This week, at long last, the Federal Communications Commission explained in court why telco criticisms of its Net neutrality regulations are "baseless." Nonetheless, it has become crystal clear that the FCC's rules against online discrimination - perhaps the signature technology policy move of Barack Obama's presidency - are in the industry's crosshairs.

The Net neutrality regulations adopted by the FCC on a party-line vote just before Christmas 2010 represented the administration's attempt to find middle ground. Chairman Julius Genachowski had floated an idea variously called "The Third Way" or "Title II Lite." His plan proposed a historic, black-and-white reclassification of broadband Internet service as a telecommunications service under the Communications Act of 1934, but with caveats: the FCC would "forebear" on using all the regulatory muscle that it generally holds over common carriers, like the ability to impose sharing requirements. But Genachowski, facing a tsunami of industry disapproval, retreated to a far more modest jurisdiction over broadband. That's what Verizon now dismisses in court as the FCC's attempt to "conjure a role for itself."

Genachowski's Net neutrality rules were a tenuous play from the start, considering the Comcast v. FCC decision on BitTorrent throttling some months earlier, which challenged the commission's "ancillary authority" to regulate broadband. Verizon said it would go to court. It has.

Meanwhile, AT&T responded in public with a what's done is done air. In a hearing last March, a company executive quietly seconded a member of Congress who suggested the rules would "require no change in the business plans of AT&T." We're beginning to see why. In the run up to this week's expected release of iOS 6, AT&T has said that it will disable FaceTime, the iPhone's video chat feature, over its cellular networks except for subscribers to its pricey Mobile Share plans. Why? An uncertainty about data load, the company said. And if the FCC can make up the rules as it goes along, AT&T seems to be arguing, then so can we.

Blocking FaceTime doesn't violate Net neutrality regs, a company rep wrote, because the app is "preloaded." That's a distinction not found within the four corners of the FCC's neutrality rules. But it buys the company a little wiggle room.

Genachowski's Christmas surprise earned him the ire of critics, some of whom see an inevitability to today's challenges. "This is a mess of the commission's own making," said Derek Turner, research director of Free Press, a vociferous proponent of net neutrality regulations. Congress, it's worth noting, wasn't able to craft the FCC any clearer authority. But rather than establishing that the Internet is both the digital bits that make up its content and the (highly regulable) pipes that those bits travel along, Genachowski tried to make do with a far less coherent jurisdiction. And prodded by industry, he carved out exemptions for mobile Internet, which is exactly how more and more Americans are going online. Companies can't block competitive applications, and they have to be transparent about what they do do. But that leaves gaps big enough for AT&T to drive its FaceTime policy through.

That the FCC would claim jurisdiction over broadband, today's dominant communications medium, scares the bejeebus out of some people. Same goes for the idea that it wouldn't. The agency tried to calm roiling waters with a tempered approach to Net neutrality. But that produced only a momentary peace. Verizon is challenging it in court. AT&T is challenging it in the marketplace. What is the government's role in regulating broadband networks? More unsettled than ever. And that doesn't benefit much of anyone.