Court Strikes Down Net Neutrality

If the decision stands, it could mean that Internet providers could soon start charging websites like Google and Netflix to reach users.

OREM, UT - FEBRUARY 3: A person walks past a Verizon Store as a sign on a window announces the arrival of Apple's iPhone to Verizon February 3, 2011 in Orem, Utah. The iPhone will be available on Veri...
National Journal
Brendan Sasso
Jan. 14, 2014, 5:50 a.m.

A fed­er­al court on Tues­day over­turned the Fed­er­al Com­mu­nic­a­tions Com­mis­sion’s net­work-neut­ral­ity reg­u­la­tions, deal­ing a blow to the Obama ad­min­is­tra­tion’s ef­fort to en­sure the open­ness of the In­ter­net.

The rules were a cam­paign prom­ise from Obama in 2008 and were the sig­na­ture achieve­ment of FCC Chair­man Ju­li­us Gen­achow­ski, who stepped down last year.

But the three judge pan­el of the D.C. Cir­cuit Court of Ap­peals sided with Ve­r­i­zon’s law­suit, say­ing the FCC ac­ted out­side its au­thor­ity by en­act­ing the rules.

If the de­cision stands, it could mean that In­ter­net pro­viders could soon start char­ging web­sites like Google, Face­book and Net­flix to reach users.

The FCC’s net-neut­ral­ity rules, form­ally called the Open In­ter­net Or­der and ad­op­ted in late 2010, bar In­ter­net ser­vice pro­viders from block­ing web­sites or from dis­crim­in­at­ing against any In­ter­net traffic, ex­cept for reas­on­able net­work man­age­ment.

Sup­port­ers of the rules ar­gue they are crit­ic­al for main­tain­ing a free In­ter­net. They ar­gue that the In­ter­net should be an open plat­form where all web­sites re­ceive equal treat­ment, wheth­er they are large cor­por­ate ser­vices or small start-ups.

But Re­pub­lic­ans and oth­er crit­ics ar­gue the rules un­ne­ces­sar­ily re­strict the busi­ness de­cisions of In­ter­net pro­viders.

After the or­al ar­gu­ment in Septem­ber, many ob­serv­ers an­ti­cip­ated that the D.C. Cir­cuit would strike down at least part of the net neut­ral­ity or­der. But the court went even farther than many ex­pec­ted, throw­ing out both the anti-dis­crim­in­a­tion and anti-block­ing pro­vi­sions.

The judges con­cluded that the FCC was in­ap­pro­pri­ately treat­ing broad­band In­ter­net as a “com­mon car­ri­er” ser­vice. Tra­di­tion­al phone lines, rail­roads, air­lines and oth­er ser­vices are con­sidered com­mon car­ri­ers and must of­fer ser­vice to every­one.

But be­cause the FCC chose to clas­si­fy broad­band In­ter­net as an “in­form­a­tion ser­vice,” it lacks the au­thor­ity to im­pose com­mon car­ri­er ob­lig­a­tions on it, the court ruled.

It will now be up to FCC Chair­man Tom Wheel­er to de­cide how to re­spond to the rul­ing. In ad­di­tion to ap­peal­ing the de­cision to either the full D.C. Cir­cuit or the Su­preme Court, Wheel­er could also de­cide to re­clas­si­fy broad­band as a “tele­com­mu­nic­a­tions ser­vice.”

Al­though the FCC has lim­ited au­thor­ity over “in­form­a­tion ser­vices,” it has wide au­thor­ity over “tele­com­mu­nic­a­tions ser­vices,” in­clud­ing the power to reg­u­late them as com­mon car­ri­ers.

But re­clas­si­fy­ing In­ter­net ser­vice would spark a massive polit­ic­al fight with con­gres­sion­al Re­pub­lic­ans, who fear the FCC would be grant­ing it­self sweep­ing power to over­see the In­ter­net.

“I am com­mit­ted to main­tain­ing our net­works as en­gines for eco­nom­ic growth, test beds for in­nov­at­ive ser­vices and products, and chan­nels for all forms of speech pro­tec­ted by the First Amend­ment,” Wheel­er said in a state­ment.

“We will con­sider all avail­able op­tions, in­clud­ing those for ap­peal, to en­sure that these net­works on which the In­ter­net de­pends con­tin­ue to provide a free and open plat­form for in­nov­a­tion and ex­pres­sion, and op­er­ate in the in­terest of all Amer­ic­ans.”

The de­cision was not quite as bad as it could have been for the FCC. Two of the three judges re­jec­ted Ve­r­i­zon’s ar­gu­ment that the FCC has es­sen­tially no power over broad­band In­ter­net. The court did not ad­dress Ve­r­i­zon’s claim that the rules vi­ol­ate its First Amend­ment free speech rights — an ar­gu­ment that could en­danger a host of fed­er­al reg­u­la­tions.

Ran­dal Milch, Ve­r­i­zon’s gen­er­al coun­sel, is­sued a state­ment say­ing the rul­ing will “not change con­sumers’ abil­ity to ac­cess and use the In­ter­net as they do now.”

“The court’s de­cision will al­low more room for in­nov­a­tion, and con­sumers will have more choices to de­term­ine for them­selves how they ac­cess and ex­per­i­ence the In­ter­net. Ve­r­i­zon has been and re­mains com­mit­ted to the open In­ter­net which provides con­sumers with com­pet­it­ive choices and un­blocked ac­cess to law­ful web­sites and con­tent when, where, and how they want,” Milch said. 

But at the or­al ar­gu­ment in Septem­ber, Ve­r­i­zon at­tor­ney Helgi Walk­er told the judges that if the rules were struck down, the com­pany planned to ex­plore new “com­mer­cial ar­range­ments” such as char­ging web­sites for faster ser­vice.