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Net Neutrality Suffered a Blow, But It’s Not Dead: Now the FCC Has Choices to Make

New chairman Tom Wheeler could pick the fastest path — but risk the fury of congressional Republicans and Internet service providers

Net Neutrality, the notion that the Internet should work equally well for all, suffered a blow Tuesday when an appellate court overturned the Federal Communications Commission’s current rules — but by no means does it end the fight to keep service providers from favoring certain users while restricting others.

Instead, it opens a new chapter, leaving the FCC and new chairman Tom Wheeler with choices for how to pursue a now far more difficult course — choices that lawyers and some FCC watchers suggested to TheWrap on Tuesday could define Wheeler’s FCC leadership.

One question is whether Wheeler will be willing to take the fastest path to Net Neutrality — and the fury and political peril it would bring from congressional Republicans and Internet service providers. That course would be to reverse the FCC decision that broadband services are “informational services” and not “common carrier services.”

Republican legislators didn’t wait long to issue admonitions: In comments Tuesday night, both Rep. Greg Walden (R-Oregon), the chairman of the House Energy and Commerce Committee’s telecom panel; and two GOP senators warned Wheeler about following the reclassification path.

“As I have said in the past, reclassification would be a step backwards to an era of government intrusion into communications networks,” Walden told TheWrap. “Regulation as a common carrier would be antithetical to the Internet as we know it and would negatively impact its ability to innovate and grow to meet the needs of consumers in the 21st Century.”

Senate Commerce Committee ranking Republican John Thune, R-S.D., and the committee’s Internet subcommittee ranking Republican Roger Wicker, R-Miss., offered a similar warnings in a joint statement, but also suggested Wheeler would be violating a pledge to the committee if he took action.

“During his confirmation process, FCC Chairman Wheeler publicly committed that he would come to Congress for direction before pursuing any new Net Neutrality rules, and we call on Chairman Wheeler to honor his commitment,” the two said.

Also read: Federal Appeals Court Overturns FCC’s Net Neutrality Rules

Despite those warnings, a number of consumer groups called on Tuesday for the FCC to take that step.

Another is whether the court ruling would give the FCC the leeway to take a more pragmatic approach to Net Neutrality. Instead of rolling out broad Net Neutrality rules and trying to enforce them, the FCC could try to police specific examples of service providers engaging in discrimination.

Then there is the question of whether the battle could inadvertently demonstrate the first impacts of Senate Democrats’ decision to change Senate rules and confirm most nominees on majority votes. Since the FCC case was argued, Senate confirmation action has allowed Democrats to take the majority of U.S. Court of Appeals for the District of Columbia, potentially bettering the still-long odds that the FCC could get the whole court to reverse the decision of the three-judge panel.

The effects of Tuesday’s decision were broad. The appellate court decided that the FCC’s 2002 decision to classify telco firms’ broadband Internet services as “information services” rather than as “common carrier” services limits the FCC’s authority to regulate them.

The decision, in a case brought by Verizon, struck down both the FCC’s attempts to bar any blocking of an Internet site by service providers and to impose Net Neutrality conditions. At the same time, the court said the FCC does have the authority to regulate broadband services, and rejected contentions it didn’t have that authority.

Also read: New FCC Chair Tom Wheeler Announces New Staff Appointments

Left alone, the decision gives Internet service providers far more opportunity to affect the content their subscribers receive. Congressional Republicans and Internet service providers praised the decision on Tuesday, saying the Internet grew without regulation and arguing that the decision ensures that the government doesn’t step in to regulate it.

On Tuesday, several providers argued that any changes would not be drastic.

“Today’s decision will not change consumers’ ability to access and use the Internet as they do now,” said Verizon, which challenged the FCC regulations. “The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet.”

While Internet service providers have repeatedly pledged to provide all legal Internet content to all their subscribers, the decision allows them leeway to offer content of favored content providers at faster speeds and better quality than those of rival content providers. It also could make it difficult for the FCC to prevent Internet Service Providers from limiting speeds or downloads from rival services — whether rival movie download sites or rival phone sites.

Communications lawyers told TheWrap the decision leaves the FCC with several alternatives if it wants to pursue Net Neutrality conditions. That includes an appeal, either to the whole U.S. Court of Appeals or a direct appeal to the Supreme Court.

Also read: New FCC Chair Tom Wheeler Announces New Staff Appointments

Andy Schwartzman, a long time public interest communications lawyer, told TheWrap that while the odds of winning an appeals court attempt are higher than they were last year, it would still be difficult.

He said Senate approval of nominees means there are now four more judges on the now 11-member court — and six of them are Democrats’ appointees. Still, since two of the three judges who wrote Tuesday’s opinion — Judges David Tatel and Judith W. Rogers — are Democrats, a successful en banc appeal would have to get the support of the four new Democrats and two Republicans.

“Two liberal judges wrote this opinion,” he said. “It is in fact the case that the four new judges on the DC Circuit significantly alter the math for en banc review. But it is still rarely granted and it is especially rare when it is done without a dissent [from a judge on the three-judge appellate panel].”

Consumer groups and some Hollywood unions on Tuesday were pushing a simpler alternative. They urged Wheeler and the FCC to simply reverse course of classification of broadband as an “informational service” and reclassify it as a “common carrier” service. The FCC has far greater authority in regulating “common carriers” and the agency, now controlled by Democrats, made the original “informational service” classification when it was under GOP control.

The Writers Guild of America West called the decision “a blow to competition, consumers and content creators” and urged Wheeler, “to exercise the authority necessary to ensure the Internet remains open and affordable.”

Blair Levin, a former FCC official and now an Aspen Institute fellow, suggested that a third alternative would be more successful.

He said that the FCC could enforce Net Neutrality issues on firmer legal ground by pursuing impacts case-by-case rather in broad policy initiatives. Levin said policing examples of problematic conduct could be far easier to defend.

“The court left little room, but the FCC might be able to act by going after conduct that is anti-innovation and anti-competitive,” he said.

Levin suggested that the alternative might not give the FCC the scope of Net Neutrality regulation it had sought, but still provide the agency a way to rein in conduct.

Both he and Schwartzman noted that the appellate court panel while blocking the FCC from imposing broad Net Neutrality policy rules also rejected Verizon’s contention that the FCC had no authority over broadband services.

Consumer groups on Tuesday continued to push the FCC to reclassify broadband as a “common carrier” service. In a Reddit chat, Susan Crawford, a visiting professor of intellectual property at Harvard University, said the FCC needs to take action to make the reclassification.