A US Federal Appeals Court has ruled that the Federal Communications Commission (FCC) lacks the proper authority to demand Internet providers such as Comcast fully equalize the flow of traffic.
The ruling was prompted by an official Comcast appeal, which had challenged the FCC's authority to demand the broad imposition of "net neutrality" on national broadband providers.
"FCC Chairman Julius Genachowski argues that such rules are needed to prevent phone and cable companies from using their control over Internet access to favor some online content and services over others," wrote the AP's Joelle Tesller.
"The decision also has serious implications for the massive national broadband plan released by the FCC last month. The FCC needs clear authority to regulate broadband in order to push ahead with some its key recommendations, including a proposal to expand broadband by tapping the federal fund that subsidizes telephone service in poor and rural communities."
Meanwhile, Andrew Jay Schwartzman, a Washington-based attorney who helped defend the FCC's position in the case, told BusinessWeek that the above-mentioned decision represented a "severe limitation on the agency's future authority" to regulate companies' activities on the Internet.
Indeed, the FCC determined in 2008 that Comcast had unfairly blocked subscribers using peer-to-peer software. The cable company countered by claiming certain file transfers were "delayed" in an effort to "alleviate" network congestion.