Net Neutrality Case Heats Up As FCC Seeks Internet Regulation
September 10, 2013

Net Neutrality Case Heats Up As FCC Seeks Internet Regulation

redOrbit Staff & Wire Reports - Your Universe Online

Net neutrality takes center stage again this week as the US Court of Appeals for the District of Columbia Circuit began hearing oral arguments on Monday challenging the Federal Communications Commission’s attempt to regulate the Internet.

At issue in the case, which pits Verizon Communications against the FCC, is whether the commission has the right to step in and regulate Internet-related matters. A three-judge panel will determine the validity of the FCC’s 2010 Open Internet Order, which established rules guiding Internet providers. The ruling could ultimately redefine the economics of the Internet and the way it is overseen by the federal government.

The case is the latest in years-long battle over net neutrality – the idea that broadband Internet providers should not be able to play favorites among the different types of traffic transiting their networks.

When the FCC issued its net neutrality rules in December 2010, Verizon quickly challenged the directives on constitutional grounds, arguing that the FCC lacked the authority to issue such rules. Verizon says it does not, and wants the rules struck down.

Helgi Walker, a lawyer for the telecom giant, told the three-judge panel that the FCC rules prohibiting broadband providers from selectively blocking or slowing Web traffic go beyond the agency’s authority granted by the US Congress in the Telecommunications Act of 1996, and prevent Verizon from charging Websites for bringing traffic to them.

“But for these rules, we could be pursuing those types of commercial arrangements. My client wants freedom to explore that,” she said in a statement gleaned by PCWorld.

Congress did not give the FCC the authority to regulate broadband in the same way it regulates so-called common-carrier telephone networks, and the commission had long stayed away from broadband regulation before passing the net neutrality rules, Walker told the judges.

The FCC found new authority to regulate broadband more than a decade after Congress passed the Telecom Act, she argued. “Poof, it discovers direct authority that apparently was hiding in plain sight.”

But the FCC says it does have the authority to set such rules, and argues they are necessary to keep Internet providers in check.

FCC general counsel Sean Lev told the judges that Congress, in section 706 of the Telecom Act, gave the FCC authority to encourage and accelerate broadband deployment within the entire country. The 2010 net neutrality rules remove barriers to investment in Internet services and promote competition, as section 706 instructs, he told the judges.

Verizon should not be able to charge its consumer broadband customers, then “extort” additional fees from Websites that the provider’s customers want to read, Lev argued.

Lev also denied Verizon’s claim that the FCC’s net neutrality rules violate its First Amendment free speech rights, arguing that Verizon is free to publish its own Websites, but isn’t acting as a speaker when carrying customers’ traffic.

Judge David Tatel, a Democrat who sits on the three-judge panel, repeatedly asked lawyers for both sides if the court could uphold the FCC’s anti-blocking rule, which prevents broadband providers from completely blocking their customers from visiting some Websites, while rejecting the agency’s anti-discrimination rule, which prevents Internet providers from giving some Web traffic preferential treatment.

The anti-discrimination rule seems to be a common carrier-rule, he said.

Judge Tatel also appeared skeptical of some of the FCC’s arguments, asking Lev why Verizon, acting as a consumer broadband provider, should deliver service to Websites for free.

But Lev argued that those Websites pay their own broadband fees, and are “not requesting service from Verizon.”

Tatel and Judge Laurence Silberman asked several questions about section 706 of the Telecom Act, with Tatel noting that the section gives the FCC broad authority to encourage broadband deployment and competition.

But Walker argued that the FCC was grasping for legal authority for the net neutrality rules when citing section 706, saying it's a stretch to suggest that net neutrality rules encourage broadband deployment, when they may in fact do the opposite.

Citing section 706 is “an after-the-fact rationalization,” she told the judges. “It’s bootstrapping.”

The deregulatory language of section 706 “can’t bear the weight of these rules,” she said.

In response to Tatel asking several times about whether the court should uphold the anti-blocking rule but reject the antidiscrimination rule, Lev suggested the rules don’t explicitly prevent Internet providers from entering into priority traffic agreements with Websites. The 2010 net neutrality rules even said such commercial agreements would raise significant concerns, he added.

Tatel noted that much of the drive for net neutrality rules was to prevent Internet providers from charging Websites.

If pay-for-priority agreements are allowed, “then I don’t understand why the FCC approved these rules,” he said.

Walker urged the court to reject the FCC’s entire set of net neutrality rules, saying the anti-blocking and anti-discrimination rules work together.

“For the court to essentially blue pencil this order would be outside this court’s common practice,” she argued.

While it’s anyone’s guess how the court will ultimately rule on the case, the DC Circuit has not historically been a friendly venue for the FCC, having ruled several times to restrict the commission’s power. Observers say Judge Judith Rogers, a Democrat, is the most likely to be receptive to the FCC’s position, while Silberman is the least likely.