FCC’s Net Neutrality Rules May Not Survive Court

Oral arguments in Verizon v. FCC last 2 hours

D.C.'s political bookies are giving the full survival of the Federal Communications Commission's net neutrality rules long odds.

In a packed Washington courtroom Monday morning, the U.S. Court of Appeals for the D.C. Circuit heard arguments in Verizon v. FCC, the landmark case challenging the FCC's authority to regulate the Internet.

The panel of three judges were so interested in the case that they extended the oral arguments from the traditional 45 minutes to two hours, still only a short time for a roomful of attorneys to determine the fate of Internet regulation.

"I found it chilling—judges trying to figure out where Internet governance should go," said former FCC commissioner Robert McDowell, now a fellow with the Hudson Institute. McDowell, who attended the oral arguments, dissented when the FCC passed the rules in December 2010 under FCC chair Julius Genachowski.

According to court watchers, two of the judges, Judge Laurence Silberman and Judge David Tatel, took a hard line with the FCC's position. Judge Judith Rogers asked fewer questions. By the end of the day, most Washington prognisticators believed the court would strike down at least some, if not all of the FCC's rules. Many believed the court could "split the baby" in a mixed decision. Some went so far as to say it was a tough day for the FCC.

What seemed especially vulnerable based on the judges' questions is the provision that the FCC can force broadband providers to provide their service free to "edge" companies like Netflix, Amazon or YouTube. Doing so would reclassify ISPs as common carrier services—a move that is prohibited by the Communications Act. If the court strikes the provision, Internet providers, cable and telecommunications companies could charge Netflix-like companies to deliver a better connection to customers.

The provisions most likely to stay in tact, said many observers, are those that prohibit Internet service providers from blocking content and require services to be transparent about network management practices.

If the court throws out some or all of the FCC's net neutrality rules, it will be up to incoming FCC chair Tom Wheeler to sort it all out, abandon the rules or find another way to reclassify the Internet. Congress also could step in.

In the meantime, the net neutrality debate will have to wait for the court's decision by the end of the year or early 2014.