The federal court of appeals for Washington, D.C., on Tuesday upheld a Federal Communications Commission (FCC) rule that internet service providers must treat all web traffic equally. The so-called net neutrality ruling is a stinging defeat to the country’s cable and telecom companies that have fought FCC regulation of any kind.
President Obama urged the FCC in November of 2014 to use its authority under Title II of the Communications Act to declare the internet service providers to be common carriers, in effect prohibiting cable and telecom internet providers from charging customers more to send their bytes through an internet “fast lane.”
FCC chairman Tom Wheeler had earlier in 2014 proposed a more complicated solution that would have allowed the providers to do pretty much whatever they wanted after receiving a blessing from the FCC. Wheeler reversed course after hearing the president’s opinion and wrote up the proposed rules that were upheld in Tuesday’s ruling.
Comcast Corp. (NASDAQ: CMCSA) beat the FCC in court in 2010 after the commission had tried to regulate internet service providers as telecommunications services.
It looked like the FCC was going to be stripped of any real regulatory power in 2014, when Verizon Communications Inc. (NYSE: VZ) won a Supreme Court challenge to an attempt by the FCC to regulate the internet as an information service. In its ruling, however, the Court essentially reminded the FCC that it had the authority to declare the internet a common carrier and if it did so, the decision would likely hold up in court.
The FCC took the hint and proposed the Open Internet Order of 2015, using its authority under Title II to reclassify the internet as a telecommunications service subject to common carrier rules and to regulate internet service providers as common carriers. The court ruling Tuesday upheld both the FCC’s authority and its open internet order.
AT&T Inc. (NYSE: T) already has said it will challenge the ruling in the U.S. Supreme Court and the company will undoubtedly be joined by a host of others. FCC chairman Wheeler said:
Today’s ruling is a victory for consumers and innovators who deserve unfettered access to the entire web, and it ensures the internet remains a platform for unparalleled innovation, free expression and economic growth. After a decade of debate and legal battles, today’s ruling affirms the Commission’s ability to enforce the strongest possible internet protections — both on fixed and mobile networks — that will ensure the Internet remains open, now and in the future.
Because the Supreme Court already has indicated that the FCC has the authority to do what it has done, it would appear that an appeal has little chance of success. But we’ll certainly get a chance to find out.
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