In victory for Obama, court backs strict Internet regulation

Federal regulators can strictly oversee the Internet to ensure that content flows freely to consumers, a court ruled Tuesday in a major victory for President Obama and other supporters of the long-pursued concept of net neutrality.

In a 2-1 decision, a panel of judges of the U.S. Court of Appeals for the District of Columbia Circuit dismissed arguments by AT&T Inc., other telecom companies and industry trade groups that the Federal Communications Commission exceeded its authority in approving the regulations last year.

The FCC was responding to fears that broadband providers might charge more money for faster delivery of content passing through their networks to Americans’ computers or mobile devices, or block or slow competitors’ content. Broadband companies denied that they had such plans.

In addition to prohibiting those practices, the court ruling cleared the way for other uses of the FCC’s expanded authority. The agency has proposed limits on how Internet service providers use the vast and potentially lucrative trove of information they have about their customers and possible restrictions on so-called zero-rating plans that exempt some streaming content from wireless data caps.

But the legal fight isn’t over yet for an issue that began more than a decade ago as the Internet’s role in American culture, communications and commerce rapidly expanded. 

FCC Chairman Tom Wheeler, a Democrat who pushed the regulations with Obama’s strong backing, said the court decision was “a victory for consumers and innovators who deserve unfettered access to the entire Web.”

Consumer advocates and Internet companies such as Netflix and Twitter also hailed the decision, saying it gave the FCC the ability to prevent broadband providers from acting as gatekeepers for online content.

“The court has ensured that paid prioritization, blocking, and discrimination of content has no place in a free and open Internet,” said Michael Beckerman, president of the Internet Assn., a trade group whose members include Amazon, Google and Snapchat.

Opponents, however, said they weren'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,” AT&T General Counsel David McAtee said.

Republican lawmakers promised to try to overturn the FCC's actions with legislation, which could be successful if they make gains in November’s election and presumptive Republican presidential nominee Donald Trump wins the White House.

“Rather than providing Internet users and companies alike with the regulatory certainty they need to thrive, we instead now have a highly political agency micromanaging the Internet ecosystem,” Sen. John Thune (R-S.D.) said. 

Fears began rising around 2006 that broadband providers such as AT&T, Comcast Corp. and Verizon Communications would sell fast lanes for some data, or slow content such as video streams that competed with their own services.

The FCC twice established net neutrality rules but federal judges tossed them out after legal challenges by telecom companies.

So last year, the FCC took the controversial step of classifying high-speed Internet as a telecommunications service under Title 2 of the federal Communications Act.. The move subjected broadband to the same utility-like oversight as conventional phone services, giving the agency more enforcement authority.

The FCC’s Democratic majority approved the rules on a 3-2 vote last year after Obama took the unusual step of publicly urging the independent agency to adopt the strongest possible regulations.

Both Republican commissioners voted against the rules.

Wheeler promised a light-handed approach, and the rules exempted broadband providers from rate regulation and other more onerous provisions of Title 2 that apply to conventional phone service providers.

But telecom executives and congressional Republicans said the new regulations would hinder investment in expanding high-speed networks.

Opponents argued in court that the FCC overstepped its authority in reclassifying high-speed Internet service and also failed to follow proper procedures in considering the new regulations.

In a 115-page ruling, the court found that the FCC “has statutory authority to classify broadband as a telecommunications service.” 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. 

Williams agreed with his colleagues, judges David S. Tatel and Sri Srinivasan, that the FCC had the authority to enact the rules. But he argued 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.

Times staff writer Paresh Dave contributed to this report.

jim.puzzanghera@latimes.com

Follow @JimPuzzanghera on Twitter

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UPDATES:

5:45 p.m.: This article has been updated with additional quotes and analysis.

8:59 a.m.: This article has been updated with reaction from AT&T’s general counsel.

8:34 a.m.: This article has been updated with additional details about the ruling and reaction from supporters and opponents.

7:41 a.m.: This article has been updated with staff reporting.

This article was originally published at 7:27 a.m.

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