Verizon Judgement Is Just A Setback For The FCC’s Net Neutrality Rules

Three years ago, the FCC passed Net Neutrality rules designed to keep the Internet free and prevent service providers blocking each others’ services. This week a Verizon lawsuit lodged in 2011 brought a ruling that the US telecoms regulator cannot force Internet providers to treat all traffic equally, and those rules are in limbo.

Despite this, it’s just a setback for the FCC. The ruling was based on a technicality, and observers say the regulator could – and should – fix its rules and re-apply them.

The 81 page judgement of the US Court of Appeals for the District of Columbia hinged on technical grounds and focused on whether the regulator – set up well before the Internet existed – has jurisdiction over broadband providers, and whether those providers are “common carriers”, ie services that carry anyone’s data for a fee and are not responsible for its content.

FCC has the power to regulate

The Court focused on narrow, technical grounds to overturn the Federal Communications Commission’s rules requiring non-discriminatory, non-blocking access to the Internet. However, the court avoided the broader assertions by Verizon that the FCC does not have the authority to regulate broadband providers, saying that it was clear that the FCC does, in fact, have the authority.

The problem, according to the court is that the FCC had applied common carrier rules to an entity that isn’t a common carrier. “That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates,” the three-judge appeals panel said in the introduction of its opinion.

Initially, the court’s finding was greeted by cries around Washington that an Internet apocalypse had just happened. Net neutrality is dead, the press releases cried. Immediate action is required today, said other equally distraught press releases. Headline writers echoed those frightening words.

But as is frequently the case in Washington, reality isn’t in the press releases. Rather, it is in the complete opinion, which lays out the very limited grounds where the FCC is wrong in its approach. Notably, the appeals court’s opinion rejects the vast majority of Verizon’s arguments that claim the FCC has no right to regulate at all.

“The court rejected Verizon’s position that Congress did not give the Federal Communications Commission jurisdiction over broadband access,” said Randall Milch, Verizon executive vice president, public policy and general counsel, in a prepared statement. “At the same time, the court found that the FCC could not impose last century’s common carriage requirements on the Internet, and struck down rules that limited the ability of broadband providers to offer new and innovative services to their customers.”

The court remanded the decision to the FCC for further action, but in the meantime broadband providers are no longer bound by 2010’s Net Neutrality rules.

It just needs the FCC to start over

“We will consider all available options, including those for appeal,” said FCC Chairman Thomas Wheeler in a prepared statement, “to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

“This clearly puts this order back in Chairman Tom Wheeler’s lap,” said Timothy Karr, senior director of strategy for advocacy group Free Press, in an interview. Karr said that while his organisation was disappointed in the outcome, he felt the decision was correct. He said that the problem was that the FCC initially hadn’t grounded its net neutrality rules in the law the way it should have, leading to this decision.

“The FCC—under the leadership of former Chairman Julius Genachowski—made a grave mistake when it failed to ground its open Internet rules on solid legal footing,” Free Press president and CEO Craig Aaron said in a prepared statement. “Internet users will pay dearly for the previous chairman’s lack of political will. That’s why we need to fix the problems the agency could have avoided in the first place.”

Another advocacy group, Public Knowledge, offered suggestions as to what the FCC could do next. “The Court did uphold broad Commission authority to regulate broadband. To exercise that authority, the FCC must craft open internet protection[s] that are not full-fledged common carrier rules,” said senior vice president Harold Feld. “Alternatively, if the FCC needs broader authority it can classify broadband as aTitle 2 common carrier service.”

“What happened is that they tried to concoct a flimsy legal argument under Title 1,” Karr explained. He said that reclassifying broadband services must be a top option. Free Press, he added, will be working with other advocacy organisations to convince the FCC that the net neutrality regulations need to be rewritten in a way that passes judicial muster.

“If you read this decision, the court lays out a clear roadmap for the FCC to take action, and shows what the FCC got wrong,” Karr said. “That path is to read the language of the telecommunications act, and to classify the broadband authority under Title 2, which may be common carrier, but gives the FCC more clear authority to regulate Internet.”

For its part, Verizon does not appear to be planning a rush to close off parts of the Internet. “One thing is for sure: Today’s decision will not change consumers’ ability to access and use the Internet as they do now,” Milch said in a prepared statement. “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. Verizon has been and remains committed to the open Internet which provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want. This will not change in light of the court’s decision.”

But, of course, there’s more to broadband communications than Verizon. While that company may be committed to an open Internet, there’s some question as to whether other providers agree with that.

“We are in the Wild West phase of the Internet,” Karr said. “ISPs can block and censor content at will.” Karr noted that while FCC chairman Wheeler has the authority to make a declaratory judgment with new net neutrality rules, he said that’s unlikely. Karr predicted it will take as long as a year for the FCC to get new rules in place.

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Originally published on eWeek.