FCC probably can't police Comcast's BitTorrent throttling

On Friday, the Federal Communications Commission is planning to rule that Comcast violated Net neutrality rules. The problem is that the FCC's rules may be illegal.

Federal regulators are planning to meet on Friday and declare that Comcast violated Net neutrality principles when throttling BitTorrent traffic on its network. This would become the U.S. government's first Net neutrality-related ruling.

There's just one problem with the Federal Communications Commission's plans: They may not be quite, well, legal. In other words, the FCC may not actually have the authority to make its ruling stick.

In 2006, Congress rejected five different bills, backed by groups including Google, Amazon.com, Free Press, and Public Knowledge, that would have handed the FCC the power to police Net neutrality violations. Even though the Democrats have enjoyed a majority on Capitol Hill since last year, their leadership has shown zero interest in resuscitating those proposals.

It's true that the FCC adopted a set of principles in August 2005 saying "consumers are entitled to run applications and use services of their choice." But the principles also permit providers' "reasonable network management" and, confusingly, the FCC admitted on the day of their adoption that the guidelines "are not enforceable."

Friday's scheduled vote at the FCC stems from a request submitted in November by Free Press and its political allies, including some Yale, Harvard, and Stanford University law school faculty. They claim the FCC has the authority--under existing law--to "impose additional regulations" declaring Comcast's throttling to be illegal.

"Should Comcast finally be held accountable for its illegal practices, it will be the direct result of historic public involvement in this precedent-setting debate," said Marvin Ammori, general counsel of Free Press, which is funded in part by George Soros' Open Society Institute. "We look forward to seeing the order, and commend the FCC for conducting such a thorough investigation on behalf of Internet users everywhere."

FCC Chairman Kevin Martin, a Republican and occasionally the swing vote at the commission, is reported to be in favor of ruling against Comcast. It's no stretch to say the FCC's two Democrats, Michael Copps and Jonathan Adelstein, will join him. That leaves the remaining two Republican commissioners dissenting; commissioner Robert McDowell wrote an op-ed article published in the Washington Post on Monday that the Internet would "die of clogged arteries if network owners had to seek government permission before serving their customers by managing surges of information flow."

Lacking authority
Lack of legal authority hasn't stopped the FCC before. In 2005, a federal appeals court in Washington, D.C., ruled the agency did not have the authority to draft its so-called broadcast flag rule. Last week, a federal appeals court in Pennsylvania ruled the FCC's sanctions against CBS, which publishes CNET News, in the Janet Jackson Wardrobe Malfunction Incident amounted to an "arbitrary and capricious change of policy."

(Ironically, some of the same interest groups that sued the FCC over its claim to possess unfettered authority--even in the absence of congressional authorization--to enforce broadcast flag rules are now backing its theories of unfettered authority to police Net neutrality violations. Public Knowledge, for instance, claimed the FCC's use of so-called ancillary authority was "arbitrary and capricious" and "unlawful." Now it loves the idea.)

For its part, Comcast has been adamant that it would be unlawful for the FCC to hand down a cease-and-desist order related to BitTorrent. Its filings with the agency read like legal briefs, and amount to an unsubtle promise to file a lawsuit if the FCC proceeds. One, for instance, warns the FCC that any ruling "clearly would be subject to close and skeptical judicial review."

Comcast spokeswoman Sena Fitzmaurice on Monday declined to say whether her employer would sue, saying the text of any order has not been released and it's not clear what authority the FCC would invoke.

But she offered what amounts to a strong hint that a lawsuit is in the works: "Does that legal standard set precedent for the future about other legal decisions? If you let a statement saying they have ancillary authority potentially go unchallenged, does that have further implications?" (Comcast has hired Helgi Walker, a partner at the law firm of Wiley Rein and a former associate counsel to President Bush on FCC matters, to represent it before the commission.)

For Comcast, there are some risks to a court challenge. For now, at least, the vagueness of the FCC's Net neutrality principles can be useful to both sides: broadband providers and Free Press can point to them as supporting their respective positions. If a court declares them to be unlawful, the ruling could invite more specific regulations or explicit legislation from Congress.

Coming clean
In March, Comcast announced a kind of detente with BitTorrent, saying it would move toward a "capacity management technique that is protocol agnostic." Before the announcement, Comcast had responded to network congestion caused by BitTorrent users by sending forged TCP reset packets, which disrupted transfers and prevented some users from uploading files.

Not helping Comcast's credibility was its poker-faced denial in August 2007 of initial allegations that it was filtering BitTorrent traffic. A few months later, though, it turned out that Comcast really was throttling BitTorrent after all, and the company was forced to concede to the FCC that it blocks only "excessive" traffic. That also handed competitors like AT&T a perfect opening to say that they don't throttle peer-to-peer traffic at all.

But even if Comcast was being less than forthcoming, it doesn't mean the FCC has the power to fine it or issue a cease-and-desist order. The U.S. Supreme Court ruled in another FCC case that "an agency literally has no power to act... unless and until Congress confers power upon it." And that doesn't seem to have happened here.

If FCC enforcement against Comcast is illegal, why would Chairman Martin call Friday's meeting? Only he knows for certain, but one explanation is that if the FCC is embarrassed when slapped down by a federal appeals court two years hence, Martin will have long since departed to a lucrative partnership at a law firm or private equity firm. (This is a customary exit path for FCC chairmen: Newton Minow went to Sidley Austin; William Kennard went to the Carlyle Group; James Quello went to Wiley Rein, named for ex-chairman Richard Wiley, where equity partners made an average of $4.4 million in 2006.)

Friday's ruling may also end up as a cautionary tale for AT&T and Verizon, which as recently as last month seemed to be egging on the FCC to take action against their cable industry rival. But the same activists that have targeted Comcast before the FCC no doubt realize that AT&T's terms of service limit "peer-to-peer applications"; Verizon Wireless flatly prohibits them; Verizon's Fios service blocks incoming port 80. Another term for those network management practices is "Net neutrality violations."

 

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