Court ruling strips FCC of Internet authority, hands Congress a tough task

The fight over net neutrality landed in lawmakers’ laps Tuesday when a court decision stripped the Federal Communications Commission (FCC) of authority to regulate the Internet.

It is a major defeat for President Barack Obama, who has called since early in his presidential campaign for rules that prohibit Internet service providers such as Comcast and Verizon from interfering with Web traffic.

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Now the fate of those proposals may rest with congressional Democrats in what could become a long battle with many millions of dollars spent by each side on lobbying and advertising.

Lawmakers generally don’t like to settle such issues because it forces them to pick winners and losers.

In 2009 alone, Web, telephone and other telecom firms spent more than $160 million to make their cases in landmark tech debates, especially in the fight over net neutrality, according to the Center for Responsive Politics.

This made 2009 the tech lobbying community’s most active and expensive year, the center’s figures show. The industry could beats its record in 2010, as the net neutrality debate gains prominence and midterm elections draw near.

Several Democratic lawmakers vow to do whatever is necessary to give the FCC authority over Web providers.

“In the long run, we may need a new legal and regulatory framework for broadband,” said Sen. John Kerry (D-Mass.), chairman of the Commerce Subcommittee on Communications, Technology and the Internet. “I know the Congress did not intend for cable and telephone broadband Internet service providers to fall outside the authority of the FCC to protect consumers.”

Rep. Edward Markey (D-Mass.), a senior member of the House Energy and Commerce Committee, later said the court’s decision “must not be the final word.”

As a co-author of net neutrality legislation, he said he will “continue to work with my colleagues in Congress to provide the commission any additional authority it may need to ensure the openness of the Internet for consumers, innovators and investors.”

Net neutrality has been one of the biggest and most viciously fought battles both on Capitol Hill and at the FCC over the past four years.

Tech companies such as Google, Skype and Amazon argue for an “open Internet” with no restrictions on what services and devices consumers can have access to. Cable and phone companies including AT&T, Verizon and Comcast push back just as forcefully, arguing that they need flexibility to manage traffic on their networks and maintain speeds for consumers.

In 2008, the FCC under then-President George W. Bush’s administration ordered Comcast to stop slowing traffic to bandwidth-hogging file-sharing services. Comcast appealed that decision, saying the FCC did not have enough authority under its current principles. On Tuesday, a federal court sided with Comcast, saying the FCC does not have jurisdiction over broadband.

FCC Chairman Julius Genachowski, who was appointed by Obama with net neutrality as his top priority, indicated he will try to reclassify broadband in the communications statute passed by Congress in 1996 to broaden the FCC’s authority over the service.

But efforts to reclassify broadband as a “Title II” communications service will ignite another lobbying firestorm. Senior lobbyists for AT&T and Verizon have said the FCC will wind up back in court if it tries to “shoehorn” broadband into an inappropriate regulatory framework.

Republicans in Congress also have spoken out against any such efforts by the FCC. Sen. Kay Bailey Hutchison (R-Texas), ranking member of the Senate Commerce Committee, said the court’s decision confirms the FCC does not have authority to regulate the Internet.

“I hope the FCC Chairman will now reconsider his decision to pursue expanded commission authority over broadband services in current proceedings before the agency,” she said.

Rep. Joe Barton (R-Texas), ranking member of the House Energy and Commerce Committee, also warned the FCC not to attempt to reclassify broadband for net neutrality.

He said the 1996 Telecommunications Act explicitly directs the government to “preserve the vibrant and competitive free market that exists for the Internet and other interactive computer services, unfettered by federal or state regulation.”

But the FCC hinted on Tuesday it plans to take that route, stressing the agency is “firmly committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans.”

“Today’s court decision invalidated the prior Commission’s approach to preserving an open Internet,” spokeswoman Jen Howard said in a statement. “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.”

And the White House will continue its support of net neutrality, spokesman Robert Gibbs said Tuesday.

“We’re committed to that and committed to providing businesses with the certainty that they need as well,” he said.

The court’s decision is also a major roadblock for the FCC’s newly released National Broadband Plan, which was drafted on the assumption the agency has the regulatory power over the Internet and the companies that provide access to it.

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Many of its provisions also include clarion calls for net neutrality, which the agency may no longer have the authority to institute and enforce on its own.

Ben Scott, policy director of public interest group Free Press, says telecom lobbyists are about to embark on the most intense period of the net neutrality fight.

“Now it’s decision time,” he said. “The commission either proceeds under Title II or they press pause on their entire broadband agenda.”

With companies including Verizon and AT&T pressing for a complete overhaul of the communications law, Scott says the FCC’s entire broadband plan is at risk.

“No one expects Congress to act quickly,” he said. “There’s no reason why Congress can’t spend the next two years changing the law, but in the meantime, the FCC can’t sit on its hands and do nothing.”