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Implications of Comcast Decision on National Broadband Plan Implementation

April 7th, 2010 by Austin Schlick - General Counsel

Much already has been written about the D.C. Circuit’s decision yesterday in the so-called Comcast/BitTorrent case (Comcast Corp. v. FCC). Some important facts are at risk of being lost in the discussion.

The Comcast/BitTorrent case began in 2007, when Internet users discovered that Comcast was secretly interfering with its customers’ lawful use of BitTorrent and other peer-to-peer applications. After first denying that the practice existed, Comcast eventually agreed to end it. In 2008, the FCC issued an order finding Comcast in violation of federal Internet policy as stated in various provisions of the Communications Act and prior Commission decisions.

In yesterday’s ruling, the U.S. Court of Appeals for the District of Columbia Circuit held that the Commission’s 2008 order lacked a sufficient statutory basis, because it did not identify “any express statutory delegation of authority” for putting an end to Comcast’s undisclosed interference with its own customers’ communications. That’s an important ruling: It undermines the legal approach the FCC adopted in 2005 to fulfill its statutory duty of being the cop-on-the-beat for 21st Century communications networks.

Does the FCC still have a mission in the Internet area? Absolutely. The nation’s broadband networks represent the indispensable infrastructure for American competitiveness and prospects for future job creation, economic growth, and innovation. The Court did not adopt the view that the Commission lacks authority to protect the openness of the Internet. Furthermore, in 2009, Congress directed the agency to develop a plan to ensure that every American has access to broadband. Just three weeks ago, the Commission released its National Broadband Plan. The Plan contains more than 200 recommendations for bringing high-speed service to underserved individuals and communities, and using broadband to promote American competitiveness, education, healthcare, public safety, and civic participation.

The Comcast/BitTorrent opinion has no effect at all on most of the Plan. Many of the recommendations for the FCC itself involve matters over which the Commission has an “express statutory delegation of authority.” These include critical projects such as making spectrum available for broadband uses, improving the efficiency of wireless systems, bolstering the use of broadband in schools, improving coordination with Native American governments to promote broadband, collecting better broadband data, unleashing competition and innovation in smart video devices, and developing common standards for public safety networks.

At the same time, yesterday’s decision may affect a significant number of important Plan recommendations.  Among them are recommendations aimed at accelerating broadband access and adoption in rural America; connecting low-income Americans, Native American communities, and Americans with disabilities; supporting robust use of broadband by small businesses to drive productivity, growth and ongoing innovation; lowering barriers that hinder broadband deployment; strengthening public safety communications; cybersecurity; consumer protection, including transparency and disclosure; and consumer privacy. The Commission must have a sound legal basis for implementing each of these recommendations. We are assessing the implications of yesterday’s decision for each one, to ensure that the Commission has adequate authority to execute the mission laid out in the Plan.

21 Responses to “Implications of Comcast Decision on National Broadband Plan Implementation”

  1. Amber McClanahan says:

    I don't understand how Comcast or any other communications provider can get away with limiting any kind of traffic to or from a paying customer's computer. I pay for 15mbps every month, all month long. The way I see it if I choose to be constantly using all 15mbps 24/7 regardless of on what, I should be able to, as should everyone else on the network because that's what we're all paying to do. If as Comcast claimed their network couldn't handle bittorrent traffic even though that traffic would not have been able to exceed their customer's speed package then they either need to stop charging us for what they apparently cannot give us, or they need to strengthen their network.

  2. Big Dan says:

    As much as I'd like to see it differently I see the supreme courts decision as another pro-business anti-consumer slap in the face. If the internet access isn't already an necessity in every day life it is quickly becoming one and should be regulated like one.

    I have no beef with any ISP limiting illegal (copyrighted) downloads but do have a big problem with them limiting my access to freely distributable material like say a Linux distrobution via Bit Torrent. Bit Torrent isn't a big deal to most people so I'll leave the rest of that argument alone.

    I do think this ruling sets a dangerous precedent and look for ISPs to start screwing around with YouTube, Hulu, and other bandwidth intensive but legitimate traffic in the near future.

