A court of appeals in Washington, D.C. struck down the FCC’s net neutrality rules on Tuesday, arguing that its restrictions to “treat all Internet traffic the same regardless of source” have no legal merit.
According to a report by PCWorld, the root of the appeal court’s decision is that unlike phone companies, broadband providers aren’t classified as common carriers. The ruling said that since the FCC “has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”
Verizon took the FCC to appeals court over the rules at the beginning of November, arguing that the FCC does not have the authority to treat it as a common carrier or a utility. It should be regulated as an information service, which is lightly regulated in comparison.
The decision is a victory for Verizon and other broadband providers as certain customers will pay more to receive preferential treatment and faster speeds. The concern that net neutrality advocates have is that this could create an environment where smaller companies are unable to compete, a very bad move for innovation and the Internet. The issue could also have negative implications for hosting providers and their customers.
The FCC will still be able to require broadband providers to disclose how data is being managed on their network, which may offer some transparency into the treatment certain types of traffic gets.
“The D.C. Circuit has correctly held that ‘Section 706 . . . vests [the Commission] with affirmative authority to enact measures encouraging the deployment of broadband infrastructure’ and therefore may ‘promulgate rules governing broadband providers’ treatment of Internet traffic,’” FCC Chairman Thomas Wheeler said in a statement. “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. 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.”
Recently, AT&T introduced bandwidth sponsorship, a service for businesses to pay for the bandwidth so that it does not count against the end user’s data usage. Some net neutrality advocates said that although AT&T ensures data sponsorship will not affect the speed or performance of delivery, it is still a problematic issue.