Is Net neutrality dead? (FAQ)

A federal appeals court decision against the Federal Communications Commission has left many people wondering if the open Internet's days are numbered.

On Tuesday, a three-judge panel in a federal appeals court in Washington, D.C. unanimously tossed out an FCC cease-and-desist order against cable giant Comcast. The FCC said in 2008 that Comcast had illegally slowed its customers' Bit Torrent traffic. Comcast, which changed its practices voluntarily before the FCC took action, claimed it was simply managing its network. The cable giant appealed the FCC's order to clear its name and set the record straight.

The recent court ruling has indeed cleared Comcast's name. But some consumer advocates say the consequence of this ruling is that it has also stripped the FCC of its power to enforce basic Internet openness principles. These advocates are calling for new laws and regulations that will protect the Net.

But the ruling, which is still being examined by lawyers on both sides of the debate, may not cause as much damage as some people fear. To get the low-down on how this court decision will affect the FCC, broadband Internet service providers, and consumers, check out this FAQ.

Let's start with the basics. What is Net neutrality?
There is no clear definition of the term Net neutrality, but in general it refers to the concept that Internet users should have unfettered access to content and services. In other words, service providers should not be allowed to either impede or favor access to particular sites or applications, the theory goes.

There have been several efforts to create laws to protect Net neutrality, but they've all failed. Instead the FCC, has tried to guide the Internet community by coming up with guidelines. In 2005, under then FCC chairman Michael Powell, the agency adopted four Open Internet Principles (PDF), which can be summarized this way: network operators cannot prevent users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

Kevin Martin used these principles as the basis for the FCC's action against Comcast, which had taken measures to slow BitTorrent traffic on its network.

So what did the court actually say in its ruling?
The court on Tuesday ruled that the FCC "has failed to tie its assertion" of regulatory authority to an actual law enacted by Congress, the agency does not have the power to regulate an Internet provider's network management practices, wrote Judge David Tatel of the U.S. Court of Appeals for the D.C. Circuit.

But the ruling did not strip the FCC of all authority. It simply said the FCC didn't have any right to dictate how a service provider manages its network.

"We must decide whether the Federal Communications Commission has authority to regulate an Internet service provider's network management practices," Tatel wrote in his 36-page opinion. "The commission may exercise this 'ancillary' authority only if it demonstrates that its action--here barring Comcast from interfering with its customers' use of peer-to-peer networking applications--is 'reasonably ancillary to the...effective performance of its statutorily mandated responsibilities.'"

The FCC is currently working on drafting Net neutrality regulation. How will the court ruling affect those efforts?
In September, the FCC's current Chairman Julius Genachowski proposed making the four Open Internet principles plus two additional principles official regulation. The commission opened the issue for public comments and that comment period ended earlier this year.The agency is currently in the process of writing that regulation, which will be presented and voted on by the five-member commission at some point.

Judging from its official comments on Tuesday, it looks like the FCC is moving forward with its plans to make these rules official regulation.

"The FCC is firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans. It will rest these policies--all of which will be designed to foster innovation and investment while protecting and empowering consumers--on a solid legal foundation," the agency said in a statement.

But the FCC emphasized that its approach to ensuring an open Internet differs from the previous FCC under Martin.

"Today's court decision invalidated the prior commission's approach to preserving an open Internet. But the court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end."

Will the FCC appeal the court's decision?
The FCC has made no mention of appealing the decision, and my guess is that it won't. The court decided unanimously. Genachowski seemed to recognize this action was on shaky legal ground, which is why he likely proposed making the principles official regulation. What's more when the FCC voted to take action against Comcast, the commission was split. Three commissioners voted for it and two commissioners voted against it.

FCC Commissioner Robert McDowell, who was one of the two commissioners on the FCC in 2008 opposing the order against Comcast said Tuesday that he was pleased with the court's decision that "Title I of the Communications Act provides the FCC with no authority to regulate the network management practices of an Internet service provider."

But won't the new official regulation be meaningless, because the FCC has no authority to regulate the Net? Will Congress have to pass legislation to make the FCC's role clearer?
Consumer advocacy groups, such as Public Knowledge, say that the ruling Tuesday provides consumers with no protections in the law. This may be a bit of an overstatement. The court didn't strip the FCC of all its authority, but the ruling does call into question how far the FCC may go in certain instances. Two things could happen going forward to clarify the FCC's authority and bolster the agency's authority. The agency can change the classification of broadband Internet services from Title I information services to Title II telecommunications services, or Congress could enact a new law that specifically addresses Net neutrality.

What would reclassifying broadband services mean?
If broadband is reclassified a Title II telecommunications service, the FCC could have authority to regulate prices and competitive access under what's known as common carrier rules on these networks.

