DC Court Upholds FCC Open Internet Order

In a 2-1 decision, the U.S. Court of Appeals for the District of Columbia Circuit has upheld the FCC's Open Internet Order, which was issued last March and challenged in court shortly thereafter. The full text of the decision - 184 pages' worth - is available here.

In a statement, FCC Chairman Tom Wheeler said: "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. After a decade of debate and legal battles, today's ruling affirms the commission's ability to enforce the strongest possible Internet protections - both on fixed and mobile networks - that will ensure the Internet remains open, now and in the future."

FCC Commissioner Ajit Pai disagreed. In a statement, he said, in part: "I am deeply disappointed by the D.C. Circuit's 2-1 decision upholding the FCC's Internet regulations. For many of the reasons set forth in Judge Williams' [presiding judge on the case in the DC Circuit] compelling dissent, I continue to believe that these regulations are unlawful, and I hope that the parties challenging them will continue the legal fight. The FCC's regulations are unnecessary and counterproductive."

In his dissent, Judge Williams wrote, in part: "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. Because that track provides little economic space for new firms seeking market entry or relatively small firms seeking expansion through innovations in business models or in technology, the Commission's decision has a decent chance of bringing about the conditions under which some (but by no means all) of its actions could be grounded - the prevalence of incurable monopoly."

Industry reaction to the decision thus far has been largely negative, with the ACA, NCTA, USTelecom, the ITIF, and the CTA all expressing disappointment with it. Some are considering further legal challenges and/or urging Congressional action.

At the heart of industry objections to the Open Internet Order is the reclassification of Internet service providers (ISPs) as common carriers under Title II of the Communications Act of 1934, exposing them to utility-style regulation. The petitioners in the court case argued that the FCC does not have the authority to reclassify ISPs, and also that 1930s-era regulatory schemes will harm Internet innovation and investment.

Other elements of the Order include bans on blocking, throttling and paid prioritization, as well as increased transparency into network connections.

In a statement, USTelecom President Walter McCormick said: "Two judges on the court have unfortunately failed to recognize the significant legal failings of the Federal Communications Commission's decision to regulate the Internet as a public utility, leaving in place regulation we believe will replace a consumer-driven Internet with a government-run Internet, threatening investment and innovation in years to come. Our industry strongly supports open Internet principles, and the FCC's order is wholly unnecessary to keeping the Internet open. We will continue to work toward policies that facilitate America's broadband leadership, are reviewing the court's decision, and will be evaluating all of our legal options."

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