Huge victory for regulators and consumers in the legal battle against telecoms

Last Tuesday, The 2-1 court ruling has voted to uphold a series of strict new rules for Internet providers, which will force Internet providers such as Verizon (NYSE: VZ) and Comcast (NASDAQ: CMCSA) to obey federal regulations that ban the blocking or slowing of Internet traffic to consumers.

The regulations from the Federal Communications Commission also forbid carriers from selectively speeding up websites that agree to pay the providers a fee, a tactic which, critics have said, could unfairly tilt the commercial playing field against startups and innovators who may not be able to afford it.

What happened in the federal appeals court is widely interpreted as a major victory to regulators in the fight over net neutrality and ensuring that one of the most sweeping changes to hit the industry in recent years will likely remain on the books.

“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,” Tom Wheeler, FCC chairman, said in a statement.

Consumers advocate hailed the landmark ruling, marking the third time the FCC had gone to court to defend its net neutrality rules, as a decisive outcome in a years-long battle over the future of the Internet.

“This is a slam-dunk win,” said Gene Kimmelman, president of the advocacy group Public Knowledge. “It’s just a huge win for the open Internet order and for the FCC.”

More broadly, the decision affirms Washington’s ability to regulate Internet providers like legacy telephone companies. Approved in a bitterly partisan vote last year, the move by the FCC to “reclassify” Internet providers significantly expanded the agency’s role in overseeing the industry. It opened up Internet providers to all-new obligations they were not subject to before, such as privacy requirements that all telecom companies currently follow in order to protect consumers’ personal data.

“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,” the judges wrote.

Internet providers now face expectations they once could safely ignore because they were not considered telecommunications carriers. For instance, phone companies currently must obtain consumers’ explicit consent before sharing their names, phone numbers, addresses or other personal information with marketers. Internet providers do not, but a pending proposal at the FCC would seek to extend a similar set of expectations to broadband companies.

However, some carriers hinted at going further even Broadband providers could next request a re-hearing at the D.C. 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 general counsel.

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