Comcast Defeats FCC Net Neutrality Powers; Censorship Reigns with Impunity

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By William McQuillen and Todd Shields
Business Week (Bloomberg)

Federal regulators lacked authority to censure Comcast Corp. for interfering with subscribers’ Internet traffic, a U.S. court said in a decision that could limit the government’s power to police companies’ Web behavior.

The U.S. Court of Appeals for the District of Columbia Circuit, in a unanimous decision by a three-judge panel, vacated the Federal Communications Commission’s 2008 order against the largest U.S. cable company.

The ruling is a setback for Internet companies led by Google Inc. and Inc. that want so-called net neutrality rules to keep Internet providers such as Comcast, Verizon Communications Inc. and AT&T Inc. from limiting Web traffic.

“The D.C. Circuit’s dropped a bomb on us,” Ben Scott, policy director of the advocacy group Free Press that challenged Comcast and sided with the FCC, said in an interview. “Comcast is now permitted to block Web sites with impunity.”

The FCC in 2008 censured Comcast for blocking subscribers using peer-to-peer software often used to view videos, a decision hailed by consumer groups as a step toward keeping Web traffic free of obstruction from corporations. Comcast said it delayed some file transfers to alleviate network congestion.

Today’s decision “invalidated the prior commission’s approach” and didn’t “close the door to other methods” for “preserving a free and open Internet,” FCC spokeswoman Jen Howard said in an e-mailed statement.

White House ‘Committed’

The White House spokesman Robert Gibbs said President Barack Obama supports net neutrality.

“We’re committed to that and committed to providing businesses with the certainty they need as well,” Gibbs said at his daily press briefing.

“We are gratified by the court’s decision,” Sena Fitzmaurice, a Comcast spokeswoman, said in an e-mailed statement. “Comcast remains committed to the FCC’s existing open Internet principles, and we will continue to work constructively with this FCC.”

The court said a “variety of substantive and procedural reasons” precluded the FCC from having authority over Philadelphia-based Comcast’s Internet practices.

The decision “creates a dangerous situation, one where the health and the openness of the Internet is being held hostage” to the behavior of telephone and cable companies that own the wires used for Internet traffic to homes and businesses, said the Open Internet Coalition in an e-mailed statement.

‘Neutrality Rules’

The Washington-based group, which lists members including Amazon, Google, EBay Inc. and IAC/Interactive Corp., said the ruling could eliminate the agency’s ability to write new open- Internet rules.

The FCC is taking comments until April 8 on net neutrality rules that would forbid companies from favoring content they own, and from blocking or slowing rivals’ services.

Today’s decision “represents a severe limitation on the agency’s future authority” to regulate companies’ activities on the Internet, said Andrew Jay Schwartzman, a Washington-based attorney who helped defend the FCC’s position in the case, in an interview.

The FCC may appeal the case, and may “seriously consider” placing Internet services into a stricter regulatory classification, said Andrew Lipman, a Washington-based partner in the media, telecommunications and technology practice at Bingham McCutchen LLP, in an interview.

‘Destructive Consequences’

Scott, the Free Press policy director, said the decision leaves FCC Chairman Julius Genachowski “powerless to stop people from blocking Web sites, unless he acts to reassert his authority” by moving Internet service under telephone rules –a step Scott said could be taken with a simple majority vote at the Democrat-dominated agency.

Such a reclassification of Internet service would have “far-reaching and destructive consequences” including “years of “investment-deterring uncertainty and litigation,” companies including AT&T, Verizon and Time Warner Cable Inc. said in a Feb. 22 letter to the FCC.

The Open Internet Coalition said the FCC should “clarify its authority” over providers of Internet service.

Internet Users

Verizon said in a statement that the court’s decision would have “no impact” on Internet users whose “interests remain fully protected.” The court recognized the FCC has authority over Internet access, said Verizon General Counsel Randal Milch in the statement.

On Jan. 13, FCC senior counselor Colin Crowell said in an e-mail that if the appeals court “removed the legal foundations of the agency’s current policy framework, the commission would act expeditiously to ensure that consumers are fully protected.”

Separately, the FCC and the Justice Department are reviewing Comcast’s proposed $28 billion deal for control of General Electric Co.’s NBC Universal unit.

The case is Comcast Corp. v. Federal Communications Commission, 08-1291, U.S. Court of Appeals for the District of Columbia Circuit (Washington).

–Editors: Glenn Holdcraft, John Pickering.

One response to “Comcast Defeats FCC Net Neutrality Powers; Censorship Reigns with Impunity

  1. This from

    The future of the Internet is in grave danger.

    A federal appeals court ruled today that the FCC doesn’t have the authority to protect Internet users. The decision means the agency can’t stop Comcast from blocking Web traffic. It can’t carry out the National Broadband Plan. It won’t be able to safeguard Net Neutrality.

    Let’s Win Back Control of the Internet: The FCC Must Act on Our Behalf.

    I’m a policy lawyer at Free Press. They don’t usually let me send you e-mails, but today is different. Let me explain how we got into this mess:

    Two years ago, the FCC ruled that Comcast could not block online content, and Comcast challenged the ruling in court. Today, the court ruled in Comcast’s favor, effectively placing the Internet in the hands of big phone and cable companies.

    This decision exploits a loophole in current law — the result of overzealous deregulation by the Bush administration — that threatens Net Neutrality and leaves the FCC unable to achieve the crucial goals of the National Broadband Plan.

    Thankfully, this FCC can correct its predecessors’ mistakes, reassert its authority, and close the loophole. (Get ready, this is a tad complicated.)

    The FCC needs to “reclassify” broadband under the Communications Act. In 2002, the FCC decided to place broadband providers outside the legal framework that traditionally applied to companies that offer two-way communications services, like phone companies.

    That decision is what first put Net Neutrality in jeopardy, setting in motion the legal wrangling that now endangers the FCC’s ability to protect our Internet rights.

    But the good news is that the FCC still has the power to set things right, and to make sure the free and open Internet stays that way. And once we’ve done that, the FCC can ensure that Comcast can’t interfere with our communications, no matter the platform.

    That won’t happen unless thousands, even millions, of us take action now.

    To be clear: This court decision hurts. But it’s created the opportunity for us to fix what was broken so many years ago.

    It’s our Internet, not theirs. Let’s take it back.


    Chris Riley
    Policy Counsel

    P.S. We need thousands of new supporters to contact the FCC. Forward this e-mail to your friends and family, and share our action on Twitter and Facebook.

    If you haven’t already, you can also join our E-Activist list.

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