On November 14, 2007, then-candidate Barack Obama gave a speechat Google’s headquarters in Mountain View, California in which he promised, “I will take a back seat to no one in my commitment to network neutrality. Because once providers start to privilege some applications or websites over others, then the smaller voices get squeezed out and we all lose.”

Less than a year after President Obama took office, the Federal Communications Commission (FCC) opened a formal debate on network neutrality. Just over a month ago, however, a federal court’sdecision threw a monkey wrench into the FCC’s plans to fulfill President Obama’s commitment.

What Is Network Neutrality?

In the words of Professors Lawrence Lessig and Robert Chesney, network neutrality “is the most important public policy you’ve probably never heard of.” In a nutshell, it is the concept that internet service providers (ISPs) should be neutral gatekeepers of the internet and should be prohibited from discriminating against what content consumers can access.

For example, under network neutrality principles, an ISP (e.g. Verizon DSL or Comcast Cable) would be prohibited from cutting a deal with a media conglomerate (e.g. Disney or News Corp.) whereby all of the ISPs customers would be given speedy access to websites featuring the conglomerate’s content and slow (or no) access to websites featuring content from the conglomerate’s competitors.

As Senator Franken (D-MN), touched upon during Justice Sotomayor’s Senate confirmation hearings, network neutrality has become increasingly important given the increasing trend of vertical integration by media conglomerates (e.g. Comcast’s recent integration with NBC Universal).

Others, like Senator Brownback (R-KS), feel differently. According to Brownback, “[i]t must be recognized that ‘network neutrality’ is anything but neutral. In practice, it amounts to the government, rather than competitive markets, selecting which business model best suits the industry.”

Outside the beltway, public interest groups like Public KnowledgeFree Press andSavetheInternet.com have been waging a war of information on this issue against groups like the National Cable & Telecommunications Association (NCTA). In April of 2006, when Public Knowledge posted a YouTube video explaining network neutrality, the NCTA quickly posted aresponse video calling network neutrality “mumbo jumbo.”

How Did the D.C. Circuit Get Involved?

In 2007, several subscribers to Comcast’s high-speed Internet service discovered that Comcast was interfering with their use of peer-to-peer networking applications. In response,Public Knowledge and Free Press filed a complaint with the FCC. After deciding that it had jurisdiction over Comcast’s network management practices, the FCC ruled that Comcast had “significantly impeded consumers’ ability to access the content and use the applications of their choice.” By the time of the FCC’s ruling, because Comcast had already “agreed to adopt a new system for managing bandwidth demand, the Commission simply ordered it to make a set of disclosures describing the details of its new approach and the company’s progress toward implementing it.” To give the order some teeth, the FCC further ruled that “an injunction would automatically issue should Comcast either fail to make the required disclosures or renege on its commitment.”

Comcast then appealed the ruling to the D.C. Circuit.

While the appeal was pending, the FCC released a notice of proposed rulemaking and sought public comment on “the best means of preserving a free and open Internet.” Two days before the end of the public comment period, the D.C. Circuit issued its opinion and the FCC extended the time for the public to weigh in until April 26, 2010.

What Did the D.C. Circuit Rule?

On April 6, 2010, the D.C. Circuit ruled that the FCC lacked jurisdiction to regulate Comcast’s internet service and vacated the FCC’s order. The opinion highlights the fact that in 2002, the FCC essentially hamstrung itself by issuing what continues to be a “still-binding” declaratory ruling (which was later challenged and affirmed by the Supreme Court). The 2002 FCC ruling determined that the internet should be classified as an “information service” rather than a “telecommunications service,” meaning that under the Communications Act of 1934, the FCC now has virtually no authority to regulate it.

What Does this Mean for the FCC?

At this point, the FCC could try to: (1) appeal the D.C. Circuit’s decision; (2) seek more expansive legislation from Congress; and/or (3) attempt to reverse its own 2002 decision and reclassify broadband as a telecommunications service, thereby securing ample legal footing to enforce its plans for network neutrality.

In the meantime, it remains to be seen how ISPs will react knowing that the FCC has (at least temporarily) been held at bay.

(To watch a PBS report of the Court’s ruling and an interesting debate on this topic, click here)