FCC’s Net-Neutrality Rules Upheld by Appeals Court
FCC’s Net-Neutrality Rules Upheld by Appeals Court
Industry appeals to Supreme Court are likely
By JOHN D. MCKINNON and BRENT KENDALL Updated June 14,
2016 5:35 p.m. ET
WASHINGTON—A federal appeals court upheld government
net-neutrality rules Tuesday, handing a defeat to cable and telephone companies
trying to fend off tighter oversight of the consumer broadband business.
The divided ruling by the U.S. Court of Appeals for the
District of Columbia Circuit is a major victory for the Obama administration
and internet companies such as Netflix Inc. and Alphabet Inc.’s Google. They
have favored net-neutrality rules as a way of preventing unfair competition
from internet-service providers.
The court’s sweeping validation of the Federal
Communications Commission rules opens the door to further pending FCC
regulatory steps that cable and wireless firms have resisted. It also sharpens
a growing policy divide between internet firms and the broadband-access
industry.
Telecommunications companies regard the net-neutrality
rules as an example of regulatory overreach by Washington that could stifle
broadband investment in the U.S., and slow development of new networks and
technologies.
Industry appeals to the U.S. Supreme Court appear all but
certain, and the decision eventually could spur congressional action.
Aimed at ensuring a level playing field for the internet,
the FCC net-neutrality rules require internet-access providers, such as Comcast
Corp. or Verizon Communications Inc., to treat all content coming across their
networks equally, without blocking or slowing competitors or speeding up the
content of those who pay.
By a 2-1 vote Tuesday, the court rejected
telecommunications-industry challenges to the rules, which the FCC approved in
early 2015. The same appeals court had twice rejected previous FCC
net-neutrality rules, largely on technical legal grounds.
This time, the appeals panel ruled broadly that the FCC
had established sufficient basis to impose tougher common-carrier regulations
on broadband service because consumers no longer look to internet-service
providers to supply much of the online content they are seeking.
“Over the past two decades, this content has transformed
nearly every aspect of our lives, from profound actions like choosing a leader,
building a career and falling in love to more quotidian ones like hailing a cab
and watching a movie,” the court wrote. “The same assuredly cannot be said” for
broadband providers’ own add-on applications, despite the industry’s arguments.
Underlying the FCC decision was concern about the future
of the open internet. The order came after a public campaign by advocates, and
forceful prodding by President Barack Obama himself.
FCC Chairman Tom Wheeler said Tuesday that the ruling was
“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.”
The 115-page majority opinion was written jointly by
Judges David Tatel and Sri Srinivasan. Judge Tatel, a Clinton appointee, wrote
the appeals court’s previous two opinions that went against the FCC on
net-neutrality. Judge Srinivasan is an Obama appointee who was on the
president’s short list for the Supreme Court vacancy created by the
Februarydeath of Justice Antonin Scalia.
Judge Stephen Williams, a Reagan appointee, dissented,
saying a core part of the FCC’s approach “fails for want of reasoned decision
making.” He said the FCC’s explanation for its new regulatory treatment of
broadband providers “is watery thin and self-contradictory.”
Analyst Craig Moffett of MoffettNathanson said the
biggest surprises in Tuesday’s ruling were the “sweeping” validations of the
FCC’s authority over wireless service, and over interconnection arrangements
between companies deeper in the internet.
Many on Wall Street, and within companies, expected a
mixed ruling that would invalidate parts of the rules, he said.
Industry appeals to the Supreme Court are likely. “We
have always expected for this issue to be decided by the Supreme Court, and we
look forward to participating in that appeal,” said David McAtee, AT&T’s
general counsel.
Verizon executive Craig Silliman said his company
supports efforts to pass “reasonable, bipartisan legislation” addressing the
issues. The National Cable & Telecommunications Association, a cable trade
group, said it wants lawmakers to “renew their efforts to craft meaningful
legislation that can end ongoing uncertainty, promote network investment and
protect consumers.”
Senate Commerce Committee Chairman John Thune (R., S.D.)
said: “Today’s decision is a clear signal that my colleagues and I need to
re-establish Congress’ appropriate role in setting communications policy on a
bipartisan basis.”
Companies say they support the main components of net
neutrality, but view the FCC action as overkill. Industry representatives also
are concerned that the FCC might try to crack down on some emerging industry
practices that open-internet advocates criticize as potentially skirting the
net-neutrality rules such as imposing data caps on consumers, while exempting
provider-sponsored content. FCC officials so far have equivocated.
Tuesday’s ruling also gives the FCC stronger footing to
take other pending steps, such as adopting broad consumer-privacy rules for
internet service providers and new restrictions on TV set-top boxes.
Netflix, which favors the rules, said in a statement: “By
upholding all parts of the FCC’s net-neutrality approach, the appeals court
settled two decades of debate and legal uncertainty by ensuring the internet
remains open to all.”
An Alphabet spokesman endorsed an internet Association
statement supporting the judges’ decision, but declined to comment further.
Alphabet, which owns Google and other tech companies, has
had a more complicated stance on net neutrality. Most of its products and
services run on the internet, and some like YouTube require relatively large
amounts of bandwidth. But Alphabet also is a broadband provider itself with its
high-speed Google Fiber internet service in five U.S. cities.
Still, Alphabet generally has supported net neutrality
and has said that the policy wouldn’t affect Google Fiber.
Comments
Post a Comment