On August 20, 2008, the FCC finally released the Comcast Order,¹ deciding the complaint brought by Free Press and Public Knowledge claiming that Comcast's treatment of certain peer-to-peer traffic constituted an unreasonable network management practice. The Commission found that Comcast's network management practices were discriminatory and arbitrary, and did not constitute reasonable network management. The Order requires Comcast to disclose the details of its network management practices within 30 days, to submit a compliance plan detailing how it intends to stop these practices by the end of this year, and to disclose to the Commission and the public the details of any network management practices that it intends to deploy in the future. If Comcast fails to comply with any of these deadlines, the Commission will automatically impose injunctive relief, issue a show-cause order, and set it for hearing 30 days later. The Commission declined to impose any forfeitures or monetary penalties on Comcast.

The substance of the Order was long anticipated in the press and closely tracks the news release the FCC previously issued announcing its decision. In addition to deciding against Comcast--often in a somewhat hostile tone--the Order creates precedent that will shape the contours of the "net neutrality" debate, and in particular, the litigation of future net neutrality complaints. Of particular note:

• The Order asserts expansive Commission authority in this area. In a lengthy, detailed, and far-ranging discussion, the Commission has claimed broad authority over the Internet--authority that would seem to extend far beyond the issue of net neutrality to reach a wide variety of regulatory initiatives with respect to Internet and broadband services generally. The Commission based this authority on its ancillary jurisdiction to advance a grab bag of statutory goals. Several of these have not previously been characterized as relating to Internet or broadband services. The legitimacy of the Commission's rationale will almost certainly be one of the central issues in the inevitable court challenge of the Order. The Commission argued in the Order that Comcast should be precluded from challenging its jurisdiction, however, given (1) an assertion by Comcast that the Commission has jurisdiction, in a primary jurisdiction argument in another case and (2) the order approving Comcast's (and Time Warner's) acquisition of Adelphia's cable systems, which indicates that complaints concerning net neutrality could be brought to the Commission.
  
  
• The Commission determined that, for now, the best way to proceed in this area is on a case-by-case basis, rather than to adopt industry-wide rules. The Order recognizes that operators have various network management practices and face different challenges in light of their network architecture and technology. Nevertheless, while the Order insists repeatedly that it is restricted to its facts and does not decide more general issues, it will almost certainly be applied as guiding precedent for future complaints: while recognizing, for example, that there may be unique issues in wireless networks or reasons to prefer real time VoIP packets, the Order repeatedly also indicates that "discriminatory" network management practices will be considered suspect, presumably in all contexts.
  
  
• The standard that was applied here, and will almost certainly be applied in future adjudications, is as follows: the complainant has to make out a prima facie case that the provider has "impeded Internet content or applications," at which point the burden shifts to the provider to show that its network management activities were nevertheless "reasonable." At least where the network management practice involves discrimination among different applications--which is likely to be the allegation in most net neutrality complaints--the practice must meet what the Commission calls a "high threshold," which involves a showing that the provider is seeking to advance a "significant" or "critically important" goal through "carefully tailored" practices.
  
  
• In this case, the Commission assumed without deciding that easing network congestion is a critical goal, leaving open a fairly central question in the network management debate. The Order also seems to recognize that policing child pornography and other unlawful conduct would be a critical goal, and notes that blocking such material is legitimate--but its cursory treatment of that issue may be unsatisfactory to many.
  
  
• On the merits here, the Commission found that Comcast's particular practices--"managing" network congestion by using reset packets to interrupt peer-to-peer transmission--were not reasonable or "narrowly tailored." To begin with, the Order finds that Comcast interrupted peer-to-peer transmissions regardless of the day or time of day, and regardless of actual congestion in the affected neighborhood; it also found that Comcast did not interrupt other applications even when they consumed high amounts of bandwidth. The Commission concluded that Comcast could and should have used more targeted measures to police congestion, such as capping capacity and charging overage fees to aggressive users, throttling back the connections of high usage users, or working with the application vendors to address congestion. The Commission also concluded that the unreasonableness of Comcast's practices was compounded by its failure to disclose them to consumers.
  
  
• Despite a heavy focus on the discriminatory nature of Comcast's conduct, the Order avoids the question of whether the Commission's net neutrality policy now includes a "non-discrimination" principle--an issue pending in a Commission rulemaking--by instead analyzing Comcast's conduct as a violation of the duty to allow consumers to access content of their choice. And the Commission specifically notes that it has not decided a key "non-discrimination" issue--i.e., whether a provider may reach a commercial agreement to give preferential, premium treatment to a specific application provider--or a specific application, such as VoIP.

The Order appears to be more carefully crafted than most FCC orders. In scattered footnotes throughout the Order, the Commission attempted to respond to virtually every legal and policy argument raised by Comcast, with the apparent goal of strengthening the Order against the expected challenge on appeal. That appeal will be monitored closely by industry, public interest groups, and policymakers alike--its outcome likely will have a critical effect on the future of the net neutrality debate.

¹ Memorandum Opinion and Order, Broadband Industry Practices Petition of Free Press et al. for Declaratory Ruling that Degrading an Internet Application Violates the FCC's Internet Policy Statement and Does Not Meet an Exception for "Reasonable Network Management", FCC 08-183 (rel. Aug. 20, 2008) ("Order"). The Order also decides the declaratory ruling petition on the same general subject filed by Free Press and others.