Public Knowledge argues that the FCC should bring "Internet access service back under some common carrier regulation similar to that used for decades." They argue that this would prevent unjust and unreasonable discrimination on the network.

How likely is it that broadband will be reclassified a Title II telecommunications service?
I think it's unlikely the FCC will reclassify broadband. For one, Genachowski has said repeatedly that he does not want to "regulate" the Internet. He believes an open Internet is the best way to spur innovation and improve services on the Net. His approach so far indicates he isn't looking to enact heavy-handed regulation. Instead, he seems to be working with industry to provide incentives to keep the Net open and to encourage competition.

The other reason that reclassification is unlikely is because ISPs would fight it tooth and nail, and there is already legal precedent that would make a legal challenge certain. In 2005, the U.S. Supreme Court ruled in the Brand X case that cable modem service was a Title I information service and not a Title II telecommunications service, which meant that it was not subject to FCC regulation. Later that year, the FCC voted to reclassify DSL as an information service to keep it consistent with cable services. It's unlikely the FCC would go back and change these classifications without some new law from Congress.

Is it likely that Congress will take action to pass a Net neutrality law or some law reclassifying Internet traffic?
I think it's unlikely that Congress will do anything anytime soon. For one, midterm elections are coming up. So nothing is likely to happen until that is over.

Looking out even further, I still think it's unlikely that Congress will pass a Net neutrality law. In 2006, Congress rejected five 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 2007, the political leadership has shown little interest in resuscitating those proposals.

As for reclassification, Congress is also unlikely to pick this up. In an e-mail to my colleague Declan McCullagh earlier on Tuesday, Sam Feder, a former FCC general counsel who's now a partner at the Jenner and Block law firm in Washington, seems to agree.

"The court decision is not broad enough to have a good shot at overturning it in the Supreme Court, and for the same reason, it is unlikely to prod Congress into enacting legislation," he said in an e-mail. "Reclassifying broadband (as a common carrier)--a path advocated by some public interest groups--might provide a more sound legal basis for moving forward, but the politics of that move are awful. The ISPs would fight tooth and nail to avoid reclassification, and the public interest groups are unlikely to be happy unless reclassification is accompanied by significant regulation. In the end, that move makes nobody happy."

What are Internet service providers, such as AT&T and Comcast, expected to do? They got what they wanted, so will they be monkeying with everyone's traffic?
The major broadband service providers say they plan to continue to adhere to the Open Internet principles. So the short answer is that it's highly unlikely they will slow customers' traffic or degrade service from a potential competitor.

These companies recognize that the FCC is pushing forward with making official Net neutrality regulation. And they know that there are at least three votes on the FCC in favor of such regulation. The last thing ISPs want is to push Congress into passing a law that would increase regulation.

This means that the ISPs are likely to work with the FCC in developing new Net neutrality regulation that they can live with. AT&T, Verizon Communications, Comcast, and others say they plan to continue to support the FCC's Open Internet principles, regardless of Tuesday's ruling.

"AT&T supports an open Internet," Jim Cicconi, AT&T senior executive vice president of legislative affairs, said in a statement. "That is what our customers count on us to deliver, and we will not disappoint them. Moreover, the FCC's Open Internet Principles work. In the nearly five years since these principles were put in place, the FCC has encountered only one serious complaint, and even in that case, which was before the court today, the company took steps to address the complaint long before the FCC ruled. "

Even Comcast said that it plans to continue to adhere to the Open Internet principles.

"Our primary goal was always to clear our name and reputation," Sena Fitzmaurice, vice president of government communications at Comcast, said in a statement. "We have always been focused on serving our customers and delivering the quality open-Internet experience consumers want. Comcast 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 and preserve an open and vibrant Internet."

The FCC has just come out with its comprehensive 10-year National Broadband Plan, which is a blueprint for getting affordable broadband access to every American. Will this court ruling affect those plans?
Some consumer advocates argue that the decision will hamper the FCC's ability to get universal broadband to all Americans.

But I disagree. I don't think that this ruling changes anything in terms of the National Broadband Plan. The plan does not give the FCC authority to mandate broadband deployment. It's simply an outline for policy makers and legislators. Much of the plan is devoted to finding ways in which public policy can encourage investment from private industry. For example, this ruling does not affect the FCC's ability to put more wireless spectrum in the market that will be auctioned to build new networks or bolster existing ones.

So what does all of this mean for broadband consumers?
Right now, it means very little. Consumers are not likely to see any change in their service as a result of this court ruling. They will be able to access the same services and Web sites they have always been able to access. They will likely continue to see new services being added to the Net. And they will not likely face any degradation in service.

CNET's Declan McCullagh contributed to this report.