updated 12:58 pm EST, Tue January 14, 2014
FCC traffic management rules voided, transparency sections remain
A number of rules set by the Federal Communications Commission (FCC) for "net neutrality" have been ruled invalid by an appeals court in Washington. The ruling, a 2-1 decision in a suit between the FCC and Verizon, effectively prevents the FCC from requiring all Internet service providers (ISPs) treat traffic equally, and could lead to providers requesting payments from content providers in order to give better service to subscribers.
The rules were outlined by the FCC at the end of 2010, with then-chairman Julius Genachowski stressing that ISPs would be able to manage their networks in a non-discriminatory way, including with usage-based pricing, but they were expressly forbidden from "unreasonable discrimination" by blocking or throttling specific data types. An example would be an ISP throttling the bandwidth for a video service, deteriorating the service sufficiently to drive subscribers to the ISP's own on-demand video service.
FCC Chairman Tom Wheeler
The 81-page ruling, spotted by GigaOM, states that the FCC "has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such." The court therefore found that the FCC "has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations," ruling "we vacate those portions of the Open Internet Order."
Though the ruling eliminates the main point of the FCC rules, it does still keep a section on transparency intact, with providers still being required to disclose how they manage traffic. "Verizon does argue that the disclosure rules are not severable, insisting that if the anti-discrimination and anti-blocking rules fall so too must the disclosure requirements. We disagree," reads the ruling, continuing "we are satisfied that the Commission would have adopted the disclosure rules absent the rules we now vacate, which, we agree, operate independently."
While the suit removes some of the power the FCC has over ISPs, the Commission could still take the fight to a higher court. "We will consider all available options, including those for appeal, 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," said FCC chairman Tom Wheeler in a statement. Though it could appeal at the US Supreme Court, losing the appeal could lead to the FCC effectively becoming powerless to control ISPs and carriers in the US.