“Net neutrality” rules approved by the Federal Communications Commission earlier this year are set to take effect on Friday after a legal move to delay them failed.
On Thursday, the Washington, D.C., Federal Court of Appeals rejected a “stay” to delay the new rules. Service providers such as AT&T had sought the intervention.
The panel said the United States Telecom Association, the plaintiffs in the case, did not satisfy the requirements for a stay.
The ruling is a setback for the industry, but the litigation will go on. The court accepted the Telecom Association’s request to speed up the proceedings and asked the two sides to submit a schedule for briefing within two weeks.
In seeking the stay, providers said they were not opposed to some of the rules such as the prevention of so-called fast lanes for preferred traffic.
Last February, the FCC agreed in a 3-2 vote to new rules that specifically prohibit service providers from blocking or slowing Internet traffic. To make sure the FCC has the authority to punish violators, the agency agreed to put Internet service in the same regulatory camp as the telephone and other utilities. That means providers would have to act in the “public interest” when supplying Internet service and refrain from “unjust or unreasonable” business practices.
The goal is to prevent Internet service companies like Verizon and AT&T from striking secret deals with content providers like Google, Netflix or Twitter to move their data faster and shutting out fresh competition.
Cable and wireless companies that provide much of the nation’s bandwidth object to the rules. The lawsuit says the regulations are too onerous, violate federal law, and are arbitrary, and that the FCC didn’t follow the proper procedure in creating the rules. U.S. Telecom says it has no problem following the regulations against blocking or slowing web traffic, but that the FCC said it’s not fair to treat broadband like public utilities.
Consumer groups and smaller startups, however, have cheered the regulations because they say it will prevent broadband companies from manipulating traffic and charging Internet “tolls.”
However, the court also said it would expedite a hearing on the rules, which face threat of overturn through possible legislation in Congress.
FCC Chairman Tom Wheeler hailed the decision.
“This is a huge victory for Internet consumers and innovators! Starting Friday, there will be a referee on the field to keep the Internet fast, fair and open. Blocking, throttling, pay-for-priority fast lanes and other efforts to come between consumers and the Internet are now things of the past,” he said.
“The rules also give broadband providers the certainty and economic incentive to build fast and competitive broadband networks.
The trade association USTelecom, which includes AT&T, saw positive news in the fact that a hearing would be expedited.
USTelecom President & CEO Walter B. McCormick Jr said in a statement:
“While we are disappointed the court declined to grant our stay request, we recognize that the bar for obtaining a stay is exceptionally high. However, the court’s decision to grant expedited briefing shows the gravity of the issues at stake, and will facilitate a quicker path to determining the proper legal treatment for regulating broadband Internet access service.
“As we pointed out in our request for stay, the FCC and Congress have long agreed that this critical service, which is fundamental to consumers’ daily lives, should be lightly regulated to continue the enormous investment and innovation that has enabled the Internet-related economy to thrive.
“To shift course backward to yesterday’s telephone regulation not only makes little sense, it isn’t legally sound. That said, USTelecom continues to support the order’s three bright-line rules prohibiting blocking, throttling and paid prioritization, which were not part of the stay request. We look forward to providing the court a more fulsome, detailed accounting of the legal problems with the commission’s order.”
In other reaction, Sarah Morris, senior policy counsel for New America’s Open Technology Institute, called the court’s decision a “win” for consumers and entrepreneurs as well as technology developers.
“Today’s ruling is a win for consumers and online innovators. A stay was not warranted in this case, and the court was wise to reject the petitioners’ insufficient arguments to delay implementation of the rules,” Morris said.
“Today’s decision clears the path for the FCC’s historic network neutrality rules to go into effect tomorrow, ensuring that the Internet will continue to be a level playing field for entrepreneurship, public debate, civic participation, and innovation.”
(The Associated Press contributed to this report.)
