Court nixes Obama's net neutrality

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A federal appeals court on Tuesday struck down regulations that require Internet providers to treat all traffic the same, dealing a potentially fatal blow to President Obama’s push for “net neutrality.”

Opponents of the rules, led by plaintiff Verizon, hailed the decision from the D.C. Circuit Court of Appeals as a victory over government meddling in the marketplace. 

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“The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet,” said Randal Milch, Verizon’s executive vice president of public policy. 

Rep. Marsha Blackburn (R-Tenn.), one of the biggest opponents of the Federal Communications Commission (FCC) rules in Congress, applauded the court for striking down “socialistic regulations.” 

The powerful D.C. court overturned provisions that keep Internet providers from blocking or slowing down access to certain websites. With the rules no longer in place, telecom companies will be free to charge popular sites like Google, Facebook and Netflix for different speeds. 

With one stroke, the court erased the central achievement of former FCC Chairman Julius Genachowski, who labored through Obama’s first term to fulfill a 2008 campaign pledge. 

The White House said the president “remains committed to an open Internet” that allows companies “to compete on a level playing field.” 

“We remain committed to working with the Federal Communications Commission, Congress, and the private sector to preserve a free and open Internet,” the White House said.

The ruling leaves the FCC at a crossroads, and presents new leader Tom Wheeler with a wrenching decision. 

While the court affirmed the agency’s power to regulate the Internet, proposing new net neutrality rules could usher in a bruising, protracted fight with telecom companies that could crowd out the rest of his agenda.

Wheeler vowed to “consider all available options, including those for appeal.”

“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,” Wheeler said.

The D.C. Circuit Court of Appeals ruling had a silver lining for the FCC, as the court did not accept Verizon’s main argument against the regulations — namely, that the FCC does not have authority to regulate Internet providers.

Instead, the court found that the FCC did not adequately justify its authority to regulate in this area.

The FCC decided years ago to classify Internet access as an “information service” rather than a “telecommunications service,” a classification that allows for more regulatory intervention and includes traditional telephone companies.

The court said the commission has authority over Internet providers, but violated self-imposed boundaries by regulating Internet providers as heavily as it regulates telephone companies.

Supporters of net neutrality took comfort in that aspect of the ruling, and said the FCC is now free to pursue regulations that can pass muster in court.

“I am pleased that the court recognized that the FCC has the authority to issue necessary consumer protection rules for broadband networks,” Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.) said in a statement. 

Rockefeller urged the agency “to consider all viable options to accomplish” its goals of expanding Internet access “and to make sure that that both consumers and competition are protected through a free and open Internet.” 

The FCC “clearly has the authority to protect consumers and preserve an open Internet — as acknowledged by the D.C. Circuit Court,” Sen. Richard Blumenthal (D-Conn.) said in a statement. “I urge the Commission to use that authority aggressively and responsibly.” 

What Wheeler does next is an open question.  

Tim Wu, a professor at Columbia Law School, said that Wheeler “has to act” after the court struck down provisions that keep Internet providers from both blocking and slowing access to websites. 

“It’s just a completely different world” if Internet providers are able to throttle traffic to certain websites and services, such as Netflix, Skype and YouTube, Wu said. 

But Berin Szoka, the president of TechFreedom, said Wheeler would pay a heavy price for resurrecting net neutrality. 

“The issue would preoccupy not only Wheeler’s chairmanship but probably the entire agency for the next decade,” Szoka said. 

Wheeler is certain to come under pressure from Internet companies, which have pushed net neutrality with an almost religious fervor. Beyond their business interests, they argue the future of Internet freedom depends on a system where sites are on equal footing. 

The Computer and Communications Industry Association, which represents Google, Microsoft and Facebook, called on the FCC to reclassify Internet access to and pursue new regulations. 

“Now the FCC has the chance to reclaim its fundamental authority over broadband Internet access as the critical network infrastructure of the 21st Century,” Cathy Sloan, the association’s vice president, said in a statement. “The federal appeals court decision is an open invitation to the FCC.”

And while Internet providers celebrate a major victory Tuesday, they tried to reassure customers that nothing would change as a result of the ruling.

Milch said end of net neutrality “will not change consumers’ ability to access and use the Internet as they do now.”

Broadband for America — which represents major Internet providers including Verizon, AT&T, Comcast, Cablevision and Time Warner Cable — reiterated its members’ commitments to an open Internet.

“We have built our Internet services on this foundation of openness. Today’s decision does not change that commitment,” the group said in a statement.  

Advocacy groups scoffed at those pronouncements, however, and said the providers will soon be constructing “fast and slow” lanes on the Web.

 “They’ll establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else,” said Craig Aaron, president and CEO of the advocacy group Free Press.

— This story was last updated at 8:23 p.m.