FCC Wins Huge Net Neutrality Victory Over Big Telecom

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An appellate court on Tuesday handed a major victory to the Federal Communications Commission by upholding the agency's watershed Open Internet Order, which ensures equal access to the Internet.

By a 2-1 vote, the United States Court of Appeals for the District of Columbia Circuit upheld the FCC's right to impose Net neutrality rules that essentially prevent big telecom and broadband companies from slowing down, speeding up, or blocking service based on content providers' market power or willingness to pay.

"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 unparallelled innovation, free expression and economic growth," said FCC Chairman Tom Wheeler.

The plaintiffs almost certainly will appeal to the U.S. Supreme Court, according to FCC Commissioner Mike O'Rielly, who criticized the ruling.

"We all will rue the day the commission was confirmed to have nearly unmitigated power over the Internet -- and all based on unsubstantiated, imaginary 'harms,'" he wrote.

U.S. Telecom, which led the suit against the FCC, will leave all legal options on the table for a possible challenge, said President Walter McCormick, who expressed disappointment in the decision.

"Two judges on the court have unfortunately failed to recognize the significant legal failings of the Federal Communication Commission's decision to regulate the Internet as a public utility," he maintained, "leaving in place regulation that we believe will replace a consumer-driven Internet with a government-run Internet, threatening investment and innovation to come."

Other telecom and broadband firms have indicated they intend to pursue a reversal.

"We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal," said David McAtee, senior executive vice president at AT&T, which claims to be the world's largest communications firm.

Its high-speed mobile Internet network covers 365 million people in North America and 25 million video subscribers in the U.S., including DirecTV customers.

The major broadband companies have complained of being at a disadvantage because they have to lay out billions of dollars to develop high-speed networks, which smaller, outside competitors then get to share, noted telecom analyst Jeff Kagan.

Many of those companies "want to ride that investment at no cost," he told the E-Commerce Times. "If carriers decided to slow down their investment because it wasn't worth their while any longer, that would be a real problem."

The fight is likely to drag on for years, Kagan predicted. "Stay tuned for the next decade of legal battles."

In the eyes of Net neutrality proponents, the FCC's latest victory is critical to maintaining an open and fair system that allows communities of different incomes and content providers of different sizes to get access to high-speed Internet. The fear has been that big telecom providers would be able to bias their data speeds or content quality toward the most powerful players as one way to recoup the costs of laying down cables to different communities of various economic status.

"The rules will keep providers from blocking or slowing traffic and stifling innovation by speeding up traffic for those who pay," said Corynne McSherry, legal director of the Electronic Frontier Foundation, one of a number of open technology advocates that urged the FCC to defend an open Internet.

The industry is likely not only to appeal the decision, but also to attempt to persuade Congress to upend the FCC's rules through legislative means, McSherry added.

The ruling will ensure that all parties will be protected -- both in terms of underserved communities having access to service and smaller firms competing against large broadband providers, according to the Open Technology Institute, another group that intervened in the case last year.

"The court's decision recognizes the value of an open platform over which all voices have a space and ideas can flourish -- where even the smallest startups can grow, all users access the content of their choosing, and communities can organize without interference from their ISPs," said Sarah J. Morris, senior policy counsel at OTI.

"This decision provides a major victory for advocates of net neutrality," said William K. Norton, an associate at Baker Donelson.

"In 2002, the FCC decided not to make Internet providers subject to common carrier requirements under its Brand X decision. It took public interest groups to petition the FCC to stop Comcast from discriminating and degrading Internet traffic in 2008 to get the FCC to consider Net neutrality regulations," he told the E-Commerce Times.

"When the Open Internet rules were struck down in 2014, it was seen as a major blow to the Net neutrality movement. The FCC's response in 2015 to cover broadband under Title II was a bold move that actually gave it more authority to regulate the Internet than the Open Internet rules that were struck down the year before," he pointed out. "So I think many were concerned that that decision would be struck down, as well."

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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