Robert Holmes
Comcast (CMCSA Quote - Cramer on CMCSA - Stock Picks) has filed an appeal against the Federal Communications Commission's decision to prevent the cable giant from limiting certain Internet traffic.
The move sets up a showdown over "net neutrality" that some say represents a new level of intervention by the FCC in the market. In a filing to the U.S. Court of Appeals more than a week ago, Comcast said it will challenge the basis on which the FCC found that Comcast violated federal policy in the absence of pre-existing legally enforceable standards or rules. In August, the commission ruled three to two that Comcast violated federal policy by willfully delaying Internet traffic for users of person-to-person applications, including the much-maligned BitTorrent service, which eats up an enormous amount of bandwidth and is typically used to illegally pirate movies and music. "We continue to recognize that the commission has jurisdiction over Internet service providers and may regulate them in appropriate circumstances and in accordance with appropriate procedures," said David Cohen, Comcast's executive vice president, in a statement. "However, we are compelled to appeal because we strongly believe that, in this particular case, the commission's action was legally inappropriate and its findings were not justified by the record." The continued battle between the FCC and Comcast brings up questions over whether the FCC is micromanaging how an Internet service provider handles its traffic and whether there is a need for congressional action. "The FCC has intervened here in a case that has fairly compelling facts for government intervention," says Jack Nadler, a partner in the Washington, D.C. office of Squire, Sanders & Dempsey. Nadler was actively involved in the legislative proceedings leading to the adoption of the Telecommunications Act of 1996, the major FCC implementation proceedings and numerous court of appeals cases growing out of the act before the U.S. Courts of Appeals.
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