The Soul of Kevin Martin

Declan McCullagh takes a good look at the legal and political issues around the FCC’s pending wrist-slap of broadband carrier Comcast in FCC probably can’t police Comcast’s BitTorrent throttling:

If FCC enforcement against Comcast is illegal, why would Chairman Martin call Friday’s meeting? Only he knows for certain, but one explanation is that if the FCC is embarrassed when slapped down by a federal appeals court two years hence, Martin will have long since departed to a lucrative partnership at a law firm or private equity firm. (This is a customary exit path for FCC chairmen: Newton Minow went to Sidley Austin; William Kennard went to the Carlyle Group; James Quello went to Wiley Rein, named for ex-chairman Richard Wiley, where equity partners made an average of $4.4 million in 2006.)

Friday’s ruling may also end up as a cautionary tale for AT&T and Verizon, which as recently as last month seemed to be egging on the FCC to take action against their cable industry rival. But the same activists that have targeted Comcast before the FCC no doubt realize that AT&T’s terms of service limit “peer-to-peer applications”; Verizon Wireless flatly prohibits them; Verizon’s Fios service blocks incoming port 80. Another term for those network management practices is “Net neutrality violations.”

Motivation is interesting, and Declan’s probably right that Martin has a trick up his sleeve. My concern about this action is the precedent it would set. If the FCC is allowed to impose any madeup-on-the-spot rule that it fancies on companies with multi-billion dollar infrastructure investments, I can’t see the financial markets being too willing to part with the cash to engage in the continual upgrade that broadband networks require. The financial markets can tolerate many kinds of risk, but the political or career ambitions of Young Turk commissioners with the power to impose arbitrary sanctions isn’t one of them. Martin should sober up and look at the big picture instead of pulling the trigger on Comcast.

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