A US appeals court has ruled against the Federal Communications Commission’s (FCC) net neutrality rules, a decision which promises operators more flexibility in how they set wholesale prices for content providers.
The FCC argued its rules require operators to treat all online content equally rather than giving preferential treatment to providers willing to pay more for a faster service.
Following the decision by the US Court of Appeals in Washington, Wheeler issued a statement saying the commission is weighing its options, including a further appeal of its own which would prolong the legal wrangle.
Net neutrality is a live issue as operators study new revenue-generating services. Just last week’s CES 2014 saw AT&T talk about its sponsored data service, which would see usage charges for specific content and apps charged to a sponsoring company rather than a subscriber.
Even though AT&T’s service would be delivered at the same speed and performance as non-sponsored content (in order to address net neutrality concerns), it drew a cautious response from new FCC chairman Tom Wheeler. The regulator will take “a wait and see” attitude but is prepared to act if necessary, he said.
The court’s latest ruling emphasises that the FCC does exercise authority over broadband.
However, the commission’s net neutrality rules go too far because they are in defiance of the country’s Communications Act, it said.
The nub is the commission would violate the act by regulating providers of broadband services as common carriers.
Given the FCC has classified broadband providers not as providers of “telecommunications services” but as providers of “information services”, it is in breach of the act.
The act states telecoms carriers are treated as common carriers only to the extent that are engaged in offering telecommunication services.
Verizon launched a challenge to the FCC in the appeals court in July 2012.