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FCC's net neutrality plans in turmoil


By David Lieberman, USA TODAY

The Federal Communications Commission's right to regulate the delivery of high-speed Internet service, its speed and consumer access to it was thrown in doubt  Tuesday by a federal court ruling. The U.S. Court of Appeals for the District of Columbia Circuit said the FCC overstepped its authority in 2008 when regulators barred Comcast from interfering with Internet traffic from peer-to-peer, video-sharing services.

The cable company said the sites were hogging scarce Internet bandwidth, which slowed all Web traffic. The FCC said it wanted to prevent Comcast from using its clout as a broadband service provider to favor some services over others.

But the court unanimously agreed with Comcast that the FCC doesn't have an explicit right to regulate broadband service, and can't infer it from its power to set rules for cable TV and phone services.

The decision means that the FCC's efforts to close the digital divide and promote truthful billing, honest reporting of broadband speeds, and consumer privacy "are all subject to litigation," says Andrew Schwartzman of the Media Access Project, a public interest law firm. "It's a very big deal."

The court's ruling also raises questions about the FCC's power to adopt key provisions of its new National Broadband Plan, which aims to make high-speed Internet service a staple of everyday life.

FCC spokeswoman Jen Howard says the ruling does not "close the door to other methods" to ensure that Web services are treated equally — a policy known as "net neutrality."

While the agency didn't say what it might do to reassert its authority over broadband, analysts say FCC Chairman Julius Genachowski may be tempted to reclassify the Internet as a regulated service similar to telephones. In 2002, the FCC deemed the Web an unregulated information service.

Such a change would turn Comcast's win into "a Pyrrhic victory" costing it more than it gained, says Stifel Nicolaus analyst Rebecca Arbogast.

Genachowski also could try to make the cable giant adopt certain broadband policies including net neutrality to win FCC approval for its deal to buy a controlling stake in NBC Universal.

Others say that Congress will have to determine how broadband should be regulated.

"This has been a ticking time bomb" since the 1996 Telecommunications Act largely deregulated cable, says Paul Trane, principal adviser at consulting company Telecommunications Insight Group. Lawmakers are already framing the debate.

Sen. John Kerry, D-Mass., says that "without oversight, market giants would be free to do as they wish, even if their actions hindered the free flow of information, treated consumers unfairly or discriminated against content creators."

But Sen. Orrin Hatch, R-Utah, says the ruling is "critical to those who've been fighting to keep the ever-expanding hand of government off the Internet."

Comcast says it "remains committed to the FCC's existing open Internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption," says spokeswoman Sena Fitzmaurice.



The government affairs practice of Government Insight Group (GIG) was formed in 2005 when Paul Trane brought together personnel with over 30 years of experience to form what one publication called a “one stop shopping for lobbying and government affairs.”



Kerbey Harrington attorneys are industry leaders in telecommunications, regulatory policy, licensing and permitting, intellectual property, government relations, municipal law and real estate.



Telecommunications Insight Group (TIG), a telecommunications consulting firm, was founded in Massachusetts in 1997. TIG's success is based upon a simple formula: Ascertain the facts. Provide consulting advice. Implement the advice.