Verizon Offers Court Challenge to FCC’s Net Neutrality Rules

Communications giant says the commission does not have the authority to govern broadband access

Last Updated: January 20, 2011 @ 5:38 PM

The Federal Communications Commission's attempts to establish guidelines aimed at preserving a free and open internet hit a serious bump in the road on Thursday.

Verizon has filed an appeal in the United States Court of Appeals that seeks to overturn the net neutrality guidelines set in place last December. A year ago, that same court rejected the FCC's claims that it had the ability to safeguard internet access. 

"We are deeply concerned by the FCC’s assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself," Michael E. Glover, Verizon senior vice president and deputy general counsel, said in a statement. "We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers.”  

A spokesperson for the FCC did not immediately respond to requests for comment. 

Almost from the moment the FCC passed the regulations, a court appeal from Internet providers and mobile companies was seen as inevitable. As the FCC deliberated over the substance of the regulations, the commission's ability to issue these restrictions was questioned by Republicans in congress and the court system itself. 

Particularly damaging to the FCC's rule-making abilities was a U.S. Court of Appeals decision last summer that said the commission — which can regulate broadcast TV and telephone landlines — has never been given authority to regulate the internet. In that particular instance, the appeals court ruled that the FCC could not sanction Comcast for limiting its customers’ ability to download big BitTorrent video files. 

The FCC's new rules prevent cable providers from limiting broadband access to rival content, online video or other forms of internet traffic. Under the guidelines, which were passed by the 5 member panel along strict party lines, the FCC will impose fines and bring injunctions against offenders. 

Verizon is not waiting until the regulations are published. Instead it is appealing the guidelines, because it argues they represent a modification to its existing FCC license, according to an individual familiar with Verizon's legal strategy.

By forcing the issue now, Verizon is trying to ensure that the case will be heard in the D.C. Court of Appeals — the same court that earlier shot down the FCC's authority to regulate the web. Moreover in its motion, Verizon asked that the same three judge panel that sided with Comcast earlier, hear its current appeal. 

Were Verizon to wait until the regulations were published and not link the appeal to its FCC license, it could be heard in a different appeals court that might be more sympathetic to the FCC. 

Digital rights groups hit back at the communications giant, accusing it of in effect gaming the legal system. 

"Under this bizarre legal theory, virtually every FCC decision would wind up in one court," Andrew Jay Schwartzman, senior vice president and policy director of Media Access Project, said in a statement. "Verizon has made a blatant attempt to locate its challenge in a favorable appeals court forum. The company's theory assumes that all agency actions changing rules are ‘modifications’ to hundreds of thousands of licenses.”

This is not the first time Verizon has run afoul with net neutrality backers. In a pact with Google last summer, the company proposed a plan that would apply net neutrality conditions to most wired broadband Internet connections but use a far lighter approach to mobile web connections.

In its statements on Thursday, Verizon once again argued that it was not attempting to subvert net neutrality. 

“Verizon has long been committed to preserving an open Internet and meeting the needs of our customers. We have worked extensively with all players in the Internet and communications space to shape policies that ensure an open Internet and encourage investment, innovation and collaboration with content providers and others to meet the needs of consumers," Glover said. 

One group that embraced Verizon's appeal was congressional Republicans. They have long argued that net neutrality is a congressional issue, best left alone by the commission. 

"We welcome the decision by Verizon, and hopefully others, to demand their day in court to block the FCC's misguided attempt to regulate the Internet. At stake is not just innovation and economic growth, although those concerns are vital," said a statement from House Commerce Chairman Fred Upton (Mich.), Communications subcommittee chairman Greg Walden (Ore.) and vice chair Lee Terry (Neb.). 

As of yet, however, Verizon is the only internet and communications company listed on the appeal. Given the outcry among providers, that seems destined to change.