Court Vacates Key FCC Net-Neutrality Rules; Upholds Transparency Requirement

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The U.S. Court of Appeals for the D.C. Circuit (Circuit Court) struck down the FCC’s antidiscrimination and blocking rules, which prevented Internet service providers (ISPs) from prioritizing or blocking lawful content, applications, services, or non-harmful devices, including competitive voice or video telephony services. The FCC reasoned these rules were necessary to protect edge-providers (i.e. Netflix and Hulu) whose innovations would lead to the deployment and improvement of broadband infrastructure.

While the Circuit Court upheld the FCC’s transparency rules, which require ISPs to disclose their network management practices, it vacated the FCC’s antidiscrimination and blocking rules.  The Circuit held that the FCC did not have jurisdiction to impose these common carrier rules on ISPs, which the FCC had chosen to classify as information services and not subject to common carrier regulations.  This ruling opens the door to ISPs providing affiliated content providers and/or fee-paying edge providers with better service and better access to subscribers as long as they are up front about it.  FCC Chairman Tom Wheeler has indicated the FCC is considering appealing the decision.

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