According to multiple eyewitness reports Friday, including from the Associated Press and from participants in the hearings, a three-judge panel of the US Court of Appeals for the DC Circuit in Washington yesterday, hearing oral arguments in the Comcast v. FCC case challenging possible net neutrality regulation, appeared skeptical of the FCC's authority to enforce such regulation based on a policy statement, rather than law.

At issue in this landmark case is whether the US Federal Communications Commission has the authority under law to force Comcast not to implement per-application throttling techniques in the name of network management -- for instance, slowing down BitTorrent traffic. Back in August 2008, the FCC found Comcast in violation of rules, and ordered the company to cease any network management practice that discriminated against lawful services that customers could use for lawful purposes.

Last November, Comcast issued its brief challenging the Commission's right to impose such an order. The company's theory is that a regulatory agency such as the FCC cannot issue an order based on a policy -- something that Congress has not enacted into law.


"For the FCC to conclude that an entity has acted in violation of federal law and to take enforcement action for such a violation, there must have been 'law' to violate," reads Comcast's appeal. Citing established case law, the company continues, "Because '[t]he Commission 'has no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress,''...the 'law' in an FCC proceeding must be either a statutory provision or an agency rule or precedent properly promulgated pursuant to an underlying statute. Here, no such law existed. Specifically, neither the Policy Statement that the FCC actually enforced against Comcast, nor the statutory provisions that the agency professed to enforce, are binding legal norms that governed the conduct at issue. [Thus] the Policy Statement is unenforceable as a matter of law."

Ironically, after finding themselves unable to pass meaningful legislation on its own, leaders in Congress deferred to the FCC to develop regulations that would effectively define net neutrality and other principles in the US. New FCC Chairman Julius Genachowski elevated himself to prime candidacy for appointment by Pres. Obama after having established himself as a champion of net neutrality. But not Genachowski may find himself inheriting a Catch-22-like situation set up by his predecessors.

Under US law, telecommunications service may be directly regulated by the FCC. But in 2002, the Commission effectively classified broadband as an "information service," which is somewhat distinct, and by law must be regulated differently. That year, the Supreme Court decided that the FCC does have some authority to regulate the Internet as it defined it at the time, though in a limited and "ancillary" sense.

What did the high court mean by "ancillary?" In an amicus brief filed last November, policy advocates led by the Free Press organization noted that the court allowed the FCC to block or approve of mergers in the Internet space. Evidently, they argued, that meant the FCC was presumed to have the authority to protect the public interest as it pertained to the Internet, thus -- by default -- classifying such protection as "ancillary."

"The FCC's interpretation of its authority under the Communications Act is clearly reasonable in light of the statutory language, and in light of Supreme Court and circuit precedent, including this Court's," Free Press wrote to the Appeals Court. "Well established precedents uphold similar exercises of ancillary jurisdiction by the FCC. Furthermore, the factual context of this order -- actions by a facilities-based provider of communications to leverage gatekeeper control of physical facilities -- lie at the core of the history of ancillary jurisdiction. Upholding the FCC's jurisdiction here would not extend the doctrine of ancillary jurisdiction, but would rather be fully consistent with precedent."

Free Press then went on to try to turn Comcast's argument on its ear, suggesting that the "statutory responsibilities" which should distinguish an enforceable law from an unenforceable rule or practice, as Comcast referred to them, are themselves not encoded into US law and may therefore not be used as a legal gauge.

These arguments formed the basis of Friday's oral arguments before the Appeals Court. But according to the legal news service Law360, attorneys for the Open Internet Foundation -- intervenors in the case which, like Free Press, support the FCC -- emerged from the courtroom believing judges were grilling the Commission's lawyers, and may perhaps rule in favor of Comcast -- overturning the FCC order.

That news may have impacted the substance of Chairman Genachowski's public discussion on the federal broadband plan, held at CES 2010 Friday afternoon. There, the Chairman turned up the volume on the need for broadband regulation, citing what he described as a "spectrum crisis" looming on the horizon -- what others have termed the "exaflood." The proclivity of broadband operators such as Comcast to manage and set limits on certain Internet services on a per-application basis, the argument goes, may be moderated by allocating more spectrum for use by the Internet.

But Comcast is not a wireless operator; and the tendency to frame the Internet as a wireless service demonstrates the proclivity of the Commission to shift the ball game onto its home turf -- the public airwaves. Genachowski has often referred to the public Internet and the public airwaves on equal footing, although the fact that Internet wires are owned and operated by private companies is certainly on the minds of the Appeals Court judges.

So Genachowski's public statement in response to yesterday's news may not end up helping his case: "This case underscores the importance of the FCC's ongoing rulemaking to preserve the free and open Internet. I remain confident the Commission possesses the legal authority it needs and look forward to reviewing the court's decision when it issues."