Mark's Musings on the Telecommunications Industry: Is The Court of Appeals Decision in Comcast v. FCC Good for Net Neutrality?

Much was written this week about the U.S. Court of Appeals for the District of Columbia’s decision against the FCC fining Comcast for blocking BitTorrent traffic in 2008. Most of those articles missed the point of the decision and declared that the FCC cannot regulate the Internet. This decision said one thing, and one thing only: the FCC overstepped its enforcement authority in telling Comcast how they can manage their network. It did not vindicate Comcast in blocking BitTorrent traffic nor say that the FCC cannot create regulations and enforce them on Internet services. It just set a limit on where the FCC’s enforcement ends based on their past actions. Specifically the court stated that the FCC did not have ancillary authority to regulate Comcast's network management practices.¹ It is expected that the FCC will appeal the case to the Supreme Court.²

On the surface it may appear that Comcast and other Internet Service Providers (ISP) are winners and the public is a loser. That interpretation is not entirely accurate when you take a longer-term perspective. The backlash from the decision may be worse than the decision itself. The court itself made it a point to support the necessity of a free-and-open Internet as noted from this statement by the FCC:

"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," said FCC spokeswoman Jen Howard.³

The court’s decision prompted an immediate backlash from the press, consumer groups, and lawmakers for Congress to take action to remedy the situation. That remedy could range from having Internet service reclassified as a telecommunications service which gives the FCC the necessary authority or a law defining “net neutrality” and other aspects to regulate the Internet. All of them come with consequences that could restrict innovation and unfettered use of the Internet.

The FCC itself thwarted its own ability to regulate Internet services when it classified them as the less regulated Title I services. I believe that this was the most appropriate action for them to take because it limited their authority to regulate. If it would have kept them at a Title II service, then they would have been within their jurisdiction to regulate Comcast’s and other ISP’s traffic management techniques. This action would have stifled innovation and the delivery of new services because the service providers would have opted for more restrictive services and information providers like Google would have had to fight it out at the FCC and courts. If the FCC attempts to reclassify Internet access as a Title II service expect to see this type of behavior.

The alternative is to get Congress involved and have them legislate the definition of net neutrality and expand the FCC’s powers even more. Although this may be what the EFF and other consumer advocates want, the most likely scenario is that the resulting legislation is something that nobody wants, and even could be contradictory to the principles of net neutrality. Almost every Congressman does not understand the nuances of the issues that distinguish an application/site/service from data transmission. I have written at length on my belief of net neutrality and the FCC has come out with a higher level statement that does not contradict my principles.

I clearly believe that this issue should stay under the jurisdiction of the FCC and that the FCC needs to clearly define the rules of net neutrality with the hands-off approach that made the Internet what it is today. The Congress does not have the expertise nor is it the proper forum for industry, regulators, and consumers to come together to define how to keep innovation and commerce flowing on the Internet. The FCC needs to go through the proper rulemaking procedure so it can enforce these principles. Service providers need the ability to manage traffic on their network to ensure a quality experience for all customers and consumers need the ability to access any lawful service over these networks equally whether they are provided by the network provider or a third-party. The best way to achieve this balance is to have true competition in the access network. Regulation is a last resort when there is no competition and apparently I am not alone in my opinion.

My next article will discuss how Google is doing more to stimulate competition than the National Broadband Plan.