Appeals Court Fully Upholds FCC's Net Neutrality Rules

from the pop-the-bubbly dept

After months of anticipation the U.S. Court of Appeals for the D.C. Circuit has upheld the FCC's Open Internet Order, an indisputably-massive win for net neutrality advocates. The full court ruling (pdf) supports the FCC's arguments across the board, including the FCC's decision to classify internet providers as common carriers under Title II of the Communications Act. That's not only big for net neutrality, but it solidifies the FCC's authority as it looks to move forward on other pro-consumer initiatives such as the exploration of some relatively basic new privacy protections for broadband users.

Historically the DC Appeals court has been a mixed bag for the FCC, but in this instance the court declared the FCC's neutrality protections rest on solid legal ground from beginning to end, dismantling arguments by the likes of US Telecom, AT&T, and advocacy groups like TechFreedom from stem to stern. That includes industry attempts to prevent the rules from being applied to wireless networks (a split decision whereby fixed-line services were covered by wireless was not was something that had worried many telecom sector consumer advocates).

The court also repeatedly shot down ISP claims that the rules somehow violate their First Amendment rights:

"Because a broadband provider does not— and is not understood by users to—“speak” when providing neutral access to internet content as common carriage, the First Amendment poses no bar to the open internet rules."

The court also fully supports the FCC's contention that thanks to limited competition, broadband providers have plenty of incentive to act anti-competitively against "edge" providers like Netflix, and that this threat required FCC action:

"We also determined that the Commission had “adequately supported and explained its conclusion that, absent rules such as those set forth in the [2010 Open Internet Order], broadband providers represent[ed] a threat to Internet openness and could act in ways that would ultimately inhibit the speed and extent of future broadband deployment.” Id.at 645. For example, the Commission noted that “broadband providers like AT&T and Time Warner have acknowledged that online video aggregators such as Netflix and Hulu compete directly with their own core video subscription service,” id.,and that, even absent direct competition, “[b]roadband providers... have powerful incentives to accept fees from edge providers, either in return for excluding their competitors or for granting them prioritized access to end users,” id.at 645–46.

Ironically, the internet has Verizon to thank for today's ruling. The telco sued to overturn the FCC's flimsy 2010 rules, which didn't cover wireless and quite by design included massive, tractor-trailer-sized loopholes. But in overturning the rules the previous court decisions gave the FCC a path forward -- in effect urging it to reclassify ISPs as common carriers under Title II. It may also be worth noting (again) that despite industry claims that this reclassification would result in telecom Armageddon, the internet and broadband investment (at least in marginally competitive areas) has rumbled along happily.

While a huge win for net neutrality fans everywhere, it's important to understand that the open internet isn't out of the woods yet. The fight could still stumble its way to the Supreme Court. The Presidential election could similarly culminate in a total dismantling of the current FCC and a restocking of the agency with ISP-allies eager to roll back the protections -- as well as the myriad other efforts the FCC's currently engaged in (cable set top box reform).

And as we've noted a few times zero rating and usage caps also play a huge role in determining what constitutes a level playing field for startups and other smaller companies, and the rules don't specifically address such concerns. In other words, we've noted that even while legally sound the FCC's rules have plenty of loopholes allowing ISPs to hinder net neutrality -- just as long as they're somewhat clever about it.

The FCC has stated they'll be looking at the potential anti-competitive ramifications of zero rating and usage caps on a "case by case basis." With the court's full support, hopefully that inquiry will culminate in a harder policy decision sooner rather than later.

Filed Under: broadband, competition, dc circuit, fcc, net neutrality