The Federal Communications Commission (FCC) says it has found a solution to legal road-blocking of its powers over broadband providers. It will use a technicality to enforce the "net neutrality" principles, but relax its controls over other aspects of broadband.

The legal saga involves Comcast intentionally slowing down Internet access to customers who were using peer-to-peer filesharing services such as those based on the BitTorrent system. Many people using BitTorrent do so to share copyrighted files without permission, but the system itself is not illegal and can be used just as easily for legitimate purposes.

The FCC issued a ruling against Comcast, saying that this action violated the principles of net neutrality, which state that Internet providers must treat all types of data equally.

Net Neutrality Not On Statute Books

The case eventually wound up in a federal appeals court which, rather than making any decision on Comcast's actions, simply ruled that the FCC did not have the power to enforce net neutrality issues. Why? Because, although the commission is understood to have regulatory duties, Congress has not specifically listed net neutrality as an FCC issue.

That ruling caused some concern about the FCC's legal powers in a range of areas in which it was seeking to carry out its general duties but did not have specific powers written into law. The major problem is that broadband is legally defined as an information service rather than a telecommunications service.

The FCC had considered simply reclassifying broadband as a telecommunications service, meaning it could use the existing Communications Act to justify stronger regulatory powers, including the ability to enforce net neutrality. That raised concern that it would have too much control over broadband firms and restrict competition.

Legal Circle Now Squared

Commission chairman Julius Genachowski now says there's a "third way" to resolving the matter. The FCC will now reclassify the physical transmission of broadband as a telecommunications service, while officially stating that many other aspects of the broadband business are exempted from the Communications Act. (Source: broadband.gov)

The theory is that this exemption will calm investor fears of excessive regulation, in particular by reassuring them that the FCC won't seek to regulate competition issues or control pricing. (Source: fiercebroadbandwireless.com)