The United States Court of Appeals for the District of Columbia has vacated (overturned) the Federal Communications Commission (FCC) ‘net neutrality’ rules in the case of Verizon v. FCC.
At the heart of the issue was whether the FCC had authority to prohibit broadband Internet Service Providers such as Verizon or Comcast or others from giving priority to some Internet services, or to adjust fees and speeds to handle data-heavy traffic like video. In essence, the FCC classified broadband services as not falling within “communication services” and, therefore, could not regulate them as common carriers – dooming the anti-discrimination and anti-blocking provisions of the rule.
The FCC sought to compel broadband providers to treat all Internet traffic the same regardless of source, i.e. the broadband provider could not discriminate between sources to favour its own or discriminate against others. The FCC’s power to impose such a requirement and how had been the source of considerable debate and involves very large amounts of money. The decision decision shifts the balance of power between content providers and service providers toward service providers.
Judge Tatel’s summary of the case:
“As we explain in this opinion, the Commission has established that section 706 of the Telecommunications Act of 1996 vests it with affirmative authority to enact measures encouraging the deployment of broadband infrastructure. The Commission, we further hold, has reasonably interpreted section 706 to empower it to promulgate rules governing broadband providers’ treatment of Internet traffic, and its justification for the specific rules at issue here – that they will preserve and facilitate the ‘virtuous circle’ of innovation that has driven the explosive growth of the Internet – is reasonable and supported by substantial evidence. That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission 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.”
House Oversight and Government Reform Committee Chairman Darrell Issa, said he agreed with the decision overruling what he described as the FCC’s “flawed reasoning” on net neutrality. “The government’s restrictions on the free flow of information were a substitution of one concerning approach to address another. Over the last 20 years, the Internet has become a bastion for free speech and innovation. The last thing we need is ill conceived and short-sighted regulation that restricts its continued growth. Over-regulation is certainly not the only significant threat to the Internet. There must be a vigilant effort to defend the free flow of information.”
The American press is reporting the decision as good for operators like Verizon and cable companies and bad for OTT providers like Netflix.