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Like some hideous policy monster that won’t go away, network neutrality is hitting the headlines again. Verizon(s vz) and Metro PCS(s pcs), the two operators that sued the Federal Communications Commission last year over its rules forbidding ISPs from discriminating against packets on their networks, won a victory on Thursday. Their case against the FCC’s net neutrality rules will go forward.
The D.C. Circuit Court of Appeals, the same court that had ruled against the FCC’s authority to impose rules that govern the services flowing over the Internet, will hear the case. It also denied the FCC’s request to hold off on a hearing while the agency considered a petition before it, asking for further definition of its rules regarding “specialized services” for business customers. Analysts at Stifel Nicolaus and Co. expect the court to set a schedule this spring with oral arguments in the fall. The group expects a ruling by winter.
And apparently it doesn’t expect the results to favor the FCC, which could be a blow to Silicon Valley companies leery of schemes by telecommunications providers to charge them for accessing their pipes, as well as for consumers who already pay for Internet access and expect their bits to keep on flowing unabated. From the Stifel research note:
A D.C. Circuit three-judge panel in April 2010 undercut the FCC’s broadband regulatory authority under its Title I “ancillary” jurisdiction in shooting down a 2008 order sanctioning Comcast (CMCSA) for its treatment of BitTorrent P2P traffic. The FCC tried to write its December 2010 Open Internet order to respond to the court’s objections by citing other sources of statutory authority, and there could be a different panel this time, but the judges will still be bound by the precedent from the previous ruling, making the FCC’s task difficult, in our opinion.
If the FCC loses, the next stop is the Supreme Court. In the meantime, and if the nation’s top court decides to favor the telcos, the FCC could be stripped of its authority to regulate the nation’s cable, DSL and wireless Internet providers, thanks to regulatory decisions the agency made when the web was young. That means the FCC would turn from a letter-writing gadfly occasionally stepping in on behalf of consumers to a powerless relic of an agency as the web becomes more central to our lives.
Hear that Internet fans? Winter is coming.