No sooner had a federal court ruled on the current Internet regulatory controversy, dubbed net neutrality, than the sides began forming up for the next round. Round 1 decisively went to Comcast and the big telcos. In case you missed it, here’s the AP report.

Net neutrality revolves around the right of the telcos to control who uses their bandwidth for what purposes and at what cost. Basically, the telcos want to either restrict usage by some users, ones they consider bandwidth hogs, or charge them a premium. The FCC said no; the U.S. federal court said that the FCC had overstepped its authority. Here is the ruling.

Basically, the court said that the FCC has no specific authority to do what it did. The FCC cited policy as the basis for its authority, but as the court concluded, “statements of policy, by themselves, do not create statutorily mandated responsibilities.” In short, stated policy isn’t enough; some relevant law must specifically authorize you. Does anyone think this is the last word when it comes to net neutrality?



This blog covered net neutrality back in September. CFOs and other business managers have a knee-jerk reaction to regulation and will cheer the court’s latest ruling. However, if you aren’t a big telco or your business, like most businesses, increasingly depends on unfettered access to the Internet, this is not a cause to celebrate — although you may applaud the court’s seemingly anti-regulatory tone. The truth: The decision, if it stands, has real potential to hit your business in the pocketbook.

In addition, the decision may not be as anti-regulatory as it initially seems. Rather, the court suggests that the FCC may have focused on the wrong points in case law to do what it wants. As one commentator suggested, “The justices did not opine that the FCC has no right to regulate ISPs.” They just went about it the wrong way.

So, while lawyers for the various sides wrestle over which particular rules might better apply, you can be sure lobbyists will be all over members of Congress to craft a more specific statute either giving the FCC the authority to move ahead with net neutrality or killing it altogether. Of course, with an election looming and many incumbents suddenly facing challengers, there will be an insatiable craving for campaign donations.

Much is at stake here. Growing evidence suggests that a robust broadband Internet creates a powerful economic enabler. In March, the FCC proposed a 10-year plan aimed at establishing high-speed Internet as the country’s dominant communication network. Even before the net neutrality ruling, this had telco lobbyists smothering Congress to ensure they got the choicest pieces of the pie.

Certainly, all the outsourcing and offshoring along with cloud computing and SaaS and all the other as-a-service offerings that have enabled companies to lower costs and better compete depend on an accessible and cheap Internet. How would your company compete and how long would it function without fair and unfettered access to email and the Internet? Do you think the telcos have your company’s interests at heart? Post a comment below to let us know. ###