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.

{{ BIZOBJ (video: 4647) }}

What We're Following See More »
GOP Budget Chiefs Won’t Invite Administration to Testify
1 days ago

The administration will release its 2017 budget blueprint tomorrow, but the House and Senate budget committees won’t be inviting anyone from the White House to come talk about it. “The chairmen of the House and Senate Budget committees released a joint statement saying it simply wasn’t worth their time” to hear from OMB Director Shaun Donovan. Accusing the members of pulling a “Donald Trump,” White House spokesman Josh Earnest said the move “raises some questions about how confident they are about the kinds of arguments that they could make.”

Snowstorm Could Impact Primary Turnout
1 days ago

A snowstorm is supposed to hit New Hampshire today and “linger into Primary Tuesday.” GOP consultant Ron Kaufman said lower turnout should help candidates who have spent a lot of time in the state tending to retail politicking. Donald Trump “has acknowledged that he needs to step up his ground-game, and a heavy snowfall could depress his figures relative to more organized candidates.”

A Shake-Up in the Offing in the Clinton Camp?
1 days ago

Anticipating a primary loss in New Hampshire on Tuesday, Hillary and Bill Clinton “are considering staffing and strategy changes” to their campaign. Sources tell Politico that the Clintons are likely to layer over top officials with experienced talent, rather than fire their staff en masse.

Trump Is Still Ahead, but Who’s in Second?
16 hours ago

We may not be talking about New Hampshire primary polls for another three-and-a-half years, so here goes:

  • American Research Group’s tracking poll has Donald Trump in the lead with 30% support, followed by Marco Rubio and John Kasich tying for second place at 16%. On the Democratic side, Bernie Sanders leads Hillary Clinton 53%-41%.
  • The 7 News/UMass Lowell tracking poll has Trump way out front with 34%, followed by Rubio and Ted Cruz with 13% apiece. Among the Democrats, Sanders is in front 56%-40%.
  • A Gravis poll puts Trump ahead with 28%, followed by Kasich with 17% and Rubio with 15%.
CNN Calls the Primary for Sanders and Trump
3 hours ago

Well that didn’t take long. CNN has already declared Bernie Sanders and Donald Trump the winners of the New Hampshire primary, leaving the rest of the candidates to fight for the scraps. Five minutes later, the Associated Press echoed CNN’s call.