  3. GWG says:

    I agree that the Court's decision leaves the FCC with jurisdiction over broadband, albeit more limited than it previously asserted. That said, 706 and 230 were pretty weak arguments for statutory hooks, especially in light of the long tradition and assertions made by the FCC under 201 and 202 over common carriers's practices. Granted, the previous Commission did not rely on those provisions as it should have, foreclosing those arguments in the appeal by Comcast, but the FCC should now pursue those far more solid bases on which to assert network management rules over broadband providers. Under section 201, the Commission has often regulated the "practices" of common carriers finding such things as call blocking and inaccurate disclosures to be unreasonable practices. Additionally, section 202 clearly prevents discrimination. Use these as your statutory hooks and my guess is under Title I or Title II, a court would be hard pressed to not permit the FCC to regulate the practices it seeks to regulate in its Open Internet proceeding.

  4. arclight says:

    Time to separate issues. The issue of high-bandwidth usage by a few users, the issue of using peer-to-peer software, the issue of copyright violation, and the issue of unrestricted access to Internet services are four separate issues that should be dealt with separately.

    1. High-bandwidth usage should be covered by contract. Make terms and conditions understandable to the end user. Hold users and companies accountable for honoring contracts.

    2. Use of peer-to-peer software should not in itself be an issue. It's an application.

    3. Copyright violation is what most of this is really about, and should be dealt with separately. The "fair use" provisions that we have traditionally enjoyed should be preserved; pirates should be dealt with harshly, but purchasing a copyrighted product should not automatically force a person to pay per-usage fees (unless the person clearly understands up front that that's the way the product is offered). In any case, it has nothing to do with Internet service per se.

    4. Unrestricted access to Internet sites is a fundamental "fairness" issue. An Internet service provider must not have the ability to deny access to or deliberately slow-walk service from a competing site based on content. The ISP SHOULD be allowed to make faster service available to entities that pay for faster delivery; however, they MUST be FORCED to charge their OWN content providers the same rates.

    What this really points to is the absolute need to rigorously divorce content from transport. Perhaps that's where the real policy work,and the real court consideration, and the real legislative effort needs to go: how do we set up a suitable funding mechanism to allow transport to be provided on an equal access basis while providing transport providers a suitable ROI so they can be attractive to investors?

  5. Brett Glass says:

    The decision was not handed down by the Supreme Court; it was handed down by the Court of Appeals for the DC Circuit. And it wasn't "pro-business" or "anti-consumer." It also did not set a precedent; such rulings have been handed down many times before. If anything, the decision was pro-democracy. It simply said that the FCC, like any federal agency, cannot exercise powers that our elected representatives in Congress Congress did not give it. Regardless of what you think about regulation of the Internet, this basic oversight is a good thing. It maintains the rule of law and ensures that government is accountable to the people.

    That being said, it's important for the FCC to consider carefully where to go from here. A desperate move to place all ISPs under Title II of the Telecommunications Act -- a law designed to regulate large, monopoly telephone companies -- would be very bad for the country and for consumers. No small Internet service provider could, realistically, cope with this sort of micromanagement and regulation -- yes, the Commission could forebear from some of it but there are many, many sections from which it CANNOT legally forebear. Telephone companies have buildings full of lawyers to deal with that regulation. But small competitors? They'd be strangled just by the legal fees. And then there is the problem that some of the regulation in Title II devolves to the states; suddenly, state regulatory commissions would be involved. So, here would come state politics and a patchwork of regulations.... Who would invest in broadband providers? I must admit, even I'd be hesitant -- and I own the company.

    Instead, what the Commission should do is act within the scope of its statutorily granted powers and in concert with other agencies, such as the FTC and DoJ, which have powers that are relevant to consumer protection and antitrust. Any other course will be not only fraught with lawsuits and endless, painful political wrangling, but very bad for consumers and for competition. For more, see my recommendations (which anticipated the Court's decision) at http://www.brettglass.com/nprmcomment.pdf (also filed in GN Docket 09-191).

  6. Guest says:

    What in the existing universal service provisions of the Act would not permit application to broadband? The statute addresses deployment of advanced technologies to rural areas. The previous administration's interpretation of those words should not preclude reevaluation by the current administration. I think the existing Communications Act's provisions on USF constitute a fairly concrete express statutory delegation of authority.

  7. Glenn Gutierrez says:

    In reply to GWG: The statutory hooks you referenced would be inapplicable under the ruling. Title I is exactly what has been stricken by the latest decision. This judgment is broad elimination of ancillary jurisdiction over the internet in Title I, so that hook wouldn't apply. Furthermore, placing jurisdiction back in Title II would require reclassification and that sets up a whole new world of challenges and consequences (beyond the scope of this comment) which may be another barrier to the openness of the internet.

