title II of the Communications Act. However, on December 1, 2010, Chairman Genachowski announced that the agency had abandoned its proposal to reclassify broadband Internet services

On December 21, 2010, the Commission adopted new open Internet rules in its Open Internet Order. As the chairman previously stated, broadband Internet services were not reclassified as information services. Instead, the Commission cited Section 706 of the Telecommunications Act of 1996 as well as authority ancillary to its statutory mandates in Titles II, III, and VI of the Communications Act of 1934. Two commissioners dissented. Commissioner McDowell published a lengthy rebuttal to the Commission’s jurisdictional argument in his dissenting statement. This report will analyze both the Commission’s jurisdictional arguments and Commissioner McDowell’s counter-arguments. On January 20, 2011, Verizon appealed the Commission’s Open Internet Order, alleging, among other things, that the FCC has acted outside the bounds of its statutory authority, the rules are arbitrary and capricious, and that the rules are unconstitutional.

For further information on the policy aspects of this debate, see CRS Report RS22444, Net Neutrality: Background and Issues, by Angele A. Gilroy.

Date of Report: January 28, 2011
Number of Pages: 32
Order Number: R40234
Price: $29.95

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