WASHINGTON – A federal appeals court Tuesday upheld tough new regulations for online traffic in a major victory for President Barack Obama and a blow to telecommunications companies, which challenged the net neutrality rules.
The District of Columbia U.S. Circuit Court of Appeals upheld the rules approved by the Federal Communications Commission last year.
The judges dismissed arguments by AT&T, other telecom companies and industry trade groups that the FCC overstepped its authority in changing the legal classification of high-speed internet service to allow for stricter oversight.
But one of the judges, Stephen F. Williams, dissented in part of the decision, which could give net neutrality opponents an opening for a further appeal.
AT&T said it wasn’t ready to give up the fight.
“We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal,” said David McAtee, the company’s general counsel.
Two previous attempts by the FCC to set net neutrality regulations were thrown out by federal judges.
The regulations were proposed by FCC Chairman Tom Wheeler and strongly backed by Obama, who publicly interjected himself into the independent agency’s deliberations.
The FCC’s Democratic majority approved the rules on a 3-2 vote last year.
“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,” Wheeler said.
“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,” he said.
Silicon Valley companies such as Google and public interest groups strongly backed the neutrality rules, arguing that they would prevent broadband providers from acting as gatekeepers to squelch innovation and online start-ups.
“The people have spoken, the courts have spoken and this should be the last word on net neutrality,” said Craig Aaron, president of the digital rights group Free Press.
But congressional Republicans and telecom executives lambasted the new FCC regulations, saying the agency had overstepped its bounds. They said the rules would hinder investment in expanding high-speed networks.
The rules prohibit broadband providers from blocking, slowing or selling faster delivery of legal content flowing through their networks to consumers.
Twice before courts have thwarted the FCC’s efforts to establish net neutrality rules. So this time the FCC decided to classify high-speed internet as a telecommunications service under Title 2 of the federal Communications Act, subjecting it to utility-like oversight and giving the agency more enforcement authority.
Wheeler promised a light-handed approach, and the rules exempt broadband providers from rate regulation and other more onerous provisions of Title 2 that apply to conventional phone service providers.
Opponents argued in court that the FCC overstepped its authority in reclassifying high-speed internet service and also did not follow proper procedures in considering the new regulations.
But the appeals court found that the FCC “has statutory authority to classify broadband as a telecommunications service.”
Williams agreed with his colleagues, David S. Tatel and Sri Srinivasan, on that point. But he dissented in part of the opinion, arguing the FCC was “arbitrary and capricious” in how it made its decision.
“The commission acts like a bicyclist who rides now on the sidewalk, now the street, as personal convenience dictates,” Williams wrote in a dissent that called the FCC’s rationale for reclassifying broadband “watery thin and self-contradictory.”
Telecom companies complained that the regulations have opened the door for tougher regulation, which they warn would discourage investment in expanded networks.
Among those who challenged the rules are AT&T, CTIA, the National Cable &Telecommunications Association, CenturyLink, the American Cable Association., U.S. Telecom and the Wireless Internet Service Providers Association.
Net neutrality opponents referred to the court ruling as a split decision and suggested the legal fight wasn’t over.
The NCTA said it would “carefully review the majority and dissenting opinions before determining next steps.”
FCC Commissioner Ajit Pai, a Republican who voted against the rules last year, said he continued to believe they are “unlawful” and “I hope that the parties challenging them will continue the legal fight.”
“The FCC’s regulations are unnecessary and counterproductive,” he said.