  8. Guest says:

    At the end of the day, Congress needs to act. The Communications Act is outdated and needs to reflect reality in the age of convergence of devices and platforms. The Commission should file an addendum to its National Broadband Report to Congress requesting that Congress rewrite the Communications Act to take a layered approach rather than silo the various delivery mechanisms. All modern communications is data and should be regulated equally without regard to the content the data carries or the physical medium that carries the signal. Even analog phone systems are mostly digital these days. The same technology used by Comcast and its customers to view this web page is the same technology used to transmit voice calls over the Comcast and various telephone networks.

  9. Guest says:

    One thing that is not being considered is the method that Comcast used to slow the peer-to-peer traffic. Comcast was injecting reset (RST) packets into the flow of data which immediately halts the transfer as if the source or destination had 'hung up to phone'. In the always useful car analogy it would be the same as traffic officers using spike strips to 'slow' the cars. The usage of RST packets in this way is a misuse of the TCP/IP protocol that the Internet is based on, and is essentially a denial of service attack, which should be covered by something like the National Information Infrastructure Protection Act. If the appeals judge was more technically versed, this appeal could easily have gone against Comcast, but we are instead left with the decisions of Ted Stevens, "the Internet is a bunch of pipes", types

  10. MAINEiac-a man from Maine says:

    response to Brett:

    The 1996 Telecommunications Act allows small broadband "competitors" to "Cherry Pick" the assets of the larger ILEC companies without any of the real cost and overhead of providing of service. The rules were meant to stimulate voice competition, not broadband. They are outdated and need to be rewritten to apply to all broadband providers. I totally agree with the "guest" of April 9, 2010....

    My opinion is current regulations provide a free for all atmosphere and prevent ILEC companies from investing in the future of their networks. Networks that have gotten us to where we are today... ILEC companies are in the business of providing service. The exact same services most "competitors" provide except they use leased ILEC facilities without the overhead. There are very few physical networks on the pole line.

    Unregulated providers have business models that target 10 customers per pole and not the 10 poles per customer ILEC companies are forced by regulation to serve. Why because they can... This is not competition!

    CATV companies are ILEC's biggest unregulated competitor who provide service using their own physical network. CATV networks are unregulated and very robust. CATV companies do not have to lease their network by law to "competitors" and will not serve rural America.... They are allowed to keep any network they build for themselves and are making major investments in technology. Personally, I think this is a great business strategy and should apply to all broadband providers.

    If "competitors" are allowed to "Cherry Pick" the high revenue areas without regulation, what company large or small will make the necessary network investments for the future.... especially if by law they have to give it away.... give it away at wholesale prices set by the government?

    ILEC companies, the companies with all of the lawyers you speak of are no different. If there is no money in it... why do it? I agree who would invest? There is a tremendous amount of physical infrastructure that provides Universal Service to rural America that makes no money... areas "competitors" can choose not to serve because of the cost.

    Eventually enough "Cherry Picking" will drop the profit margins enough, more and more ILEC companies will get out of the business just like Verizon is doing today. A couple of the Verizon spin off companies have already gone bankrupt. A pretty good sign the money aspect of providing reliable quality affordable service is in trouble…What next? Government run Telco...

    I would like to see a return on investment type regulation for all providers large or small who invest in physical networks. No money invested... No money earned.... even regulation for all providers

    This would help stimulate 21 century network growth and provide end user competition to the last home on the "Last Mile" network. Put TRUE competition on the poles where it should be....

  11. Guest says:

    Just wait till ACTA hits the stands.
    Are you ready to be banned from the internet?

  12. William Burns says:

    I find it hard to believe that the FCC (Federal Communications Commission) is not in a position to regulate communications. Broadband (communications) should definitely fall under their jurisdiction since it is quickly becoming a requirement in the digital age, as well as the constant and blatant abuses by the broadband communications companies of customers and the entire network as a whole.

    Time for the FCC to regulate communication in the digital age, and not be held down to 20th century scope.

  13. Guest says:

    I kind of agree with the FCC. The FCC should have their hands in Internet policy, and direction. Remember who created the Internet - DARPA as part of the DoD then it was further expanded through public universities, and it now exists through the department of commerce. If it was not for consumers, the Internet would not exist today - and that is something that businesses are forgetting.

  14. Michael Russell says:

    To Brett Glass: Spoken like a true lawyer "and I own the company".

    The decision is a blow to public access. Our democracy is not free, sometimes a few investors have to give up their profits so that we can watch bootleg copies of transformers online. Besides, the same bandwidth is used to transfer pictures of war crimes, or political corruption, or a tsunami warning. No reason we shouldn't allow Comcast to decide what information we get or don't.

