BY
A U.S.
appeals court upheld the Obama administration's landmark rules barring internet
service providers from obstructing or slowing down consumer access to web
content on Tuesday, dealing a blow to big cable and mobile phone companies.
A three-judge panel of the
U.S. Court of Appeals for the District of Columbia Circuit, in a 2-1 decision,
backed the Federal Communications Commission's so-called net neutrality rules
put in place last year to make internet service providers treat all internet
traffic equally.
The rules prohibited broadband
providers from giving or selling access to speedy internet, essentially a
"fast lane" on the web's information superhighway, to certain
internet services over others.
In siding with the FCC, the
court treated the internet like a public utility and opened the door to further
government internet regulations.
The ruling was a big victory
for President Barack Obama, a strong advocate of net neutrality rules.
"Today's ruling is a
victory for the open, fair and free internet as we know it today - one that
remains open to innovation and economic growth, without service providers
serving as paid gatekeepers," White House spokesman Josh Earnest said.
But the fight is not over. The
internet service providers that sued to block the regulations said they would
appeal either to the full appellate court or to the Supreme Court, and
telecommunications industry groups said they would redouble efforts to get
Congress to limit the FCC's authority.
Netflix Inc and Twitter Inc
were among the companies that praised the ruling, while Google, part of
Alphabet Inc, and others have backed the rules.
Presumptive Democratic
presidential candidate Hillary Clinton and Democrats in Congress also lauded
the ruling.
But the U.S. Chamber of
Commerce business group said the FCC is "essentially transforming an
entire industry, in this case the internet, from an innovative, lightly
regulated enterprise that made huge investments into this country, into a
public utility subject to the whims of regulators."
South Dakota Republican John
Thune, who chairs the Senate Commerce Committee, said the decision upholds FCC
restrictions "designed for the monopoly-telephone era." He said the
Republican-led Congress needs to step in to overturn a decision that results in
"a highly political agency micromanaging the internet ecosystem."
Net neutrality is a major
issue for broadband providers like Verizon Communications Inc, Comcast Corp and
AT&T, which fear the rules may make it harder to manage internet traffic
and make investment to provide additional capacity less likely.
Verizon said it backs an open
internet but urged Congress to approve "reasonable, bipartisan legislation
that would provide a stable framework for continued investment and
innovation."
The decision was a victory for
content providers like Netflix and Yelp Inc, which have worried that access to
customers could be limited without net neutrality.
The ruling boosted the FCC in
its bid to complete action on major internet privacy rules applying to internet
providers before the end of the year. Internet service providers have expressed
growing frustration at proposed FCC regulatory mandates, including new privacy
rules and a proposal to open up pay-TV set top boxes to new competitors.
'UNFETTERED ACCESS'
FCC Chairman Tom Wheeler said
the "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."
The telecommunications
industry trade association US Telecom, which led the legal challenge, said the
court failed to recognize "the significant legal failings" of the FCC
rules that "we believe will replace a consumer-driven internet with a
government-run internet, threatening innovation and investment in years to
come."
The court also rejected legal
arguments from opponents that the rules should not apply to mobile phone web
use or that they violated the constitutional free-speech rights of internet
service providers.
Republican FCC commissioner
Michael O'Rielly said, "We all will rue the day the commission was
confirmed to have nearly unmitigated power over the internet."
While the ruling was critical
for businesses, consumers likely will not notice any difference because the
rules have been in effect since June 2015.
The court's ruling was made by
two Democratic-appointed judges: David Tatel, named by President Bill Clinton,
and Sri Srinivasan, an Obama appointee. They wrote that "over the past two
decades, (website) 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."
Judge Stephen Williams, an
appointee of Republican President Ronald Reagan, wrote in dissent that
"the ultimate irony of the commission’s unreasoned patchwork is that,
refusing to inquire into competitive conditions, it shunts broadband service
onto the legal track suited to natural monopolies."
The FCC decided in 2015 to
reclassify internet service providers as common carriers under a 1996 law. But
unlike how utilities are treated, the FCC decided not to impose rate
regulations or require broadband providers to file notice of pricing plans.
(Additional reporting by
Lawrence Hurley)
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