Net neutrality goes on trial

A federal court is set to hear arguments on Monday in a case that could shape the future of the Internet.

Lawyers for the Federal Communications Commission will defend the agency's controversial net neutrality regulations against a legal challenge from Verizon before a three-judge panel of the D.C. Circuit Court of Appeals.

Supporters of the rules say they preserve a free and open Internet, but opponents argue they are an unnecessary burden on businesses and amount to government control of the Internet.

The outcome of the case will also have wide-ranging implications for the FCC's ability to impose any regulations on broadband Internet service.

"If you want the Internet to become a cable system, then you shouldn't care about this case. If you like it when some big multinational corporation controls what you see and where you see it and when you see it, then you shouldn't care," said Gigi Sohn, president of consumer advocacy group Public Knowledge, which has sided with the FCC in the case. "But if you like the fact that you control your Internet experience, and you want it to stay that way, then you should care."

The regulations, formally known as the "Open Internet Order," were one of the defining achievements of FCC Chairman Julius Genachowski, who stepped down earlier this year. The order, enacted in late 2010 over the objections of Republican commissioners, requires Internet service providers to treat traffic to all websites equally. Cellphone carriers are barred from blocking access to lawful websites or discriminating against services that compete with their own offerings.

The purpose of the rules is to prevent Internet providers from speeding up access to websites they own or to sites that pay special fees. There is also concern that, without the rules, Internet providers could slow down or block particular sites. Supporters of the rules argue that all websites should be treated equally, whether they are large corporate services or small personal blogs.

The rules are strongly supported by Web companies like Google, Facebook and Netflix, which fear that Internet providers could start charging them to reach customers. A lawyer for those companies and other supporters of the rules will argue briefly before the court on Monday.

But critics argue the regulations are preventing Internet providers from experimenting with promising new business models.

"Should the FCC win, I think you'd see a lot less destructive risk-taking," Robert McDowell, a former Republican FCC commissioner who voted against the net neutrality rules in 2010, said in an interview.

He acknowledged that some forms of Internet discrimination could harm consumers, but he argued that existing antitrust and consumer protection laws already prohibit such behavior.

McDowell also claimed that the regulations undermine the ability of the United States to credibly oppose international efforts to control the Internet.

"The proponents of Internet neutrality would say we're just trying to keep the Internet open and free. But guess what, that's also what proponents of Internet regulation in Russia and China say," McDowell said.

Verizon will argue on Monday that Congress never granted the FCC the authority to regulate broadband Internet service. The company will also claim that the rules are "arbitrary and capricious" and violate the company's constitutional rights.

"Broadband networks are the modern-day microphone by which their owners engage in First Amendment speech," Verizon wrote in a filing last year.

The FCC’s case will hinge on whether the judges accept its argument that the rules promote investment in broadband service, an area where the agency has explicit authority.

Supporters and critics of the rules agree that there is much more at stake in the case than just net neutrality. The court's ruling could determine whether the FCC has any power to oversee broadband Internet.

"It's a much broader question, in my opinion, about the FCC's relevance when it comes to the communications system of the 21st century," Sohn said.

She argued that if Verizon wins, it could leave the FCC powerless to protect online privacy, ensure universal Internet access or punish unfair billing practices.

But conservatives worry that if the FCC wins, there is nothing to stop the agency from micromanaging the business practices of Internet companies.

"If they can issue this rule, they can do anything," Berin Szoka, president of libertarian think tank TechFreedom, said. "There is no real limit to their authority."

He argued that the FCC could regulate the price of Internet service or even phones.

"If the FCC were to win this case, its power would be unbridled and limitless, so as long as it justified any efforts in the context of trying to help broadband," McDowell warned.

Szoka predicted that the FCC has only a 20- or 25-percent chance of winning the case.

Sohn acknowledged that the D.C. Circuit has historically been hostile to the FCC, but she argued that a recent Supreme Court decision giving regulatory agencies more latitude in interpreting their own authority and a favorable three-judge panel bode well for the FCC.

"I still think they can win this case," she said. "I'm optimistic."

-This post has been updated to correct the time of posting.