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Court Rules Against FCC in Comcast Challenge

April 12, 2010

April 12, 2010 (Mountain View, CA) — Mark Ostrau, partner and Chair of the Antitrust Unfair Competition Group at Fenwick & West LLP, was recently quoted in the National Law Journal article, "Court rules against FCC in Comcast challenge."

In a ruling regarding Comcast Corp. v. FCC, the U.S. Court of Appeals for the D.C. Circuit unanimously ruled that the FCC lacks the authority to regulate the network-management policies of Internet service providers, a decision telecom lawyers say immediately jeopardizes the agency's proposed rules on net neutrality.

In a statement, the FCC stressed that options still remain for the agency to move ahead.

The court considered whether the FCC could bar Comcast from interfering with its customers' use of peer-to-peer networking applications. The FCC acknowledged it had no explicit regulatory authority to do so, but claimed it had "ancillary" jurisdiction over such network-management practices.

The court did not agree. "Were we to accept that theory of ancillary authority, we see no reason why the Commission would have to stop there, for we can think of few examples of regulations...[it] would be unable to impose upon Internet service providers," wrote Judge David Tatel for the panel, which also included Chief Judge David Sentelle and Senior Judge A. Raymond Randolph.

The decision may also have ramifications for the pending merger of Comcast and NBC Universal, noted Mark Ostrau. If the FCC lacks the authority to enforce rules on net neutrality, he said, the antitrust review becomes more important as the way to ensure Comcast won't favor NBC content online.

"If there's a regulatory scheme in place that protects access, the antitrust laws can step back and say, 'There's no need for us to get involved and force Comcast to play with others,'" Ostrau said. "But if the FCC has no ability to regulate how Comcast manages its network, it means the antitrust [provisions] need to be more effective and have more influence."