Court: FCC had no right to sanction Comcast for P2P blocking

The FCC's decision to sanction Comcast for its 2007 P2P blocking was overruled today by the US Court of Appeals for the DC Circuit. The question before the court was whether the FCC had the legal authority to "regulate an Internet service provider's network management practice." According to a three-judge panel, "the Commission has failed to make that showing" and the FCC's order against Comcast is tossed.

When the complaints against Comcast first surfaced, they noted that the company was violating the FCC's "Internet Policy Statement" drafted in 2005. That statement provided "four freedoms" to Internet users, including freedom from traffic discrimination apart from reasonable network management. The FCC decided that Comcast's actions had not been "reasonable network management," but Comcast took to the agency to court, arguing that the FCC had no right to regulate its network management practices at all.

The Internet Policy Statement was not a rule; instead, it was a set of guidelines, and even the statement admitted that the principles weren't legally enforceable. To sanction Comcast, the FCC relied on its "ancillary" jurisdiction to implement the authority that Congress gave it—but was this kind of network management ruling really within the FCC's remit?

The court held that it wasn't, that Congress had never given the agency the authority necessary to do this, and that the entire proceeding was illegitimate. The FCC's "Order" against Comcast is therefore vacated; Comcast wins.

The decision wasn't a surprise; during oral argument earlier this year, the judges pressed the FCC's top lawyer repeatedly. The Policy Statement was "aspirational, not operational," they said; the FCC had not identified a "specific statute" Comcast violated; and the FCC "can't get an unbridled, roving commission to go about doing good."

Comcast pledged some time ago to change the way it handled traffic management, and it has already transitioned to a protocol-agnostic approach to congestion.

Source: Arstechnica.com

Could P2P blocking be legalized by new net neutrality rules?

The Electronic Frontier Foundation can't believe it: the FCC's network neutrality draft rules, if adopted in their current form, might give Comcast permission to flat-out block BitTorrent—precisely the scenario that led to the rules being drafted.

It's a shocking claim, if true. Could FCC Chair Julius Genachowski's big push for network neutrality actually authorize the very conduct it was (ostensibly) drafted to prevent, indiscriminate blocking of the bluntest kind?

A massive loophole?
The EFF is concerned about a particular pair of clauses in the current draft rules (PDF) for network neutrality. Those clauses impose no obligation on ISPs to permit "the transfer of unlawful content" or the "unlawful transfer of content." In other words, ISPs don't have to be "neutral" about illegal content, and those trafficking in it can't complain to the FCC is their content is slowed, blocked, throttled, folded, spindled, or mutilated.

If there was any doubt about this, another section of the draft rules make it clear: "Furthermore, we have no intention of protecting unlawful activities in these rules."

Fred von Lohmann, an EFF copyright lawyer, sees danger here. "That means that so long as your ISP claims that it's trying to prevent copyright infringement, it's exempted from the net neutrality principles and can interfere with your ability to access lawful content, use lawful devices, run lawful applications, or access lawful services," he said last week.

Today, the EFF ramped up the rhetoric, saying that the rules have "a loophole that would theoretically permit Comcast to block BitTorrent just like it did in 2007 — simply by claiming that it was 'reasonable network management' intended to 'prevent the unlawful transfer of content.'"

But it's important to remember that the rule isn't new. The FCC's Internet policy statement (PDF), drafted back in 2005 by a very different FCC, set out four "Internet freedoms." The first said that "consumers are entitled to access the lawful Internet content of their choice." The policy statement never provided protection for unlawful content.

It was this policy statement that was regularly cited in the Comcast case, when the ISP was accused of interfering with BitTorrent traffic, regardless of the content being transferred. The company received a wet-towel-snap-to-the-backside from the FCC for its actions.

The other key point is that the new draft rules do not craft an exception to net neutrality for ISPs who are "trying" to stop unlawful content transmission; the exception only applies to actual transfers of unlawful material. Under the EFF's reading of these provisions, an ISP could simply throttle all Web streaming video traffic on the grounds that some of it is unlawful. An ISP could block access to BitTorrent. Particular Web sites like The Pirate Bay could simply be blocked wholesale. Services like Rapidshare could be axed on the same ground. Access to Usenet could be curtailed. In essence, anything could be blocked so long as ISPs could show they were "trying" to stop unlawful content.

Fortunately, this isn't what the draft rules say; the exception only applies to content that is in fact unlawful. The flip side of this is a positive statement: "The nondiscrimination principle would prohibit broadband Internet access service providers from favoring or disfavoring lawful content, applications, or services accessed by their subscribers." That's pretty clear. Any ISP that attempts to do something like block BitTorrent outright would quickly block "lawful content" and would run afoul of the new nondiscrimination principle.

The "reasonable" trump card
But von Lohmann's a sharp lawyer, and he's not crazy. So what is he talking about? What appears to worry him is the fact that the exceptions both exist under the broader heading of "network management." And "network management" is defined as "reasonable practices employed by a provider of broadband Internet access service." Thus the worry—could an ISP get away with claiming that some particular block is "reasonable"? What if 70 percent of the content blocked was unlawful—would that be "reasonable"? What about 80 percent? 90? 95?

Future administrations might well agree that throttling a P2P protocol is reasonable, given that some high percentage of its content is unlawful. And you can bet that groups like RIAA and MPAA will try to make this happen.

The draft rules do address this scenario, though. The FCC says that "it appears reasonable for a broadband Internet access service provider to refuse to transmit copyrighted material if the transfer of that material would violate applicable laws." But it adds that "such a rule would be consistent with the Comcast Network Management Practices Order, in which the Commission stated that 'providers, consistent with federal policy, may block... transmissions that violate copyright law.'"

In other words, this isn't quite a free for all in which the rules on being "reasonable" could be twisted to justify any practice. The FCC provides explicit guidance on dealing with copyrighted works, and that guidance says clearly that ISPs cannot block an entire protocol like BitTorrent (this was the Comcast order being referenced) as they seek to stop the unlawful transfer of copyrighted works.

The rulemaking on net neutrality is ongoing, and the FCC wasn't willing to comment officially on interpretations of the draft rules. However, FCC sources did make clear to Ars that, in their view, the draft rules would not lead to the EFF's nightmare scenario. It is important to note that the FCC is conducting its rulemaking in order to learn about potential problems with its ideas, and the language of the rules may still be tweaked significantly.

What is crystal clear is that the draft rules do allow targeted ISP blocking of illegal content on P2P networks, assuming that the particular method of identifying such traffic passes legal muster (i.e., isn't classed as "wiretapping," which is a potential pitfall of deep packet inspection methods). As footnote 230 notes, "We also propose that broadband Internet access service providers may take action to counter unwanted or harmful traffic such as spam and malware, may decline to carry unlawful traffic, or may decline to carry traffic if the transfer of the content is prohibited by law, including copyright law."

Source: Arstechnica.com