• by Wendy Davis  @wendyndavis, August 4, 2008

In a decision hailed as a precedent-setting move, a divided Federal Communications Commission ruled Friday that Comcast's methods for managing Web traffic are unlawful.

The agency said that Comcast's pattern of interfering with high-bandwidth peer-to-peer traffic violates the principle that service providers treat all lawful applications equally and is "inconsistent with the concept of an open and accessible Internet."

"In essence, Comcast opens its customers' mail because it wants to deliver mail not based on the address on the envelope but on the type of letter contained therein," the FCC said in a statement.

The commission ordered Comcast to stop singling out peer-to-peer traffic for special treatment by the end of the year, but didn't impose a fine. Several months ago, the cable company said it intended to develop protocol-agnostic traffic management techniques, but the order now requires Comcast to follow that policy.

"While Comcast has said it would stop the arbitrary blocking, consumers deserve to know that the commitment is backed up by legal enforcement," FCC Chair Kevin Martin said in a statement. Martin, a Republican, and Democrats Michael Copps and Jonathan Adelstein voted to sanction Comcast. Republicans Robert McDowell and Deborah Taylor Tate dissented.

Comcast's traffic-shaping techniques came to light last year after some subscribers noticed they were having difficulty uploading files. Tests by The Associated Press and the Electronic Frontier Foundation subsequently confirmed that Comcast was systematically throttling peer-to-peer traffic.

Those tests prompted Comcast to acknowledge it sometimes interfered with peer-to-peer connections, but the company said it did so in order to manage congestion on its network. The revelations also sparked net neutrality advocates Free Press and Public Knowledge to file a complaint with the FCC.

Comcast said in a statement it was "disappointed" with the decision "We believe that our network management choices were reasonable, wholly consistent with industry practices and that we did not block access to Web sites or online applications, including peer-to-peer services," the company said in a statement. Comcast also said it is considering its legal options.

Among other arguments, the cable company has said that the FCC has no authority to enforce net neutrality principles.

In 2005, the FCC issued a policy statement holding that Internet service providers should not discriminate between lawful applications. Comcast maintains that the policy statement didn't create any new legal obligations.

McDowell agreed with Comcast on that point in his dissenting statement. "In short, we have no rules to enforce. This matter would have had a better chance on appeal if we had put the horse before the cart and conducted a rulemaking, issued rules and then enforced them.

Net neutrality advocates hailed the majority's decision, stating it will likely have ramifications far beyond Comcast -- which isn't the only company to have slowed traffic to specific types of applications. A recent report by the Max Planck Institute for Software Systems in Germany found that Cox Communications also slowed peer-to-peer traffic.

Free Press general counsel Marvin Ammori, who authored the complaint against Comcast, said Friday's ruling should go a long way towards ensuring that all Internet service providers adhere to net neutrality principles. "It's very important precedent," he said. Ammori said the ruling demonstrates that "the commission will act on credible complaints of interference with Internet traffic in a discriminatory way."

McDowell in his dissent warned that the decision could ultimately harm people's ability to use the Web. "Ironically, today's action by the FCC may actually result in slower online speeds for 95 percent of America's Internet consumers," he wrote.

But net neutrality advocates say there's no evidence that's the case. Ammori dismissed the assertion as a "scare tactic." Tim Wu, a Columbia law professor and chairman of the board of Free Press, also discounted it. "As for McDowell's assertion, it is just that - an assertion, with nothing to back it up," he said in an e-mail.