(Bloomberg) -- A U.S. appeals court declined to reconsider the Federal Communications Commission’s so-called net neutrality rule barring internet service providers from slowing or blocking rivals’ content.
The court’s ruling last year was a triumph for companies such as Netflix Inc. and Alphabet Inc.’s Google that use broadband networks to reach customers. It was a setback for telecommunications providers including AT&T Inc. and Verizon Communications Inc. and cable providers led by Comcast Corp., who said the rule brought intrusive government oversight and threatened investment and innovation.
The Washington-based court’s decision Monday may be overtaken as the regulator moves to revise the regulation.
FCC Chairman Ajit Pai, a Republican in office since January, last week proposed rolling back key aspects of the measure, such as allowing so-called fast lanes offering quicker passage over networks to companies that pay more. The agency plans to seek comment before voting on a revised rule that would supplant the current regulation.
The court ruling was no surprise “in light of the fact that the commission on May 18 will begin the process of repealing” the regulation, Pai said in a statement.
“Review would be particularly unwarranted at this point in light of the uncertainty surrounding the fate of the FCC’s order,” U.S. Circuit Judge Sri Srinivasan wrote in an opinion. He and Judge David Tatel had previously voted to uphold the measure.
“We’re gratified that three of the D.C. Circuit judges wanted to rehear the case and that the FCC itself is now considering new rules to move back to investment and consumer-friendly net-neutrality policies,” said Jonathan Spalter, chief executive officer of USTelecom, a trade group with members including AT&T and Verizon. USTelecom, which asked for further review of last year’s ruling in favor of the FCC, will “continue to review our legal options,” Spalter said.
The appeals court acted after a decade of debate about web access that pitted Silicon Valley against companies that provide internet access to homes and businesses. The court likened internet service providers to utilities, saying they “act as neutral, indiscriminate platforms for transmission of speech” and can be regulated in the same manner as telecommunications.
A different panel in 2014 rejected the FCC’s efforts to implement internet-traffic rules in a case brought by Verizon, concluding the regulator had tried to treat broadband-service providers as common carriers, after previously classifying them as exempt from that designation.
U.S. Circuit Judge Brett Kavanaugh dissented from Monday’s decision to forgo review of last year’s ruling.
“Congress did not clearly authorize the FCC to issue the net neutrality rule,” Kavanaugh wrote. “Congress has debated net neutrality for many years, but Congress has never enacted net neutrality legislation or clearly authorized the FCC to impose common-carrier obligations on internet service providers. The lack of clear congressional authorization matters.”
In his statement, Pai simultaneously praised and condemned the end result. He applauded the preservation of legal precedent that “makes clear the FCC has the authority to classify broadband Internet access service as an information service,” while adding he agreed with "many" points raised by Kavanaugh and another dissenting judge, Janice Rogers Brown.
The case is US Telecom Association v. FCC, 15-1063, U.S. Court of Appeals, District of Columbia (Washington).