Wednesday, April 7, 2010

Big Blow to Net Neutrality

A big court decision yesterday from the U.S. Court of Appeals in DC -- the court held that the FCC lacks authority to require an Internet service provider to allow consumers to access any lawful content of their choice.

The problem is that the Communications Act doesn't expressly give the FCC the power to regulate Internet service. Even the FCC admits that. Therefore, to justify its rule, the Commission has to rely on its general power to "make such rules and regulations, and issue such orders, not inconsistent with [the Communications Act], as may be necessary in the execution of its functions."

That's obviously a pretty broad and general power. The Commission would like to be able to use it to justify anything, but the courts, sensing some need to rein it in a bit, have determined that it applies only to regulations that are "reasonably ancillary" to the Commission's effective performance of its statutorily mandated responsibilities. And, the court held, that standard wasn't met here. An order requiring net neutrality may further some of the underlying policies of the Communications Act (for example, the Act says that it exists to help make available a "rapid" and "efficient" nationwide wire communication service), but that's different, the court said, from furthering actual statutory powers given to the Commission by the Act.

This is a big deal. It would appear, as of today, that ISPs are free to charge different prices based on the kind of content users want to access and to discriminate against certain kinds of content that they think take up too much bandwith -- peer-to-peer file sharing applications, for example. If we want mandatory net neutrality, it looks like we'll have to get it from Congress.

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