Note: this is an update on my earlier story, which incorrectly said that the AP reported that Chairman Martin was seeking to impose "fines" on Comcast. In fact, the story used the word "punish" rather than "fine," and a headline writer at the New York Times added "penalty" to it "F.C.C. Chairman Favors Penalty on Comcast" (I won't quote the story because I'm a blogger and the AP is the AP, so click through.) Much of the initial reaction to the story was obviously colored by the headline.

Martin's concept of punishment is to order the company to do what it had already told the public it was doing, phasing out one system of traffic management in favor of another one. It's a non-penalty punishment, akin to forcing a misbehaving child to eat the candies she's already enjoying. Now back to our story.

At a press conference today, FCC Chairman Kevin Martin said he's not seeking to fine Comcast. Rather, he will simply impose some reporting requirements on them and order them to do what they've already started to do, phase out the current traffic management system in favor of an application-agnostic one.

Confusion continues to surround this story. Cnet reported recently that both AT&T and Verizon spokesmen recommended, at NXTComm panel, that the FCC take action against Comcast, Cnet had to correct the story after the corporate spokesmen clarified they meant to say that the FCC should take some action that didn't punish Comcast but did establish that the agency has jurisdiction over broadband management practices. The original AP story on Comcast written by Peter Svensson created a mistaken impression as well, since it represented a very artificial test as a typical P2P transaction. Svensson is not the reporter who wrote the wire story on the pending FCC action.

The empty "punishment" allows both sides to claim victory.

One of the more intelligent commentaries on that report was from the Bits blog at the New York Times:

Comcast, the nation's largest cable provider, admitted that it was slowing down certain traffic but claimed it was legitimately managing its network so that a few bandwidth hogs didn't bog things down for everyone else. Still, in response to critics, the company decided to work with BitTorrent and experiment with other traffic-management techniques to handle the loads on its network. The dirty little secret of the Internet industry is that all the providers use software tools to manage their network traffic. Comcast got caught and may have been more aggressive than some rivals, but it's certainly not alone.

So why should Comcast be punished for engaging in a practice that's necessary for network stability, doesn't violate any actual rules, and helps the vast majority of its customers? There's no rational reason for the Commission to rule this way, and if they do the only real result will be a court challenge that throws the order in the trash can.

I've said from the beginning that the one aspect of the Comcast network management incident that's questionable is the lack of disclosure in the early days of the controversy, but all that warrants is a slap on the wrist. The real problem with disclosure is that no carrier can really explain how it manages its network in a way the typical consumer can understand.

Levying fines for necessary network management practices would be ridiculous, and the recent Free Press filing with the FCC shows that they don't actually believe they have a legal leg to stand on. The net neutrality and reasonable management rules are impossibly vague. I'm not a lawyer, but there has to be common law principle against punishing people for violating secret laws.

Free Press is enjoying the moment, according to reporter Nate Anderson of the Ars Technica blog:

In a statement sent out late Thursday night, Ammori summed up Free Press' achievement in typical fashion. "Nine months ago, Comcast was exposed for blocking free choice on the Internet. At every turn, Comcast has denied blocking, lied to the public and tried to avoid being held accountable. We have presented an open and shut case that Comcast broke the law. The FCC now appears ready to take action on behalf of consumers. This is an historic test for whether the law will protect the open Internet. If the commission decisively rules against Comcast, it will be a remarkable victory for organized people over organized money."

Free Press has an annual budget of $5 million, some of which it has spent organizing demonstrators at FCC hearings.

At the end of the day, this is much more a question about jurisdiction than it is about policy. Martin is the lapdog of the Telcos and avowed enemy of the cable industry. The Telcos want to prevent Congress from passing either of the Markey or Conyers bills, as they lay out strict, easily-enforceable rules that are fundamentally ludicrous and unworkable. They figure the best way to block these bills is for the FCC to assert that it already has the authority to guarantee sweetness and light on the Internet through its ancillary authority and Policy Statement (the four freedoms.) Cable companies don't trust Martin to give them a fair shake, so they deny the Policy Statement is a rule, which it says it isn't.

The cable companies have a better feel for the tactical side of the question than the telcos do at the moment, as they're the ones who've been taking the heat. Letting the FCC sanction Comcast will only embolden the neutrality mob, and they'll damn sure push on to Congress regardless of the outcome in the FCC. The only way to beat them is to win every battle and take the wind out of their sails.

So this can only come out in two ways as a jurisdiction matter: either the FCC shows it can kick ass and take names, or Congress gets into the act with some very misguided legislation that's going to cause five years of misery until the courts overturn it. So Comcast is in the position of a kid brother who's been blamed for stealing the cookies that his older brother ate: it can take a whipping, or be grounded for a week. I'd personally take the whipping, but neither prospect is appealing.

It's unfortunate that the matter has come to this pass, but there's a lesson in it about responding to false allegations quickly and strongly: the Swiftboat Lesson, once again. Free Press' complaint is an ocean of mendacity, but that sort of thing needs to be nipped in the bud. The next time, I suspect the ISPs will be better prepared. And make no mistake, this is a war, not a battle, and there will be a next time, and time after that, etc.

FYI, Gigi Sohn of Public Knowledge admits today that her group will seek legislation anyway:

"At the same time, this case is limited in scope to one company and to one type of behavior. Even if the Commission ultimately issues an order against Comcast, there is still a need for legislation to prohibit discrimination by telephone and cable companies while preserving the rights of Internet users and companies that do business on the Internet.

You can't please these people.