Internet service providers are free to make deals with services like Netflix or Amazon by allowing those companies to pay to stream their products to online viewers through a faster, express lane on the web, ruled the Washington D.C. federal appeals court on Tuesday, reports the N.Y. Times.
The court legal presentations were based on the 'net neutrality' rule, which was for all Internet service providers to should treat all data on the Internet equally, not discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, and modes of communication.
Federal regulators had tried to prevent those deals, saying they would give large, rich companies an unfair edge in reaching consumers. But since the Internet is not considered a utility under federal law, the court said, it is not subject to regulations banning the arrangements.
Verizon testified to the court that the FCC had held up some deals due to their regulations. This ruling will bring in new deals.
The fear has been that Verizon could raise prices to its consumers. ‘Verizon has been and remains committed to the open Internet, which provides consumers with competitive choices and unblocked access to lawful websites and content when, where and how they want,’ the company said in a statement. ‘This will not change in light of the court’s decision.’
The ruling, in a case brought by Verizon against the F.C.C., concerns at its heart the basic question of whether Internet service is a utility of such vital importance, like telephone lines or electricity that it needs to be regulated closely.
At the least, the F.C.C. will have to try again to define its mission in the Internet age. Tom Wheeler, the agency’s new chairman, said the agency might appeal the decision, but had previously voiced support for allowing Internet companies to experiment with new delivery methods and products.
The federal court ruling affected this decision stated that deals could not be blocked but that ‘the commission did have some basic authority ‘to promulgate rules governing broadband providers’ treatment of Internet traffic.’ It also upheld agency rules requiring broadband companies to disclose how they manage their networks.
In 2002, the FCC said Internet service should not be subject to the same rules as highly regulated utilities, which are governed by regulations on matters like how much they can charge customers and what content they can agree to carry.
Tuesday’s ruling essentially holds the F.C.C. to that determination, made when dial-up modems offered users the chance to crawl through chat rooms and to manipulate crude graphics.
Organizations that had opposed the FCC rules interpreted the Tuesday ruling as favorable to the F.C.C. Michael K. Powell, who was F.C.C. chairman in 2002 when the agency set up its Internet governance structure, said, “Today’s historic court decision means that the F.C.C. has been granted jurisdiction over the Internet.”
Mr. Powell, who is now president of the cable industry’s chief lobbying group, said the decision would not result in significant changes in how Internet companies manage their broadband networks.
Verizon, in fact, portrayed the decision as at least a partial loss. ‘The court rejected Verizon’s position that Congress did not give the Federal Communications Commission jurisdiction over broadband access,’ Randal Milch, a Verizon executive vice president and general counsel, said in a statement.
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