The DC Circuit Court of Appeals threw a major wrench in the Federal Communications Commission's plans to implement network neutrality regulations today when it ruled that the FCC had no authority to regulate ISPs' network management practices.
First, some quick background: Internet neutrality refers to the principle that ISPs should not be allowed to block or degrade Internet traffic from their competitors in order to speed up their own.
The push for net neutrality began in 2005, when incumbent telecom carriers successfully lobbied the FCC to repeal common carrier rules that required the incumbents to allow ISPs such as EarthLink to buy space on their broadband networks at discount rates.
Both Web companies such as Google and consumer groups such as Free Press feared that this would lead to a small handful of large ISPs consolidating power over Internet access, thus giving them the power to slow or degrade competitors' traffic.
The FCC began making headway on net neutrality last year when Chairman Julius Genachowski proposed making two new rules that would bar carriers from blocking or degrading lawful Web traffic and that would force carriers to be more open about their traffic management practices.
Any hope of ever enforcing those rules came to a screeching halt Tuesday, however, when the D.C. appeals court said that the FCC did not have the authority to regulate ISP network management under its current legal framework.
The big question for the FCC is where to go from here. In essence, the commission has two options -- it can either wait on Congress to enact net neutrality legislation or it can reclassify broadband companies as common carriers.
The former strategy is being pressed by net neutrality advocate Dan Gillmor, the director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism. In a blog post responding to Tuesday's court decision, Gillmor argued that Congress needed to act quickly and decisively to grant the FCC power to regulate service providers' network management practices.
"Network neutrality has always been the kind of issue requiring serious engagement from the lawmakers," he wrote. "As they do so often, they've ducked and dodged, leaving it to regulators to make vital policy decisions."
The downside of the legislative strategy is obvious, however. As anyone who watched the healthcare legislation unfold over the past year can tell you, congressional bill making is often a long, drawn-out process that is subject to fierce lobbying from special interests. Any net neutrality advocate hoping for Congress to act in a timely and crisp manner on the issue could come away sorely disappointed.
That leaves unilateral action by the FCC to label broadband providers as common carriers as the only remaining option. Currently, the FCC classifies ISPs as a Title I information services that are not subject to FCC regulations over issues such as rate setting and universal service obligations. However, the FCC could decide to bring ISPs under the Title II regulations that are currently used for telephone services and that would treat the ISPs more like public utilities.
This approach has been promoted by net neutrality advocates such as the Free Press, which has encouraged the commission to place ISPs under the Title II framework.
"If the FCC goes back and reverses those original 2002 and 2005 [Title I] classification orders, their authority to act in the broadband market becomes more firmly grounded within the law," says S. Derek Turner, the research director for Free Press, who says that the FCC needs to have a sound legal basis for "implementing the national broadband plan and protecting consumers."
While this option seems feasible, there are some potential downsides here as well. First of all, no one wants to have ISPs regulated exactly like common carriers. This means that the FCC would have to start a rule-making process to decide which Title II common carrier requirements that ISPs would not have to comply with. According to Northwestern University law professor James Speta, this could turn into a heavily lobbied and overly drawn-out process.
"The FCC does have authority to forbear from such regulatory requirements, but that would require a specific, highly contested… proceeding to do so," he says. "Additionally, if Internet services were Title II services, presumably the states would inherit back a lot of regulatory authority over them, which the FCC has really never favoured."
In other words, the FCC can still pursue net neutrality rules if it wants to, but it no longer has any easy way forward.