Net neutrality rules upheld by US appeals court

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A federal appeals court has ruled in favor of fully maintaining the FCC's Open Internet rules, or net neutrality, rejecting claims made by telecom firms that internet service providers should not be subject to public-utility regulation.

In a 2-1 ruling on Tuesday, a three-judge panel of US Court of Appeals for the DC Circuit upheld in full the net neutrality rules passed by the US Federal Communication Commission (FCC) in February 2015. 

The FCC's Open Internet rules classified broadband internet as a public utility to be regulated as such, much to the praise of net neutrality advocates who hailed the FCC action as a victory for preserving an open internet in the US. The decision meant internet service providers (ISPs) will be legally prohibited from blocking, throttling or otherwise discriminating against online traffic from competitors. 

The decision effectively affirms the FCC's ability to regulate ISPs on a more stringent basis than it could before. The court ruled that the internet's place in modern communications and commerce makes it similar to the telephone system of the past.

"Given the tremendous impact third-party internet content has had on our society, it would be hard to deny its dominance in the broadband experience," wrote Judges David Tatel and Sri Srinivasan. "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."

FCC Chairman Tom Wheeler applauded the ruling.

"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," he said in a statement.

The National Cable and Telecommunications Association, an industry group that challenged the FCC's rules, said the decision "is unlikely the last step in this decade-long debate over Internet regulation."

AT&T general counsel David McAtee said the company has "always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal."

The National Cable and Telecommunications Association and others, including AT&T, sued the FCC over the rules in March 2015, saying the guidelines violated administrative law and infringed on the plaintiffs' constitutional rights to decide which content to distribute and how quickly.

The legal challenge to the rules called FCC’s decision an “arbitrary, capricious and an abuse of discretion" and an affront to the providers' First Amendment rights.

The FCC disagreed, saying that telephone operators working the old manual exchanges had no right to decide which calls to connect, either. The FCC also rejected claims by the telecom, cable and wireless industries that the notice of change to the rules — that classified ISPs as common carriers, and made them subject to regulation — was not properly written or distributed in time.

The FCC rule change was supported by the White House. President Barack Obama said the actions “will protect innovation and create a level playing field for the next generation of entrepreneurs.”

“I personally, the position of my administration, as well as a lot of the companies here, is that you don’t want to start getting a differentiation in how accessible the internet is to different users,” Obama said in 2015. “You want to leave it open so the next Google and the next Facebook can succeed.”

In January 2014, the US Court of Appeals for the DC Circuit rejected the FCC’s first attempt to impose net neutrality rules, prompted in part by Verizon’s throttling of Netflix services. The court said the rules were written for common carriers, and that the FCC had not classified the broadband providers as such. The FCC wrote the current guidelines with that ruling in mind.