FCC to regulate the Internet after all?

While network neutrality is a good goal, I don't see how to achieve it by turning the Internet into a totalitarian domain. It would be like achieving free speech by having the FCC constantly monitoring everyone. Unfortunately, the FCC is moving to do just this.

Part of my curiosity is exactly how the FCC has the jurisdiction to do this. The last I heard, network neutrality was voted down in Congress. Did it come up again with no one noticing, or is the FCC just reaching again? If I had known that legislation had come back to life I would have taken part in the debate.

Separately, the reason the FCC has chosen is just as weak as any of the others that have been put forward:

FCC Chairman Julius Genachowski said the rules are needed to ensure that broadband subscribers can access all legal Web sites and services, including Internet calling applications and video sites that compete with the broadband companies' core businesses.

Let's count the problems:

1. Web sites are vitally interested in letting customers get to them. There are powerful forces in play already that will prevent that from happening. Skype is doing rather well, without the FCC's help. It's not even an American company!
   
2. This problem hasn't happened before.
   
3. Very powerful companies have tried. AOL, Prodigy, Compuserve, and MSN all tried to limit their users' access to the general Internet, and their customers simply left.
   
4. There are credible attempts to divide up the Internet today, but the FCC isn't addressing them. Think of walled gardens like Facebook or Apple's iTunes. The FCC is fighting the last decade's battle.
   

Legal systems are very complicated programs run by millions of devious agents. If they are to do what we want from them, they have to be simple and straighforward, and even then, we might not get what we tried for.