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Federal Appeals Court Rules Against FCC on Net Neutrality

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Network-Neutrality[11]A federal appeals court ruled unanimously today that the Federal Communications  Commission (FCC) does not have the authority to require broadband providers to treat all Internet traffic moving through their networks equally.

The three-judge panel of the DC Court of Appeals ruling is a major blow to the FCC’s National Broadband plan, and is big win for Comcast Corporation, the largest cable company in the United States.  “The commission has failed to tie its assertion of ancillary authority over Comcast’s Internet service to any statutorily mandated responsibility,” the court said in a 36-page opinion.

The court ruling says that “The [FCC] also relies on various provisions of the Communications Act that do create such responsibilities, but for a variety of substantive and procedural reasons those provisions cannot support its exercise of ancillary authority over Comcast’s network management practices.”

The court overturned the FCC’s procedure that levied an August 2008 cease-and-desist order against Comcast for slowing BitTorrent transfers over their broadband networks.  Though Comcast complied with the FCC’s order, it filed three objections, contending that the Commission’s procedure circumvented  the Administrative Procedure Act, violated the Due Process clause and were arbitrary and capricious.  The court’s ruling “begins  – and ends – with Comcast’s jurisdictional challenge.”

In its ruling, the court said that significant technological advances in television and data transmission have reduced the FCC’s authority to regulate cable television.  The ruling writes that the FCC fails the two-part test for jurisdictional authority outlined in American Library Association v. FCC, “(1) the [FCC]’s general jurisdictional grant under Title 1 [of the Communications Act] covers the regulated subject and (2) the regulations are reasonable ancillary to the Commission’s effective performance of its statutorily mandated responsibilities.”

While the FCC’s authority to regulate cable providers was established in cases like United States v. Southwest Cable Co., at the time, cable providers simply used large antennae to capture broadcast television and re-transmit it via cable to provide better reception and serve remote areas without local broadcast affiliates.  The court’s opinion says that this ruling only gives the FCC “ancillary” authority to regulate broadcast television re-transmitted over cable, not the authority to regulate data service.

This decision has serious implications the sweeping national broadband plan released by the FCC in March, and means that the FCC needs new legislation to grant it the authority to regulate broadband.  This ruling could thwart efforts to expand broadband coverage, including a proposal to expand broadband by tapping the federal fund that subsidizes telephone service in poor and rural communities.

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