A federal appeals court ruled Tuesday that Verizon Communications Inc., and other Internet service providers can operate like premium TV providers by offering priority broadband access to certain websites, dealing a blow to the legal authority of the Federal Communications Commission.
The lawsuit, Verizon v. FCC, centered on the FCC's Open Internet Rule intended to prevent broadband providers from slowing down the digital traffic of their rivals or prioritizing the traffic of groups they favor. This concept known as net neutrality was a part of President Barack Obama's 2008 campaign platform.
This controversial case pitted Democrats against Republicans and divided members of the tech industry because it has the potential to create more freedom for companies but potentially less freedom for consumers.
"A broadband provider like Comcast might limit its end-user subscribers' ability to access the New York Times website if it wanted to spike traffic to its own news website, or it might degrade the quality of the connection to a search website like Bing if a competitor like Google paid for prioritized access," said Judge David Tatel , who wrote the court ruling, in an example of the premise behind net neutrality.
The appeals court decided the FCC rule illegally treats broadband providers differently than common carriers, according to the 1996 Telecommunications Act that gives the commission its authority.
Companies may prioritize some traffic but they have to tell subscribers to their service, according to the court ruling available online.
"Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order," Tatel said.
As a result of this ruling Verizon and other companies may now "establish fast lanes for the few giant companies that can afford to pay exorbitant tolls and reserve the slow lanes for everyone else," said a press statement from Craig Aaron, president of digital rights advocacy group Free Press.
"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," Aaron said. "New FCC Chairman Tom Wheeler recently stated that the FCC must have the ability to protect broadband users and preserve the Internet's fundamental open architecture. In order to do that, he must act quickly to restore and reassert the FCC's clear authority over our nation's communications infrastructure."
The court did not oppose the spirit of the net neutrality order, explaining that "regulation of broadband Internet providers certainly involves decisions of great 'economic and political significance'"
"Our task as a reviewing court is not to assess the wisdom of the Open Internet Order regulations, but rather to determine whether the Commission has demonstrated
that the regulations fall within the scope of its statutory grant of authority," Tatel said.
The need to protect openness on the Internet should, however, not come at the expense of giving a regulator too much authority, said Jeffrey Eisenach, director of the Internet policy at the American Enterprise Institute think tank, in a statement.
"The compromised Open Internet Order struck down today left much to be desired, but it was a step toward maintaining Internet users' freedom to go where they wanted, when they wanted, and communicate freely online," Eisenach said.