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DC Court Questions Validity of Net Neutrality Rules

Judges suggest a big defeat for technology companies and consumer advocates may be on the way

Judges on a DC appellate court sharply questioned the validity of the FCC’s Net Neutrality rules on Monday, suggesting the regulatory agency’s so-called “Open Internet” rules are on borrowed time.

Two of the three judges on the panel said Monday in court that they were likely to overturn the FCC on the issue. A ruling against the FCC  that would have major repercussions for the movie and TV industry; it would be a big defeat to technology companies and consumer advocates and a big win for Internet service providers.

Judges David S. Tatel and Laurence H. Silberman made their feelings clear during oral arguments into Verizon’s challenge of the rules, saying that they were likely to act to overturn the FCC.

At a scheduled one hour court hearing that stretched to two hours and was literally standing room only, the two judges repeatedly questioned the FCC’s argument that the rules were necessary to preserve Internet users’ freedom.

Instead the judges questioned whether the rules unfairly or illegally prevented Verizon from charging content companies extra to deliver better service to favored content providers.

Also read: Barry Diller to Senate Group: Net Neutrality Crucial for Competition

The FCC adopted the Net Neutrality rules in December, 2010 amid warnings from tech giants, consumer groups and the Writers Guild of America West that without the rules, the freedom that made the Internet so successful could be in jeopardy.

Google, Facebook, Amazon, Skype and Dish Network were among the major companies sounding the alarm about the rules. They pointed to Internet Service Providers efforts to provide content providers higher quality video than their rivals for a fee as a particular concern. The tech companies warned such a move would turn Internet Service providers into “gatekeepers” and make it nearly impossible for upstart companies to successfully compete with their big rivals.

There have been suggestions that in the movie industry, the fees would make it more difficult for alternative sources of video and movies to prosper.

Also read: GOP Attempt to Overturn FCC’s Net Neutrality Rules Fails in Senate

Internet service providers, meanwhile, questioned the FCC’s legal authority to act without specific Congress authorization as well as the wisdom of acting. They’ve argued that the additional revenue generated from charging fees to content providers is needed to faster upgrading of Internet speeds.

In court on Monday, Verizon attorney Helgi Walker argued that given the Internet’s size and importance economically, it is “not credible” to believe that Congress had authorized the FCC to act on Net Neutrality.

She noted for a decade the FCC had suggested it didn’t have the legal authority to act, then reversed course.

“After 10 years, we discover, Poof, that the authority had been hidden in plain sight,” she said.

Also read: Verizon, MetroPCS Claim Net Neutrality Rules Violate Free Speech

FCC attorney Sean A. Lev, meanwhile, suggested that the fees that service providers want are not exactly “requests.”

“These are not requests,” he said. He called them “a threat.”

In their comments the two judges questioned not so much whether to overturn the FCC but exactly how to overturn the agency.