Appeals Court strikes down ‘net neutrality’ enforcement

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In a battle that could determine the future of the Internet, a federal appeals court Tuesday struck down federal rules blocking large Internet providers from charging higher rates for the biggest online users, raising the prospect of higher costs and slower connections for popular consumer services such as Amazon.com, Netflix and eBay.

The U.S. Court of Appeals for the District of Columbia ruled that the Federal Communications Commission lacked the authority to force broadband Internet providers such as Verizon, AT&T and Comcast to treat all customers — big and small — the same. The court also said the FCC could not tell providers how to regulate their traffic.

The ruling was the latest salvo in the fierce — and expensive — battle over “net neutrality” and the balance of power between private networks and the Obama administration over the rules of the road for the Internet.

Critics of the FCC rule say it imposes burdensome regulations on the development of the Web, which has blossomed into a global communications and data network without any government oversight. Many conservative and libertarian critics also see the net neutrality push as the opening wedge of an Obama administration push to regulate online traffic based on its political or ideological content.

Net neutrality partisans say the regulations are needed prevent big Internet networks such as Comcast from abusing their power by giving preferential treatment to websites that pay more, favoring in-house services over their rivals’ or slowing traffic to certain heavily trafficked sites unless they pay a premium.

Fight isn’t over

While striking down the FCC’s 2011 rules imposing net neutrality, the court ruled that the agency does have the authority to regulate Web traffic, potentially opening the door for further disputes.

FCC Chairman Thomas Wheeler said the agency was considering its options, including an appeal.

“I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment,” he said in a statement, adding that the FCC would work “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.”

Verizon insisted that the ruling would not change how users browse the Internet.

“Today’s decision will not change consumers’ ability to access and use the Internet as they do now,” the company said in a statement. “The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet.”

Jim Lakely, co-director of the Center on the Digital Economy at the Chicago-based Heartland Institute, a libertarian think tank, expressed disappointment that the court did not kill net neutrality for good.

“Government-dictated net neutrality is a heavy-handed solution to a non-existent market failure,” he said. “Supporters of a vibrant and innovative digital economy dodged a bullet today, but one gets the feeling it won’t be for long.”

Capitol Hill reacts

The ruling also drew mixed reactions from Capitol Hill.

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