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D.C. Appeals Court Vacates FCC's BitTorrent Decision

A D.C. Appeals court has vacated the FCC's BitTorrent decision. The court concluded that the commission did not sufficiently establish the ancillary authority over Comcast's network management practices.

The decision could prompt the commission to reclassify Internet service under phone service regulations to establish the authority to enforce Internet openness as it prepares to expand and codify its network neutrality guidelines.

"We are gratified by the Court's decision today to vacate the previous FCC's order," said Comcast in a statement.  "Our primary goal was always to clear our name and reputation," said the company, although the court did not rule on the practice at issue, but only on the FCC's jurisdiction over network management practices in general.

The company also said it supported the FCC's existing openness principles. "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 National Cable & Telecommunications Association said the ruling was right, but would not affect the FCC's ability to protect Internet openness.

"The Court correctly ruled that a specific order by the previous FCC was wrong. We cannot state strongly enough that this decision will change nothing about the cable industry's longstanding commitment to provide consumers the best possible broadband experience," the cable organization said in a statement. "Nor does the ruling alter the government's current ability to protect consumers. We continue to embrace a free and open Internet as the right policy and will continue to work with the Commission and other policymakers and stakeholders to find a sound way of preserving that goal."

The D.C. court wrote the following in support of its ruling: "It is true that 'Congress gave the [commission] broad and adaptable jurisdiction so that it can keep pace with rapidly evolving communications technologies. It is also true that 'the Internet is such a technology,' indeed, 'arguably the most important innovation in communications in a generation,' yet notwithstanding the ˜difficult regulatory problem of rapid technological change' posed by the communications industry, ˜the allowance of wide latitude in the exercise of delegated powers is not the equivalent of untrammeled freedom to regulate activities over which the statute fails to confer, commission authority.' Because the commission has failed to tie its assertion of ancillary authority over Comcast's Internet service to any ˜statutorily mandated responsibility,' we grant the petition for review and vacate the Order."

The FCC had argued 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.

Comcast had countered that the FCC's BitTorrent decision was hardly modest (as the FCC claims), was done without the requisite notice, and was unenforceable. Comcast had challenged the decision on the grounds that the FCC had not justified its jurisdiction over network management practices, that the decision was procedurally flawed because it circumvented the rulemaking process and was arbitrary and capricious.

Comcast had the D.C. court at jurisdiction. "We begin-and end-with Comcast's jurisdictional challenge," said the court, which did not have to decide the other issues.

The court pointed out that the FCC was not asserting that Congress had given it express authority to regulate network management, but instead on its "ancillary authority" derived from the broad Communications Act language that: "The Commission may perform any and all acts, make such rules and regulations, and issue such orders, not inconsistent with this chapter, as may be necessary in the execution of its functions."

In what may be some comfort to the commission, the D.C. Court did say the FCC could impose "some" kinds of restrictions on Internet Service Providers--citing the Supreme Court's Brand X decision in which the high court talked of the FCC's ancillary authority--but it did say the FCC had made too great a leap from that to authority over "all aspects of cable."

The court said the FCC must defend its use of ancillary authority on a case-by-case basis, and in this case it had failed to do so.

An FCC spokesman said the commission was studying the decision.