A major win for the agency, and a blow to the cable industry
In a ruling on Tuesday morning, a Washington D.C. appeals court upheld Federal Communication Commission rules that require internet service providers to obey so-called “net neutrality” principles. In a 2-1 decision, the court rejected claims by the cable industry that the rules, passed by the FCC in early 2015, exceeded the agency’s power.
The outcome is a win for companies like Netflix, which have argued that the rules are necessary to stop internet companies from “throttling” their content, and for consumer groups who have argued that ISPs should not be able to use their control over distribution pipes to control what viewers watch.
Meanwhile, the ruling is a blow for companies like Verizon, AT&T and Comcast, which have argued the so-called “Title II rules,” which reclassified internet providers as common carriers, are an undue regulatory burden.
“Today’s ruling is 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,” said FCC Chairman Tom Wheeler in a statement. “After a decade of debate and legal battles, today’s ruling affirms the Commission’s ability to enforce the strongest possible internet protections – both on fixed and mobile networks – that will ensure the internet remains open, now and in the future.”
The cable industry has already indicated it will appeal the ruling, which was issued by the U.S. Court of Appeals for the District of Columbia Circuit.
“We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal,” said David McAtee, AT&T Senior Executive Vice President and General Counsel, in a statement.
The 184-page decision (which you can read here) came more than six months since a closely watched court hearing last December. The majority opinion was written by Judges David Tatel and Sri Srinivasan, while Judge Stephen Williams dissented in part.
The case arose after the same court struck down an earlier set of net neutrality rules in 2014, on the grounds the FCC did not have the legal authority to impose the rules. In response, the agency reclassified internet providers as “common carriers,” similar to phone companies, in order to impose the new rules.
Netflix, which has in the past complained that internet companies slowed down its content as a competitive tactic, hailed the decision.
“Today’s appeals court decision underscores what’s possible when millions of consumers unite to be heard and government officials listen,” said the company in a statement. “The Court went out of its way to define interconnection as a central part of Net Neutrality, ensuring that providers like Netflix will be able to reach consumers without ISP interference.”
As of Tuesday mid-day, the ruling did not appear to have affected the share price of content sites like Netflix, or interent providers like Charter or Comcast.
Ruling applies to mobile, no free speech violation
The ruling was a sweeping one in favor of the FCC, as it also affirmed that the net neutrality rules should apply to mobile phone networks as well.
“[T]he Commission permissibly found that mobile broadband— like all broadband—is a telecommunications service subject to common carrier regulation under Title II of the Communications Act,” said the ruling, adding that it rejected a challenge by the cable industry that sought to differentiate mobile services based on certain phrases in the Telecommunications Act.
The court likewise rejected a contention by the cable industry that the net neutrality rules stifled free speech by telling internet companies how to communicate, saying their service was not like media companies.
“In contrast to newspapers and cable companies, the exercise of editorial discretion is entirely absent with respect to broadband providers subject to the Order. Unlike with the printed page and cable technology, broadband providers face no such constraints limiting the range of potential content they can make available to subscribers.”
While the the Supreme Court might take up the matter next year, and Congress can attempt to undo the rules, Thursday’s decision effectively confirms net neutrality is the law of the land for the foreseeable future.
The White House, which has been a vocal supporter of net neutrality, issued a statement on Tuesday afternoon praising the ruling.
“Today’s ruling is a victory for the open, fair, and free Internet as we know it today – one that remains open to innovation and economic growth, without service providers serving as paid gatekeepers,” it read in part.
This story was updated several times