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Did Comcast Really Win?

5:15 PM -- Did Comcast Corp. (Nasdaq: CMCSA, CMCSK) actually "win" anything today after an appeals court vacated the Federal Communications Commission (FCC) 's original order to sanction the MSO over alleged violations of the agency's Internet policy statement? (See Net Neutrality Ruling: FCC Loses, Comcast Wins and Who's Winning Net Neutrality Debate? Nobody.)

Although Tuesday's court ruling "raises grave doubts" about whether the FCC has the authority to impose network neutrality rules on carrier networks, Sanford C. Bernstein & Co. Inc. analyst Craig Moffett suggested in a note issued today that it may be too early to declare any long-term winners and losers, and that the final answers can't be determined until after the FCC decides what to do next.

In Moffett's view, the FCC now has three options:


  • To obtain the necessarily authority to Congress.
  • To go to Congress and request formal net neutrality legislation.
  • To "reclassify" broadband, and bring it under FCC jurisdiction.

Moffett notes that the third option, reclassification, has been dubbed "the nuclear option" by some because it could see the FCC try to claim authority under a Title II (Common Carrier) designation rather than the Title I (Information Services) authority it has over broadband services now.

"A Title II designation would have sweeping implications far, far beyond net neutrality," Moffett writes, adding that it could bring back a "raft of regulatory obligations from the days of monopoly telecommunications regulation -- potentially including price regulation."

Such unpredictable regulatory risk "would call into question virtually every assumption about the terminal value of networks," he added.

At the same time, a Title II designation is still considered "improbable" in Moffett's view, but its mere threat makes it "entirely unclear whether today's ruling should be judged as a 'win' for Comcast (and, by extension, other carriers) or as a 'loss'," Moffett concludes.

UPDATE: FCC Commissioners weigh in
In comments made later today following news of the vacated ruling, FCC commissioner Michael Copps said the Commission should move to reclassify its authority of the Internet.

"The only way the Commission can make lemonade out of this lemon of a decision is to do now what should have been done years ago -- treat broadband as the telecommunications service that it is," said Copps, a Democrat, in a statement. "We should straighten this broadband classification mess out before the first day of summer."

Fellow Democratic commissioner Mignon Clyburn was less harsh, noting that the court decision gives the FCC "the kind of guidance that will enable us to develop the most effective and legally sound rules of the road to preserve Internet openness and to achieve other important goals set forth in the National Broadband Plan."

FCC Chairman Julius Genachowski, also a Democrat, has not yet released a statement on the matter. (See FCC Chairman Pushes for Net Neutrality Rules .)

Robert McDowell and Meredith Attwell Baker -- the two Republican Commissioners -- were clearly in the other camp, issuing statements coming out against a reclassification of broadband services as a monopoly phone service under Title II of the Communications Act.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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