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In a significant blow to the telecom industry and Republican lawmakers, a federal appeals court upheld the Federal Communications Commission's sweeping open internet rules that require internet providers to treat all web traffic equally.
The landmark decision — by a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit — in the FCC's favor will shape how consumers access content on the internet, limiting the power of broadband companies to influence what people see and do online.
Passed by the FCC in February 2015, and endorsed by President Obama, net neutrality prohibits internet providers such as Comcast and Time Warner from blocking websites and services, slowing them down, or boosting the speeds of others in exchange for a premium. According to FCC Chair Tom Wheeler, the rules were designed to protect consumers and business from the whims of broadband providers, ensuring that web content flows freely.
The FCC has tried to pass net neutrality rules in the past. In 2014, the appeals court ruled that the agency did not have the authority to strictly regulate internet providers. This time, however, the FCC reclassified internet companies as a kind of public utility, like telephone companies, placing the agency on more solid legal footing to impose tighter regulations.
But broadband, cable, and wireless firms have argued that the FCC's reclassification of internet providers will place outdated regulations on 21st century technology, such as instituting government mandated price controls. Trade groups have also raised concerns that net neutrality will stunt investment in internet infrastructure, since broadband providers will have to shoulder the costs of surging web traffic without the ability to up-charge data-gobbling services, like Netflix.
Lawyers representing the U.S. Telecom Association and the FCC defended their positions in December. During the hearing, the three judges directed skepticism towards both sides, leaving courtroom observers unsure which way the judges were leaning.
Following Tuesday's ruling, the telecom industry can ask the appeals court to review the case with a full panel of judges, known as an en banc review, or they can ask the Supreme Court to to hear the case.
“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,” Chairman Wheeler said in a statement.