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FCC authority, net neutrality and the Court of Appeals: What's next?

The Federal Communications Commission (FCC) and the telecom players it shepherds are in a state of disarray this month. Something has to happen to make it all better, but the plan of action isn't yet clear. The U.S. Court of Appeals for the District of Columbia ruled this month

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that FCC authority does not legally extend to regulating Internet service provider (ISP) traffic management decisions. That's a broad generalization of what happened in this tangled tale, however. (Read the related question-and-answer session about the court decision and the resulting FCC issues.)

The ruling sounds innocuous enough, but the decision has kicked up an amazing amount of dust and endless pontificating on other issues, including net neutrality (the principle that data packets on the Internet should be moved impartially, without regard to content, destination or source), the national broadband plan, and all manner of things never even mentioned in the 26-page court ruling.

What's going on here? The actual court decision refers specifically to a 2008 FCC ruling that punished Comcast for quietly blocking BitTorrent peer-to-peer traffic on its network, which the commission considered a violation of net neutrality guidelines. Looking at the bigger picture, the FCC reprimand was a blow to net neutrality enthusiasts. Yet following the Appeals Court ruling curbing the FCC's regulatory authority in one narrow case, no one knows what it will ultimately mean for net neutrality and the national broadband plan that the FCC is currently trying to implement so that affordable broadband is available to all. As it stands, FCC authority to regulate anything concerning broadband might now be in jeopardy. Even so, the FCC is pressing forward, determined to provide broadband and justice for all via a proposal it sent to Congress.

It doesn't bode well for the telecom industry, consumers or enterprises when regulatory rules of the road are unclear.

So now what? FCC Chairman Julius Genachowski is downplaying the meaning of the court's ruling, saying it doesn't change the FCC's ability to achieve its ultimate broadband goals. It's true that the concept of net neutrality isn't included in the national broadband plan, but if there were no nagging worries in the back of regulators' and lobbyists' brains, there wouldn't be such a kerfuffle of new organizations suddenly being formed to lobby for one side or the other.

Broadband Internet services background provides limited clarity
Let's turn to the background for clarity. There was a time when the Internet itself -- not VoIP, not video, not a pot of gold -- was the only thing at the end of a broadband connection. So in 2005, the FCC classified "broadband Internet" as an "information service" that also had a "telecommunications component" (the access portion of the service that actually transported people to the Internet).

The important thing to remember here is that "information services" (covered in Title I of the Communications Act of 1934, as amended) are lightly regulated by FCC authority, but Title II "telecommunications services" for common carriers and Title VI for cable communications are heavily regulated. Figuring out whether broadband should be unregulated or regulated is why positioning around the Court of Appeals decision will continue for quite some time. The outcome can also affect the freedom of the Internet.

Bottom line: It doesn't bode well for the telecom industry, consumers or enterprises when regulatory rules of the road are unclear. Facilities-based service providers don't want to sink capital into upgrading broadband infrastructure if they're not clear about the business climate and whether other companies can take advantage of their investment in an equitable way.

Taking it to the next level: We asked our own personal policy advisor, Tom Nolle, what options the FCC has to clarify its role in broadband regulation. He gave us a rundown of the three main possibilities, picked a favorite and discussed what would have to happen to make it so in this question and answer session.

Email your thoughts on this issue to: Kate Gerwig, Executive Editor.

This was first published in April 2010

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