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After Losing Net Neutrality Battle, What's Next for the FCC?

After losing a battle, what's the FCC planning in the net neutrality war?

FCC
CNBC.com
FCC

I was scheduled to interview FCC Chair Julius Genachowski from the National Association of Broadcasters convention on Monday. But after the FCC lost a key ruling on the controversial issue of "net neutrality" earlier this week, the FCC cancelled Genachowski's interview. They told me that they've been bombarded with interview requests, and they haven't figured out yet what their broader strategy on this issue is going to be.

"Net neutrality" is more interesting than it sounds. The FCC wants to mandate that companies are "net neutral" — i.e. give equal treatment to all Internet traffic, even if users are accessing websites that slow all other users' web traffic. The appeals court ruled that broadband providers don't have to be net neutral — they can control Internet usage on their pipes. The ruling says that the FCC lacks the authority to mandate broadband providers' behavior in this issue.

The case in question: Comcast wanted to limit its customers' access to Bit Torrent — the file sharing site uses up a huge amount of bandwidth, slowing Internet speeds. Consider this a victory for Comcast and the range of other internet providers, both cable companies like Time Warner Cable and telecom players like Verizon and AT&T. Now they can limit access to broadband-hogging websites that slow down service for other paying customers, and could eventually force them to invest in bigger pipes. It also clears the way for Internet providers to charge tiered pricing — the more broadband you use, the more you pay. Time Warner Cable started talking about introducing this model a year ago, but it didn't get very far — it was quickly perceived as anti-consumer.

But this battle is far from over. The FCC released a statement indicating that they'll fight this ruling and is in the process of figuring out what to do next, and how to gain jurisdiction over this type of Internet usage. This battle is likely to revive efforts to get a federal net neutrality rule through Congress. With so much at stake on either side, millions of dollars are being spent on lobbying about this issue. And the FCC is going to pull out all the stops to grow its power and control.

The FCC is looking to protect web giants like Google, Microsoft, Amazon and Ebay, which are not thrilled about this verdict. They've pushed for net neutrality in order to ensure that customers can access their content (like all those YouTube videos) with absolutely no problem. They don't want to have to worry that high traffic during a heated eBay auction or the release of a Harry Potter book on Amazon will prevent them from reaching users.

When Genachowski is ready — we're dying to hear his next step in advancing this war.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.