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CAGW Reacts to DC Circuit Court Ruling on Net Neutrality
[January 14, 2014]

CAGW Reacts to DC Circuit Court Ruling on Net Neutrality

WASHINGTON --(Business Wire)--

Today, the United States Court of Appeals for the District of Columbia Circuit (DC Circuit) issued its decision in the Verizon v. Federal Communications Commission (FCC (News - Alert)) petition for review and notice of appeal of the FCC's December 2010 Open Internet Order. Citizens Against Government Waste (CAGW) has consistently opposed these unfair rules on Internet service providers.

The notion of equality on the Internet may sound reasonable, but net neutrality is instead an attack on private-sector business models. Proponents of net neutrality want the online world to be forced "open" at the expense of successful Internet providers, but fail to recognize the many tradeoffs to "openness," such as increased spam, fewer privacy controls, slower service, and, perhaps most importantly, decreased incentives for inestment and innovation.

The court's decision provides clarity to the scope of the FCC's authority over the Internet. While affirming that the FCC has some authority to regulate broadband services under certain sections of the Communications Act, the court found that the FCC overstepped its bounds when it subjected Internet providers to treatment as "common carriers" under the Open Internet Order through the anti-discrimination and anti-blocking rules on Internet services.

Prior to the Open Internet Order, the FCC had previously classified Internet access as an "information service" as opposed to a "telecommunications service" which is regulated under "common carrier" provisions of the Communications Act of 1934. The court affirmed that broadband is not subject to "common carrier" rules, and remanded the case back to the FCC for further proceedings. As FCC Commissioner Ajit Pai stated in response to the court's ruling, "Unless Congress acts, we should stay our hand and refrain from any further attempt to micromanage how broadband providers run their networks. We should focus on removing regulatory barriers to broadband deployment, not imposing unnecessary rules that chill infrastructure investment."

"The FCC acted out of bounds when it attempted to fix perceived problems by preemptively imposing unfair rules on the innovators who have invested more than $1.2 trillion in building out broadband services since 1996," said CAGW President Tom Schatz. "By rejecting the FCC's attempt to redefine Internet access as a 'common carrier' service by regulatory fiat, and striking down provisions that treat it as such, the court has preserved the Internet for more innovation, allowing it to continue to be a driving dynamic economic and social force in the twenty-first century. Today's court decision is a positive step forward to keeping the Internet truly free and open."

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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