Can the Feds enforce Net neutrality? Maybe not

WASHINGTON--Federal regulators may be probing Comcast's throttling of BitTorrent filesharing traffic, but can they actually take action, if they choose, against the company or any other broadband provider on Net neutrality grounds?

The answer may not be simple. And if the FCC and other regulators are really powerless--in other words, if they need Congress to enact new laws--it means that any threats to take action against Comcast, based on alleged violations of the law today, are merely empty ones.

That's the issue that former staffers and officials from the Federal Communications Commission and Federal Trade Commission took up at an event here on Thursday.

Both the FCC and the FTC have said in the past that they believe they already have ample authority to go after allegations of network operators blocking, degrading, or prioritizing Internet content. They've used that stance to argue against the need for new regulations sought by Google, Amazon.com, and a wide swath of consumer advocacy groups.

FCC Chairman Kevin Martin, for his part, recently reasserted the position, in the context of the Comcast investigation, that his agency can act against complaints of unreasonable network management. Comcast, however, has publicly disagreed, prompting some to speculate that the issue might ultimately get fought out in court--perhaps even the same court that unceremoniously told the FCC it did not have the authority to impose the so-called broadcast flag.

Panelists speaking at Thursday's event also cast doubts on how much power the FCC really has.

The reasons they gave lie in a labyrinthine legal history of how broadband is regulated. Several years ago, the FCC decided to take an increasingly hands-off approach to broadband, or "information," services--a move that the Supreme Court upheld in a 2005 decision. In doing so, the FCC consciously separated those services from telephone services, which have traditionally been heavily regulated and are required to abide by certain nondiscrimination rules.

Although the agency subsequently adopted four broadband "principles" that say consumers have the right to access the lawful content, applications, and services of their choosing and connect devices as they please, those aren't hard-and-fast rules that can be enforced, said Rebecca Arbogast, an analyst with Stifel Nicolaus.

Combine that with a series of recent court decisions that knocked the FCC for overstepping its boundaries--including the one over the broadcast flag--and "there's a very high risk that the commission would be not found to have the jurisdiction to go forward and do something that would constrain wireless companies, cable companies, phone companies from managing their traffic," said Arbogast, who previously served as chief of the telecommunications division of the FCC's International Bureau.

Kyle Dixon, a partner with the law firm Kamlet Shepherd who once served as a legal adviser to former FCC chairman Michael Powell, said the FCC may have the authority to write and enforce Net neutrality rules, but most likely only in a limited sense.

The FCC's Martin has indicated in the Comcast-BitTorrent debate, for instance, that he would like to force broadband operators to disclose more fully to their customers how they manage their networks. If the FCC decides to require ISPs to make such disclosures, such a move is arguably narrow enough to hold up in court because the agency could argue transparency is essential to helping the free market function, Dixon said. (Free-market economists would argue, on the other hand, that no government intervention is required at all.)

But, based on its previous reactions to some FCC rules, Dixon said an appeals court would most likely balk at the agency's attempts to do anything more dramatic--such as writing rules prohibiting ISPs from charging content companies for premium placement, as Net neutrality advocates support.

Former FCC Commissioner Harold Furchtgott-Roth, an economist, said it's difficult to predict whether the FCC could get away with writing stricter Net neutrality rules or enforcing its policy statement.

"I've always been amazed at the amazing arsenal of legal authority the commission has claimed to have," he said. "I don't always agree with it."

And what about other government agencies? The FTC, for its part, concluded in a report last summer that it already has sufficient authority to investigate alleged misconduct by Internet service providers through its shared antitrust oversight responsibilities with the Department of Justice and through existing consumer protection laws barring unfair and deceptive practices.

Dan Caprio, a private consultant who served as former FTC Commissioner Orson Swindle's chief of staff for more than six years, suggested the report speaks for itself: that the FTC can take action against allegedly anticompetitive or deceptive activities by ISPs.

The FTC may well have those powers, but it doesn't mean they'll actually be relevant to resolving complaints about alleged Net neutrality violations, said former FTC Commissioner Christine Varney.

For example, the FTC could theoretically require ISPs to disclose their network management practices more transparently as a result of a complaint. But, practically speaking, such disclosures may not be all that useful to the average consumer who just wants to surf the Web and doesn't understand the technical underpinnings, suggested Varney, who is now the head of the Internet practice at the law firm Hogan & Hartson. She also questioned the relevance of antitrust law in the Net neutrality debate.

"It's not clear to me there's anything inherently anticompetitive, from an antitrust standpoint, about the concept of prioritization," Varney said. "The tools are there...can they be used effectively? I don't know."

News.com's Declan McCullagh contributed to this report