Federal regulators voted 3-2 on Friday to declare that Comcast's throttling of BitTorrent traffic last year was unlawful, marking the first time that any U.S. broadband provider has ever been found to violate Net neutrality rules.

The Federal Communications Commission handed Comcast a cease-and-desist order and required the company to disclose to subscribers in the future how it plans to manage traffic. Comcast had said that its measures to slow BitTorrent transfers, which it voluntarily ended in March, were necessary to prevent its network from being overrun.

"We need to protect consumers' access, said FCC Chairman Kevin Martin, a Republican. "While Comcast has said it would stop the arbitrary blocking, consumers deserve to know that the commitment is backed up by legal enforcement."

The vote was not unexpected. Martin said recently that he planned to side with the commission's two Democrats on the request submitted in November by Free Press and its political allies, including some Yale, Harvard, and Stanford University law school faculty. That led to a backlash against Martin this week from economic conservatives, including the Bush administration and House Republican Leader John Boehner.

It also is likely to be challenged in court. In 2006, Congress rejected five different bills that would have handed the FCC the power to police Net neutrality violations; the FCC has acknowledged that its own Net neutrality principles "are not enforceable"; the Supreme Court has previously ruled that the FCC has no power to regulate "unless and until Congress confers power upon it."

Comcast said in a statement on Friday that it believes "the commission's order raises significant due process concerns and a variety of substantive legal questions. We are considering all our legal options and are disappointed that the commission rejected our attempts to settle this issue without further delays."

Details of the FCC's ruling, which may not be available for a few weeks, remain unclear. While Comcast will face no fine, Martin said the FCC has adopted a new legal "framework" that will let federal bureaucrats deem whether future network management practices are permissible. The dissenting Republicans said they did not receive the final text of the order until late last night--it apparently includes a variant of a "strict scrutiny" test usually reserved to judge whether government policies are legal or not--and it is not yet public.

Commissioner calls ruling unlawful

In an unusually pointed dissent, Commissioner Robert McDowell, a Republican, said the FCC's ruling was unlawful and the lack of legal authority "is sure to doom this order on appeal." McDowell said the order would invite far more extensive FCC regulation of the Internet, with the rules varying by which political party controls the White House: "The ground rules will change based on election results."

The is the FCC's "journey into the realm of the unknowable," McDowell said, saying that the outcome "may result in slower online speeds" for most Americans. Deborah Taylor Tate joined him in a dissent; Democrats Michael Copps and Jonathan Adelstein joined Martin.

A summary of the order released by the FCC on Friday says:

The Commission announced its intention to exercise its authority to oversee federal Internet policy in adjudicating this and other disputes regarding discriminatory network management practices with dispatch, and its commitment in retaining jurisdiction over this matter to ensure compliance with a proscribed plan to bring Comcast's discriminatory conduct to an end. Under the plan, within 30 days of release of the Order Comcast must:

* Disclose the details of its discriminatory network management practices to the Commission

* Submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year

* Disclose to customers and the Commission the network management practices that will replace current practices To the extent that Comcast fails to comply with the steps set forth in the Order, interim injunctive relief automatically will take effect requiring Comcast to suspend its discriminatory network management practices and the matter will be set for hearing.

Free Press hailed the vote as a "landmark" decision. "Comcast's history of deception and continued blocking show contempt for the online consumer protections established by the FCC," said Josh Silver, executive director of Free Press, in a statement. "We commend Chairman Martin and Commissioners Copps and Adelstein for standing up for Internet users and working across party lines to protect free speech and the free market."

Not helping Comcast's credibility was its denial in August 2007 of early allegations that it was filtering BitTorrent traffic. A few months later, though, it turned out that Comcast really was throttling BitTorrent after all, and the company was forced to concede to the FCC that it blocks only "excessive" traffic. That also handed competitors like AT&T a perfect opening to say that they don't throttle peer-to-peer traffic at all.