The problem with what the FCC did here was to take upon itself the role of having a roving commission to regulate carrier activities on the internet.
By law, the FCC is an administrative agency - that is, it is charged with administering an act of Congress that gives it express authority to regulate an industry. An administrative agency can only regulate things over which it has been given such authority. In this case, the FCC did not have any express authority in any statute empowering it to impose rules of net neutrality concerning a carrier's attempt to restrict peer-to-peer usage across the carrier's network. The FCC admitted as much and argued that it had so-called "ancillary" authority to make the ruling that it did in this case. In other words, it claimed implied authority to act as it did. The court disagreed.
The Second Circuit's decision goes through a painstaking analysis of technical doctrines of administrative law relating to the FCC's attempt to justify its decision based on "ancillary" authority. The court concluded that the FCC, in failing to tie this assertion of authority to any "statutorily mandated responsibility," had overstepped its proper function. Accordingly the court struck the order down as illegal.
A reasonably informed legal discussion of the case appears here (http://www.law.com/jsp/article.jsp?id=1202447593360&Appe...). As noted in that piece, this is a "decision with far-reaching implications for the future of the Internet and the role of the Federal Communications Commission."
Whatever the merits of net neutrality, the FCC cannot disregard the rule of law. Congress can empower the FCC to regulate the net in this manner and that is where this battle should be fought.
It certainly appears that Congress needs to address the definition of what internet traffic actually is for regulatory purposes, if only to spare business and the public the expense of arguments over how that traffic is regulated. The FCC variously invoked its existing authority to regulate broadcast, telephony and the provision of infrastructural access to ISPs, but since none of these things are properly definitive of IP packets the existing authority isn't applicable, and so they had no right to order Comcast to submit its load-balancing methodology to the FCC for approval.
Put another way, it seems as if the FCC has the authority to regulate the creation of infrastructure but not the manner in which it is operated, and the origination and transmission of data over that infrastructure are not protected from interference by network operators. It's as if anyone is entitled to set up a railway terminal and have access to the track network, but no customers of a given terminal are entitled to any assurances about how fast their shipping containers will be delivered, if at all.
All the existing regulation seems to be built on the premise the communication takes place over a limited swathe of electromagnetic spectrum or physical wires, with fixed geographic points of signal origination or relay as a unifying characteristic. The fundamentally diffuse and ephemeral nature of data itself (which might be collated from multiple different sources over temporary ad-hoc networks that are neither physical nor persistent) isn't explicitly treated by any existing regulation that I know about. For example, if HN is run on a virtualized server spread across multiple slices running on computers in a variety of data centers, it becomes hard, or perhaps even meaningless, to talk about 'where' this discussion is taking place - it may not exist in any single physical location.
The sheer abstraction involved might be a problem for Congress (as exemplified by former Senator Ted Stevens' flailing attempts to explain the internet as a 'series of tubes'). Then again, we manage OK with a shared agreement about the contents of the US Constitution, without the necessity of running off to the National Archives every time wish to refer to it, and are able to exchange money in the economy without needing to correlate every transaction against the gold stored in fort Knox. I hope this ambiguity will be resolved by Congress rather than by being appealed up to the Supreme Court.
By law, the FCC is an administrative agency - that is, it is charged with administering an act of Congress that gives it express authority to regulate an industry. An administrative agency can only regulate things over which it has been given such authority. In this case, the FCC did not have any express authority in any statute empowering it to impose rules of net neutrality concerning a carrier's attempt to restrict peer-to-peer usage across the carrier's network. The FCC admitted as much and argued that it had so-called "ancillary" authority to make the ruling that it did in this case. In other words, it claimed implied authority to act as it did. The court disagreed.
The Second Circuit's decision goes through a painstaking analysis of technical doctrines of administrative law relating to the FCC's attempt to justify its decision based on "ancillary" authority. The court concluded that the FCC, in failing to tie this assertion of authority to any "statutorily mandated responsibility," had overstepped its proper function. Accordingly the court struck the order down as illegal.
A reasonably informed legal discussion of the case appears here (http://www.law.com/jsp/article.jsp?id=1202447593360&Appe...). As noted in that piece, this is a "decision with far-reaching implications for the future of the Internet and the role of the Federal Communications Commission."
Whatever the merits of net neutrality, the FCC cannot disregard the rule of law. Congress can empower the FCC to regulate the net in this manner and that is where this battle should be fought.