Comcast, the FCC, and "Open Internet" Rules: Where We Stand

On Friday, Comcast presented oral argument before the U.S. Court of Appeals for the D.C. Circuit in the company’s challenge to the FCC’s “Bit Torrent” Order. Comcast has challenged the FCC’s 2008 Order which found, in the absence of any applicable federal law, that Comcast violated “federal Internet policy” in the way it chose to manage congestion on its network – engineering decisions designed in good faith to provide the best possible Internet experience to as many of our customers as possible. In March 2008, while the FCC was considering the matter, Comcast announced that it had chosen to move to a different technique for managing network congestion. Unfortunately, the FCC proceeded to issue an order against Comcast in August 2008. We and many others (including two FCC Commissioners) thought the order was simply wrong, both legally and factually.

A little history: In 2005, the FCC had adopted a very short, four-point “Internet Policy Statement” that, among other things, described what consumers should be able to expect from their Internet service provider, including “reasonable network management.” But policy statements are not law. They are not the same thing as enforceable rules. Members of the FCC and even advocates of “net neutrality” regulation made that very point at the time. When that Statement was issued, Comcast made it clear that we supported the four principles. We served (and still serve) our customers consistent with those principles.

When in 2007 the FCC instituted proceedings based on a complaint against Comcast’s network management and told us we needed to show why we had not violated “federal Internet policy,” we were surprised. And when the FCC ultimately issued an order telling us what they thought we had done wrong — and telling the world for the first time how the FCC intended to interpret and enforce this “policy” - we were very disappointed. We felt our network management practices were reasonable and consistent with the Internet Policy Statement. Perhaps more importantly, from a legal standpoint, we felt the FCC had not given us (or anyone else) fair notice of what its standard was for determining whether conduct (including network management) was permissible. It also didn’t give fair notice that it would try to directly enforce the aspirational Policy Statement regarding consumer expectations against us (or anyone else).

When the FCC issued its Order finding of a violation of federal standards based on our network management practices that we believed in good faith were reasonable, we had no choice but to challenge it in court.

It remains our hope that the court will tell the FCC to vacate (withdraw) the Comcast order, and thereby set the record straight and clear our name. In the meantime, last fall the new FCC began doing what the previous FCC should have done in the first place — FCC Chairman Julius Genachowski asked the agency to start a proceeding to adopt rules to “preserve an open Internet” that are based, in significant part, on the FCC’s 2005 Internet Policy Statement. In other words, the FCC is now determining whether there is a need for enforceable rules and, if so, to properly establish them and to decide what guidance those rules should give to Internet Service Providers and others in the Internet ecosystem. The current rulemaking proceeding will also create a proper record for the FCC to consider its legal authority to proceed with any rules it ultimately decides to adopt. And Comcast, in turn, has been supportive of this FCC’s actions to bring some clarity to this unsettled area.

Some activists insist that Comcast’s challenge to the FCC is “a fight about net neutrality.” That’s simply not true. The primary basis for our challenge, and the basis on which we hope the court will decide this case, is that no federal agency can subject any company or individual to sanctions for violation of federal standards when there was no law in the first place. This is a basic issue of fair notice, regardless of the issue at stake. So it shouldn’t matter whether you are for or against “net neutrality” regulation — this is simply not the way the government should conduct its business. If the FCC — or any agency — wants to regulate in an area, it needs first to establish binding regulations and apply them properly, consistent with the process that Chairman Genachowski has now proposed.

So where does Comcast stand on whether rules are needed? As I’ve noted before, we support the Chairman’s commitment to an “open, transparent, fact-based and data-driven” rulemaking proceeding on this topic. In an interview on CNBC last Friday, our Chairman and CEO Brian Roberts also endorsed the FCC trying to make clear what the rules of the road are moving forward. He noted our support of the Chairman’s process, and pledged our constructive participation.

And while, as we will make clear in our comments, we continue to question whether the record will show a need for new rules — because broadband competition and consumer demand will ensure that the Internet remain open as it has always been — the FCC may decide otherwise. If that is the result, we are obviously better off having “clear rules,” as Brian stated, than with the confusion of having the FCC try to enforce an unenforceable and vague “policy statement.”

It’s truly sad that the debate around “net neutrality,” or the need to regulate to “preserve an open Internet,” has been filled with so much rhetoric, vituperation, and confusion. That’s gone on long enough. It is time to move on, and for the FCC to decide, in a clear and reasoned way, whether and what rules are needed to “preserve an open Internet,” and to whom they should apply and how. In launching the rulemaking, the FCC said that greater clarity is required, and we agree. Comcast will join many other interested parties in making comments to the FCC this week regarding its proposed open Internet rules. Our goal is to move past the rhetoric and to provide thoughtful, constructive, and fact-based guidance as the FCC looks for a way forward that will be lawful and that will effectively balance all the important interests at stake.