FCC Defends Internet Regulation Authority

FCC asserted its authority to regulate the Internet under its ancillary authority over “all interstate and foreign communication by wire or radio.”

By John Eggerton -- Broadcasting & Cable, 9/24/2009 1:58:05 PM

The FCC this week told a D.C. federal appeals court that it had the authority to take action against Comcast for "covertly interfering" with BitTorrent peer-to-peer traffic in violation of Internet openness principles, and doing so in an adjudicatory proceeding rather than a rulemaking.
 
That argument was made in a brief to the court on the same day FCC Chairman Julius Genachowski announced he proposed codifying and expanding those principles.
 
The commission also more broadly asserted its authority to regulate the Internet. "Congress created the FCC for cases such as this one," it told the court. "Congress gave the agency broad and adaptable jurisdiction so that it can keep pace with rapidly evolving communications technologies. The Internet is such a technology."
 
Comcast pulled the plug on the practice, but also challenged the legal basis and authority for the FCC to conclude that it was using unreasonable network management techniques and was not giving customers sufficient notice about how it was managing its network.
 
In the brief, asking the court to deny Comcast's petiton for review, the FCC asserted its authority to regulate the Internet, at least under its ancillary authority over “all interstate and foreign communication by wire or radio.”
 
The commission argued that it was exercising that ancillary authority because Comcast's practice was both a risk to the "open nature of the Internet" and posed an "anticompetitive risk."
 
The latter risk was because peer-to-peer was a video distribution system, and blocking it could be an effort to impede a competitor that could be a governor on what it said were rising cable prices.
 
The FCC also said it had the authority to regulate cable modem service "by virtue of its regulatory authority over broadcast radio and television, cable services, and telephony," likening the advent of the net to the coming of cable.
 
"The economics of broadcasting and the local origination of programming, matters of longstanding FCC regulation, are directly affected by Internet network practices in much the same as they were by the advent of cable television. Likewise, as a potential competitor to cable television service, video distribution via the Internet may exert downward pressure on cable prices, a matter the Commission has long regulated.
 
The commission defended its adjudication procedure over what would have been a more generally applicable rulemaking as an effort to tread lightly in the new area of traffic management. It said the call on which way to go was within its discretion and Comcast had not shown that it had abused that discretion.
 
The FCC pointed out that it imposed no fine, but simply "took steps merely to ensure that Comcast in fact followed through on its commitment to cease the contested practice."