A federal appeals court was holding oral arguments Friday in Comcast's challenge of the FCC's 2008 order banning the company from blocking its broadband subscribers from using an online file-sharing technology known as BitTorrent.
The commission, at the time headed by Republican Kevin Martin, based its order against Comcast on a set of net-neutrality principles it adopted in 2005 to prevent broadband providers from favoring or discriminating against certain types of Internet traffic.
Those principles have guided the FCC's enforcement of communications laws on a case-by-case basis.
Formally adopting those guidelines as binding regulations is a top priority for the FCC's new Democratic chairman, Julius Genachowski. The agency voted in October to start writing those rules.
And now, with Comcast appealing the FCC order against it, one key question that could come up in the courtroom is whether the commission has legal authority to mandate network neutrality. A ruling by the U.S. Court of Appeals for the District of Columbia Circuit, expected this spring, could bolster the FCC proceeding if the agency prevails.
"Comcast and others have challenged the FCC's authority to take action to protect consumers and ensure their access to a free and open Internet," FCC General Counsel Austin Schlick said. "This case provides the court of appeals an opportunity to reject those arguments and confirm that the commission has the power it needs to accomplish those goals."
The policy dispute over network neutrality has pitted some of the country's leading Internet companies, including Internet search provider Google and the Internet calling service Skype, against the big phone and cable operators.
The Internet companies say that without such rules, broadband providers could become online gatekeepers and prioritize traffic for those who can pay extra, while degrading or blocking cheaper Internet calling services or online video sites that compete with their core businesses.
Indeed, BitTorrent, the online file-sharing technology blocked by Comcast, can be used to transfer large files such as online video, something that threatens Comcast's core cable TV business.
But broadband providers such as Comcast , AT&T and Verizon Communications argue that after pouring billions of dollars into their networks, they should be able to offer premium services to differentiate themselves from competitors and earn a healthy return on their investments.
They also insist they need flexibility to manage their systems so high-bandwidth applications such as BitTorrent don't hog too much capacity and slow down the network for everyone else.
For its part, Comcast wants to keep its challenge to the FCC order narrow. It argues that the order is illegal because the agency was seeking to enforce mere policy principles, which don't have the force of regulations or law.