IDG News Service — The U.S. Federal Communications Commission is in legal limbo after a U.S. appellate court ruling Tuesday tossed out the agency's enforcement of network neutrality principles on broadband provider Comcast (CMCSA).

Even as the agency moves forward with a rulemaking proceeding to formalize a set of net neutrality rules, the court's decision raises serious questions about the FCC's ability to create regulations in areas where its authority is not spelled out in law. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the FCC did not have the legal authority under a set of net neutrality principles adopted in 2005 to stop Comcast from throttling BitTorrent peer-to-peer traffic.

There seems to be widespread disagreement among telecom legal experts and FCC analysts about the wider impact of the ruling, but several have said the court's decision raises huge doubts about the FCC's authority to create any rules related to broadband service or to implement large portions of a national broadband plan released last month.

"The ruling clearly prevents the commission's attempt to grant itself vast new powers never authorized by Congress with respect to regulating [broadband] information services," said Phil Kerpen, vice president at Americans for Prosperity, a conservative advocacy group.

Others disagree. The case before the D.C. court dealt with a narrow question of whether the FCC had the authority to enforce a set of net neutrality policy principles, not a broader question whether the agency has authority to make rules affecting the broadband industry, said one person with inside knowledge of the plaintiff's arguments in the case.

The court ruled that the FCC's actions were improper, but "that doesn't mean there is some other action the court wouldn't uphold," the insider said.

The court ruling raises questions about what the FCC will do next. The agency did not respond to a request for comment about the ruling and the FCC's future plans. But the agency has several options, all with potential problems:

-- It could move forward with its net neutrality rulemaking proceeding, and attempt to come up with a legal argument for its authority that would stand up in court.

-- It could go to Congress and ask for new authority or ask lawmakers to pass a net neutrality law.

-- It could reclassify broadband as a service that's subject to broad regulation by the agency and brace itself for a huge legal battle.

-- It could do nothing, punt on net neutrality rules and hope that any future attempts to create rules affecting the broadband industry aren't challenged, or are upheld, in court.

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