This week, the Court of Appeals for the D.C. Circuit upheld the Federal Communications Commission’s (FCC) net neutrality rules. The net neutrality rules in place prevent internet service providers (ISPs) from blocking, disrupting, or diminishing internet traffic that may not be profitable. The rules effectively classify high-speed internet as a public utility, like water or electricity, and a necessity, rather than as a luxury item.

“Net neutrality” requires an ISP to treat all of its traffic equally. This protects consumers by preventing ISPs from granting additional bandwidth or speed to websites that pay the ISP more, in the same way that water companies are not allowed to slow down water flow to poorer service areas. This would effectively slow down any other sites that could not or would not pay that premium. Without this protection in place, if Netflix paid Comcast a sum of money, Comcast could prioritize Netflix’s traffic over Hulu’s, slowing down Hulu’s service and making Hulu annoying or impossible to use. This could have the side effect of driving traffic straight over to Netflix for smooth, glitch-free streaming video.

Unsurprisingly, this is a hotly contested issue, typically with consumers and consumer advocates on one side and telecommunications companies on the other. AT&T has already announced that it will appeal the ruling, and will likely find support from other telecommunications giants like Verizon and Comcast. The issue boils down to economics. Some believe that the current FCC net neutrality rules requiring all ISP’s to treat all internet traffic identically will discourage investment in service providers and interfere with economic growth.

Arguments For and Against Net Neutrality

The arguments against current net neutrality focus on the burdens it can place on the ISPs. “There’s a better way to protect consumers from blocking and throttling without stifling innovation or delaying build-out,” said Rep. John Shimkus (R-Ill.), believing that these regulations will harm the ISPs—and, down the line, harm consumers. Some believe that the equal-access regulations are archaic, like the original telephone regulations, and that they interfere with free speech.

The Chairman of the FCC, Tom Wheeler, applauded the D.C. Court, saying, “Today’s ruling is a victory for consumers and innovators who deserve unfettered access to the entire Web, and it ensures the internet remains a platform for unparalleled innovation, free expression, and economic growth.”

In a world where only a few large ISPs carry the vast majority of the United States’ web traffic and have virtual monopolies on large swathes of the country, the FCC argues that allowing content companies to buy priority access to the internet is unfair. In the example above, in which Comcast pushes out Hulu’s traffic in order to make room for Netflix, this could effectively eliminate Hulu as an option for tens of millions of people who don’t have an alternative ISP to Comcast.

At the same time, an argument from Netflix’s and Comcast’s perspectives is that Netflix can spend its advertising revenue where it sees fit, and enter into a mutually agreeable contract with Comcast to promote its business. Comcast, too, is allowed to do business as it sees fit, accepting that payment or advertising consideration from Netflix and giving Netflix something in return (prioritized bandwidth access). This type of First Amendment argument, that using money to promote a certain type of speech is a valid exercise of freedom of speech, has been argued in campaign finance cases around the country.

This case will likely end up at the Supreme Court, and it will be an interesting battle, with substantial case law supporting both sides.

For more information about internet regulations, contact Revision Legal’s team of experienced internet attorneys through our contact form or by calling 855-473-8474.

Image courtesy of Flickr user Sean Weigold Ferguson

Net Neutrality’s Legal History and What It Means for Online Businesses

The D.C. Circuit’s 2016 ruling upholding the FCC’s Open Internet Order was not the end of the net neutrality legal saga — it was one chapter in an ongoing battle over how the internet is regulated and who has the power to set the rules. Understanding that history provides essential context for businesses that depend on open internet access to reach customers.

The Legal Basis for FCC Net Neutrality Authority

The FCC’s authority to impose net neutrality rules rested on its classification of broadband internet service as a telecommunications service under Title II of the Communications Act of 1934. The D.C. Circuit’s affirmance in United States Telecom Association v. FCC, 825 F.3d 674 (D.C. Cir. 2016), held that the FCC’s decision to reclassify broadband as a Title II telecommunications service was a lawful exercise of its statutory authority. The critical legal vulnerability of this approach was that FCC policy — unlike a statute passed by Congress — can be reversed by a subsequent Commission. In 2017, the FCC reversed the 2015 classification, eliminating the Title II-based net neutrality rules. The D.C. Circuit largely upheld that 2017 reversal in Mozilla Corp. v. FCC, 940 F.3d 1 (D.C. Cir. 2019). The FCC’s 2024 effort to reinstate Title II classification was subsequently vacated by the Sixth Circuit, leaving the regulatory status of net neutrality in flux.

State Net Neutrality Laws

Following the FCC’s 2017 rollback, several states moved to fill the regulatory gap. California enacted SB 822 in 2018 — one of the strongest state net neutrality laws in the country — prohibiting ISPs operating in California from blocking, throttling, or engaging in paid prioritization arrangements. Washington, Oregon, and Vermont have enacted net neutrality protections of varying scope. This creates a complex compliance landscape for ISPs operating nationally, and potential legal exposure for discriminatory traffic management practices even in the absence of comprehensive federal rules.

Implications for Online Businesses and Content Providers

For businesses that operate entirely online — e-commerce stores, SaaS companies, content platforms, law firms with significant web presences — the net neutrality debate is not abstract. Without net neutrality rules, ISPs could charge content companies for priority delivery, creating a two-tier internet in which well-funded competitors receive faster connections while smaller businesses are penalized with slower service. ISPs could throttle bandwidth to specific categories of services unless those services pay access fees, increasing operating costs for content-dependent businesses. In the most extreme scenario, ISPs could block access to competing services or disfavored content entirely, foreclosing market access for businesses that cannot negotiate carriage agreements with each major ISP.

The Chevron Doctrine’s Collapse and Its Regulatory Implications

The Supreme Court’s June 2024 decision in Loper Bright Enterprises v. Raimondo overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984), eliminating the doctrine under which courts deferred to agency interpretations of ambiguous statutory language. This ruling significantly constrains the FCC’s ability to assert regulatory authority over broadband internet under broad statutory mandates without specific congressional authorization. Future net neutrality rules will face stricter judicial scrutiny of the FCC’s statutory authority than was applied to the rules upheld in 2016. Businesses seeking predictable long-term internet regulation increasingly recognize that durable net neutrality protection requires a congressional statute rather than an administrative rule.

If you have questions about how internet regulation affects your online business or need counsel on data privacy, internet law, or regulatory compliance, Revision Legal’s internet attorneys are available to assist. Contact us through the form on this page or call 855-473-8474.