US court clash on 'open internet' rules

  • 07/12/2015

Backers and opponents of "open internet" rules have clashed in a US federal appeals court, in the third round of a battle on how US broadband providers may be regulated.

The so-called "net neutrality" case tests whether online services like Netflix, Yelp and new start-ups should have equal access through internet service firms like Verizon and AT&T.

Supporters of the rule argue that it is needed to ensure access to any type of online service without a gatekeeper, while critics say the FCC is using a heavy-handed standard that will ultimately stifle a free internet.

Two previous efforts by the US Federal Communications Commission were tossed out by the appellate court in Washington, but earlier this year the agency tried again with a new twist – reclassifying broadband firms as "common carriers" which can be regulated like phone companies under a 1934 law.

Peter Keisler, arguing on behalf of cable and telecom providers before the three-judge panel, said the FCC overstepped its authority in the rules approved in February.

He said that congress, in updating telecommunications law in the 1990s, specifically said the internet should be treated as "a core information service" that should be exempted from regulation.

Jonathan Sallett, the lawyer arguing for the FCC, said internet firms essentially serve the same function as the phone company by transmitting data from one point to another.

The rules, Sallett argued, were implemented, "to provide the opportunity to go anywhere on the internet" without an internet service firm deciding what can be delivered, or which services pay for better access.

The plan adopted by a 3-2 FCC vote reclassified broadband internet service providers as "public utility" carriers, in an effort to address a previous court ruling which said it lacked authority to regulate broadband.

The new rule also applies the concept to mobile internet carriers.

Online firms and consumer organisations have largely supported the rules, saying a handful of internet service providers can block or throttle services like Netflix or new start-ups to favour a rival.

"What is at stake here is whether cable and broadband providers like Comcast are allowed to manipulate their customers' access to lawful content of their choice, fundamentally distorting the internet as we know it," said Kate Forscey at the consumer group Public Knowledge.

But the cable and internet providers contend regulation would limit their ability to invest and innovate.

"The real issue is, and always has been, the FCC's attempt to invent authority to regulate the internet despite clear direction from Congress that the internet remain 'unfettered' by regulation," said Berin Szoka at the lobby group Tech Freedom.

Richard Bennett, an American Enterprise Institute fellow, said the battle is not over.

"It's likely that it won't be the end of the road for the controversy over how to regulate internet services, as most outcomes at the appellate level beat a path the Supreme Court," he said.