As expected by many in the legal community, Verizon has filed a legal challenge of the recent Federal Communications Commission’s (FCC) Report and Order on regulations dealing with net neutrality. The suit, which the corporation filed on January 20, 2011 in the United States Court of Appeals for the District of Columbia, takes issue with the FCC’s claim to broad authority over broadband networks and the Internet. The order places specific restrictions on mobile broadband providers and fixed broadband providers that Verizon contends exceed the scope of FCC’s jurisdiction.
Verizon’s decision to file its challenge in the U.S. Court of Appeals for the District of Columbia is anything but random. This is the very same appeals court that sided with communications giant Comcast against the FCC in a case regarding discrimination against network traffic. Verizon chose to file in this particular court in the hopes of enjoying an advantage in its uphill legal challenge.
In order to justify its decision to file its appeal in the U.S. Court of Appeals for the District of Columbia, Verizon contended that the net neutrality guidelines concern the modification of FCC licenses. Those types of cases — the ones that involve license modifications — are always handled by this particular court. Had Verizon filed its appeal in any one of the many other courts that are available, its odds of success would have been greatly diminished.
The biggest issue facing Verizon in its appeal concerns the jurisdiction and regulatory powers of the FCC. The FCC was created by the Communications Act of 1934, which gave the Commission strong regulatory powers. The Act charged the FCC with regulating international and interstate communications by satellite, television, wire, radio and cable, many of the systems essential to Verizon operations. Naturally, onlookers are wondering whether the legal challenge will give rise to additional lawsuits that could ultimately strip a great deal of power from the FCC.
Net neutrality opponents believe that the existence of the FCC dooms networks and providers to failure, which is largely why Verizon has acted so expediently against the new order. Under the network neutrality order, three significant rules go into effect. First, mobile and fixed broadband providers must be utterly transparent about their network management practices. Second, net neutrality rules forbid fixed broadband providers from blocking in general; mobile broadband providers may block applications but not competitive services. Finally, fixed broadband providers may not engage in unreasonable discrimination; mobile broadband providers, on the other hand, must justify any discrimination that they use.
Those who are in favor of net neutrality believe that it will keep the Internet free and open. However, opponents have grave concerns about the need for stricter controls over things like spam and malicious servers. Under net neutrality rules, broadband providers will have diminished capabilities for handling such issues. In turn, the Internet-using public may be subjected to greater security risks and other problems.
While the FCC’s net neutrality order released in December 2010 and Verizon’s subsequent appeal are generating a great deal of buzz, the fact remains that it is still early in the game. Ultimately, the court’s decision in the Verizon challenge will largely dictate the direction in which this issue will go. The legal community, communications industry and free internet advocates will be watching this case with interest.