Court: FCC has no right to dictate network practices
In a case framed by network neutrality issues, the U.S. Appeals Court in D.C. has ruled that the Federal Communications Commission has no authority to impose restrictions on network management practices.
While some observers have said that the decision may be a setback for the FCC’s ability to manage the National Broadband Policy that it is proposing, that will likely remain a matter of argument because the ruling is specific to this case and does not negate what authority the FCC has traditionally had.
Until 2008, Comcast employed a specific traffic management technique, which, once it was discovered by the public (late in 2007), inspired a consumer backlash, leading the FCC to sanction Comcast and ban the practice.
Comcast’s network was experiencing a certain threshold of congestion, and it would attempt to alleviate the situation by interrupting certain peer-to-peer (P2P) traffic. Specifically, Comcast was discovered to be interrupting BitTorrent traffic, typically video file transfers, some of the most bandwidth-intensive traffic on any network.
Comcast accomplished the interruption by generating packets that appeared to be from one of the two peers involved in a P2P session, a technique variously referred to as spoofing or packet forging. The MSO was taking advantage of a specific property of BitTorrent: if a download was interrupted, the application would keep trying to restore the session later.
Upon discovery in late 2007, Comcast was accused of discriminating specifically against P2P traffic. Detractors assailed the company for violating principles of network neutrality. Comcast countered that it was merely delaying the P2P sessions, and furthermore had (and has) both the responsibility and the right to manage traffic loads on its network.
The stances of both sides had foundations in doctrine. Two years earlier, the FCC had formulated an Internet Policy Statement , which warned Internet service providers (ISPs) against discriminating against any particular class of traffic, but also asserting the right of ISPs to manage their networks.
The FCC’s policy was generally considered to be legally non-binding, but following the Comcast-BitTorrent flare-up, the FCC decided that between its authority under the Communications Act of 1934 and having framed an Internet Policy, it had the authority to adjudicate questions about its Internet policy.
In 2008, prior to the FCC making a final decision of the situation, Comcast agreed to revise its network management practices – and did so. It also imposed a usage cap for each of its subscribers of 250 GB, an allowance so generous that only a few people who download/transfer scores of video files a month could possibly approach for the foreseeable future.
Subsequent to these changes made by Comcast, the FCC determined that Comcast’s former traffic management approach violated its network neutrality principles. The Commission ruled that Comcast had “significantly impeded consumers’ ability to access the content and use the applications of their choice.” The FCC issued a sanction against Comcast.
The sanction was a figurative slap on the wrist, but Comcast sued on the grounds that the FCC has no authority to dictate network management practices. It is this case that was just decided in Comcast’s favor. The Appeals Court ruling  explains that the FCC failed to make its case that the authority it does in fact have applies to this specific case.