A sharply divided Federal Communications Commission said Comcast Corp. “unduly interfered” with subscribers’ Internet access and that the biggest U.S. cable operator illegally discriminated when it cut off downloads from peer-to peer-file-sharing Web sites last year.

Consumer groups quickly labeled the action a landmark decision in the debate about the rights consumers have to get Internet content without discrimination—so called network neutrality.

Some industry groups charged the FCC was overstepping its legal authority.

Comcast, which was not fined, expressed concern about whether it had received proper due process and said it may appeal the decision.

The commission by a 3 to 2 majority found that Comcast went too far in attempting to reduce network congestion and effectively discriminated between the types of content moving across its Internet access lines.

“The commission concluded that Comcast's network management practices discriminate among applications rather than treating all equally and are inconsistent with the concept of an open and accessible Internet,” the commission said in a statement.

Two consumer groups, Free Press and Public Knowledge, last year complained to the FCC that Comcast, in a bid to reduce network traffic between its subscribers and peer-to-peer Web sites like BitTorrent, had interrupted downloads.

The groups complained that while the interference was done in the name of network management, Comcast actually blocked downloads at times there were no network traffic woes. They also said that Comcast blocked peer to peer sites at times when other sites responsible for heavy traffic weren’t touched.

The complaint prompted a donnybrook at the FCC about whether the agency should finally take action to ensure network neutrality.

Today the commission majority said it should, with FCC chairman Kevin J. Martin comparing what transpired to the Postal Service opening mail and sending it back without consumers seeing it. He was joined by Michael J. Copps and Jonathan Adelstein.

The other two commissioners, Deborah Taylor Tate and Robert McDowell, however, said the government has little authority to influence how private companies manage their network. They said that the FCC overstepped its authority, with Ms. Tate noting that Comcast should have disclosed its practices to its subscribers.

After the Associated Press publicized the blocking last year, Comcast agreed to change the way it handles network management.

In a statement today, Sena Fitzmaurice, Comcast’s senior director for corporate communications and government affairs, said the company was gratified there was no fine but disappointed in the commission’s conclusion.

“We believe that our network management choices were reasonable, wholly consistent with industry practices and that we did not block access to Web sites or online applications, including peer-to-peer service,” she said. “We also believe that the Commission’s order raises significant due process concerns and a variety of substantive legal questions. “We are considering all our legal options and are disappointed that the commission rejected our attempts to settle this issue without further delays.”

(Editor: Baumann)