  15. Stuck on dial-up says:

    I just hope that this plan is eventually successful because I can't get any decent priced broadband for what i need it for and I am in a rural area. The only 2 options for broadband is Sat. internet and WiMAX. Sat. internet for me would be around 80 dollars a months and the WiMAX provider out here were I am I have emailed 2 times and still no return and there is no 4G so I am stuck on Dial-up. Also for broadband users all those big downloads and youtube will corrupt on Dial-up.

    Dial-up also you can't do ANY gaming at all i had to give up PC and PS3 gaming when I moved to a rural area that before there was DSL but the slots filled up after I moved. Also 8MB files are big download to dial-up i know i spent 40+ min tring to times to download one and both times corrupted. i get over 500 packet losses in 1 hour alot of times and that is alot for dial-up at only max 5KB/s"46.6Kbps" to compare on DSL 160KB/s"1.5Mbps"

  16. George Mattathil says:

    At present the information network sector regulatory authority is fragmented along historical technology-specific regulatory needs – spectrum allocation, wireline and wireless. When the FCC regulatory authority evolved, there were no major preexisting infrastructure factors to consider. We now have several fully deployed communication infrastructures that are critical to the economy. At the same time, there are several new technologies with varying degrees of maturity and assimilation that need to be converged into the core infrastructure. Unless the current technology adoption in progress is managed for maximizing the infrastructure capabilities, economic and social benefits, the outcomes will be determined by current structural constraints of market and capital.
    more>
    http://theneteconomy.wordpress.com/2010/04/11/fcc-authority/

  17. Brett Glass says:

    "... classifying Internet access services as telecommunications services could have significant consequences for the global development of the Internet. We recognize the unique qualities of the Internet, and do not presume that legacy regulatory frameworks are appropriately applied to it."

    FCC Chairman Bill Kennard, 1998

  18. MAINEiac-a man from Maine says:

    ....The third and most viable option for the FCC is to take matters into its own hands by reclassifying broadband services under an existing set of rules governing telephone services rather than the current status as a lightly-regulated information service.

    http://www.pcmag.com/article2/0,2817,2362285,00.asp

    article written 04/05/2010.... not 1998 ....

    The Telecommunications Act of 1996 is outdated and out of touch with the reality of data transmission in the 21 century...

    The future of voice is VOIP over a broadband connection.... along with internet access and entertainment services for the home .

    It will take larger companies with deep pockets to build a reliable World Class 21st century data network for America. Large companies that can think about the whole network and have the resources to act....

    Small broadband competitors will create a hodge podge network, only be able to THINK about their little piece... using another companies overhead and outdated assets ( outdated because the larger companies will not invest billions in network upgrades so smaller companies can use their networks to"compete" against them )...

    I support EVEN regulation for all broadband providers allowing a regulated return on network investment.

  19. Design Nine says:

    One approach to solving net neutrality issues permanently is already being successfully pursued by some communities in the U.S. Open access networks, owned by the community, create a "digital road" system that can be used by any and all service providers. Local governments don't sell services and don't compete with the private sector. Instead, like our current transportation road system, a single shared network provides higher performance at lower cost than is possible by having each provider build their own private network.

    On an open access network managed and owned by a neutral third party, network neutrality is baked in via the open competition. If you can choose among a variety of TV, Internet, and telephone providers, each with their own service packages and prices, buyers of services can shop and get the best deal without the overhead of complicated regulatory rules.

    Competition among providers on the shared digital road network lowers costs and encourages innovation and new services.

    The Wired Road (www.thewiredroad.net) has five providers competing for services, and the cost of Internet access has dropped by 50% to 70% for some business customers.

    nDanville (www.ndanville.net) is an open access network that is attracting hundreds of new high-paying jobs to a community that has had the highest unemployment in Virginia for years.

    Utopia is a large multi-community open access network in Utah that had some early issues but is now solidly on track and expanding steadily.

    In New Hampshire, the FastRoads project (www.newhampshirefastroads.net) is just getting started but is a consortium of 43 rural communities planning a large open access network.

  20. Guest says:

    I kind of agree with the FCC. The FCC should have their hands in Internet policy, and direction. Remember who created the Internet - DARPA as part of the DoD then it was further expanded through public universities, and it now exists through the department of commerce. If it was not for consumers, the Internet would not exist today - and that is something that businesses are forgetting.

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