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Appeals Court Delivers Legal Spanking to FCC

News Releases

Washington, D.C., April 6, 2010— The Federal Communications Commission was handed a major defeat today by the U.S. Court of Appeals for the District of Columbia in the matter of Comcast v. FCC. In its decision, the court ruled that the FCC lacks the statutory authority to regulate Internet service providers’ network management practices.

Telecom analysts at the Competitive Enterprise Institute welcomed the court’s decision and urged the FCC to abandon its ongoing “Open Internet” rulemaking proceeding.

“The D.C. Circuit interpreted the Communications Act properly in its ruling against the FCC, and the decision should come as welcome news for consumers and entrepreneurs alike,” said Ryan Radia, CEI Associate Director of Technology Studies. “Hopefully the court’s ruling will spell an end to the FCC’s push to dictate the outcomes of market disputes over network access and pricing.”

Some advocacy groups are urging the FCC to reclassify Internet Service Providers as “common carriers” governed by Title II of the Communications Act. Such a move would open the door for the Commission to enforce a broad array of regulations on Internet providers, governing not only network management but also pricing and access.

“Reclassifying Internet service providers as common carriers would create significant regulatory uncertainty, endangering the dynamic Internet marketplace. Worse, reclassification would impede the FCC’s own goal of ensuring that consumers enjoy ‘competition among network providers,’” Radia argued.

“Instead of pursuing network neutrality, the FCC should abandon its Open Internet rulemaking entirely. The Commission should be first in line articulating the case for preserving and expanding the scope for competing network business models—open and proprietary,” said Wayne Crews, CEI Vice President for Policy. “Instead, its philosophy is hostile not merely to legacy wireline, but to wireless and the yet-to-be.”

“It would be a grave mistake and historical misfortune for Congress to authorize the FCC’s Open Internet rulemaking or to otherwise enact coercive net neutrality legislatively. If Congress wishes to clarify statutes governing the FCC’s jurisdiction over the Net, it should legislatively affirm that the FCC lacks authorization to regulate Internet service providers and that future networks and competitive options are exempt from any such regulation,” Crews argued.

CEI is a non-profit, non-partisan public interest group that studies the intersection of regulation, risk, and markets.