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  • Light Returns to the FCC: Net Neutrality Rules Overturned by Court

    Ryan Kelly/Congressional Quarterly/Newscom

    Ryan Kelly/Congressional Quarterly/Newscom

    Robert McDowell, then a commissioner with the Federal Communications Commission (FCC), famously called it “the darkest day of the year,” referring to the FCC’s December 2010 adoption of “net neutrality” rules. Today, things are looking brighter: The U.S. Court of Appeals for the D.C. Circuit has unceremoniously tossed out the FCC’s rules.

    The FCC rule barred wireline internet service providers (ISPs), such as Verizon or Comcast, from blocking content or discriminating in favor of or against any type of Internet traffic. More limited rules were applied to wireless service. It was never quite clear how the mandates would be enforced, given that Internet network management inherently involves priority setting.

    The FCC provided an exemption for “reasonable network management,” a hedge that left all significant decisions about Internet traffic management up to the FCC to decide on a case-by-case basis.

    This was actually the FCC’s second bite at the neutrality apple. An earlier attempt to impose such rules was blocked in 2010 by the appeals court, which found no legal authority for the FCC to regulate the Internet in this way. Today’s decision was no different.

    The net neutrality rule is an attempt to impose “common carrier” regulation, like that imposed on traditional telephone companies, on ISPs. Such common carrier regulation requires providers to treat all customers equally. But the FCC has previously determined that broadband Internet service is not a common carrier service. As a result, broadband service providers cannot be subjected to common carrier rules, no matter what they are called.

    Proponents of the rule may not give up. The decision leaves open another possible source of FCC authority to regulate—section 706 of the Telecommunications Act, which directs the FCC to foster broadband deployment. Efforts in Congress to grant the FCC new authority are also a near certainty.

    Such efforts, however, face an uphill climb. The Internet has grown substantially since this debate began in the mid-2000s. Many of the strongest supporters of regulating ISPs are themselves facing proposed neutrality mandates. And it is becoming clear that no group of firms really has unchallenged power in the Internet marketplace.

    Neutrality regulation was a bad idea in 2010, and it’s an even worse idea now. The D.C. Circuit Court of Appeals gave it a knockout blow today. Now, Congress and the FCC should let it die.

    Posted in Economics, Front Page [slideshow_deploy]

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