Federal appeals court vacates FCC's decision on net neutrality

A federal appeals court ruled today that the Federal Communications Commission does not have the authority to order an Internet service provider to change its management policies.

The decision, which has far-reaching implications, casts doubt on the FCC’s authority to require net neutrality, which requires that all Internet content be treated equally, at a time when the commission is pushing to expand its influence over the Internet through a universal broadband plan and other initiatives, The New York Times reported.

The U.S. Court of Appeals in Washington, D.C., found that the FCC erred when it instructed Comcast, the nation’s largest cable television service, to halt its interference with online traffic to the peer-to-peer file-sharing Web site BitTorrent. Comcast argued in a 2008 lawsuit that the FCC did not prove its jurisdiction in the matter.

"We begin — and end — with Comcast’s jurisdictional challenge," the court said in Tuesday’s decision supporting the cable provider.

Though the FCC lost this particular case, it said in a statement to the Times that “the court in no way disagreed with the importance of providing a free and open Internet, nor did it close the door to other methods for achieving this important end.”

Producers of Web content say the decision will limit innovation and customer choice. Critics worry the ruling will give network providers the ability to restrict access to Web sites like Hulu.com or YouTube by controlling the sites’ broadband speed — or that it could lead to favoritism when and if Comcast completes its acquisition of a majority stake in NBC Universal.