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Verizon, FCC Spar Over Net Neutrality

12 Sep, 2013 By: Chris Tribbey

Verizon and the Federal Communications Commission (FCC) presented oral arguments Sept. 9 in Verizon’s challenge to the FCC’s 2011 net neutrality rules.

A panel of judges at the U.S. Court of Appeals for the District of Columbia heard Verizon’s argument that the FCC doesn’t have the authority to regulate the Internet traffic. The FCC passed the net neutrality rules in 2011, preventing Internet service providers (ISPs) from prioritizing Internet traffic, favoring content partners or slowing service to customers who stream or download content. The regulations gave the FCC the ability to impose fines and bring injunctions against companies.

The FCC argues that it does have the power to regulate how Internet is delivered to consumers, and that allowing ISPs to choke off traffic could hurt innovation.

Comcast and other ISPs have fought the rules, while content providers like Netflix have worked to uphold them.

Rich Karpinski, senior analyst with the Yankee Group, said that if the three-judge panel rules against the FCC, ISPs like Verizon could choose to optimize its own streaming services — such as Redbox Instant — over competing services like Netflix.

“The big challenge for the FCC here is the pace at which the industry is changing,” Karpinski wrote. “Common carriage makes sense in a world where dial tone was crucial, but many customers are cutting the cord voluntarily. Net neutrality makes sense in the wire-line broadband market, where in some cases there aren't multiple competitors in a market — and at the same time, available bandwidth is relatively plentiful, making it hard to make a case for discriminating against different sources of traffic.”

Gigi B. Sohn, president and CEO of the nonprofit public Internet rights group Public Knowledge, said that the decision will have a far-reaching impact on how ISPs can and can’t treat their customers.

“If the federal court decides that the FCC doesn't have the power to create open Internet rules, there could be a residual impact on the FCC's ability to make decisions that involve the future of what has now become our main communications tool,” she said.

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