(REUTERS/Joshua Lott)

One of the first businesses to invoke the government's net neutrality rules against an Internet provider has just lost his bid for federal intervention.

Commercial Network Services, a San Diego-based company that uses a series of Web cams to broadcast live images of the city to remote viewers, told the Federal Communications Commission in June that Time Warner Cable was hindering its ability to reach consumers with its video traffic.

CNS's chief executive, Barry Bahrami, argued that Time Warner Cable was demanding an unacceptable toll to transport the video traffic to viewers' computers and mobile devices, even as other Internet providers were carrying that content for free. But legal experts cast doubts on Bahrami's complaint because the net neutrality rules don't explicitly prohibit companies from negotiating private carriage agreements for so-called "interconnection." They merely give the FCC the ability to probe deals that it finds suspicious and potentially anticompetitive.

All that culminated recently in an e-mailed note from the FCC to CNS, according to Bahrami, explaining that "we regret that you were not satisfied with attempts by FCC staff to facilitate a more satisfactory resolution."

Despite the apparent rejection, CNS is considering escalating the issue as a formal legal complaint.

"Time Warner Cable viewers are still unable to watch the San Diego Web Cam," Bahrami said in an e-mail. "We have viewers from Russia, Slovenia, Japan… really all over the world watching in 720p … But here in San Diego, if you live north of the I8, you are out of luck because TWC demands payment [from us]."

Whether Bahrami will have better luck next time is unclear. Time Warner Cable said it was pleased with the apparent decision.

"As we’ve said before, Time Warner Cable’s interconnection practices are not only ‘just and reasonable’ as required by the FCC, but consistent with the practices of all major ISPs and well-established industry standards," the company said in a statement.

A spokesperson for the FCC didn't immediately respond to a request for comment.