On January 14, 2014, the D.C. Circuit issued its opinion in Verizon v. FCC (News - Alert), finding that the FCC’s Open Internet (i.e., network neutrality) rules prohibiting broadband providers from discriminating against third-party content and prohibiting the blocking of third-party content, exceed the FCC’s authority under the Communications Act because it aimed to impose typical common carriage requirements on broadband providers. 

While largely taking the teeth out of the FCC’s Open Internet rules, the Court also found that the FCC has authority over broadband Internet services under Section 706 of the Telecommunications Act, which directs the FCC to encourage broadband deployment on a reasonable and timely basis and take steps to accelerate broadband deployment when such deployment is lagging. This conclusion might prove useful if the FCC attempts to revise its Open Internet rules or decides to take other measures to foster broadband deployment.  

The court also upheld the FCC’s “Disclosure Rule,” and hinted at the possibility that the FCC, on remand, might be able to adopt an anti-blocking rule that survives judicial review.

The court’s decision was largely a victory for Verizon (News - Alert) and other broadband providers that want more flexibility in the way they manage their networks and relationships with online services and content providers, end user customers, and other network operators.  In a press release, Verizon stated that the decision will not change consumers’ ability to access and use the Internet as they do now, but will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet. The FCC’s chairman released a statement that the FCC is considering all options, including an appeal.  

William B. Wilhelm (News - Alert) is a partner and Jeffrey R. Strenkowski is counsel at the global law firm of Bingham McCutchen LLP (www.bingham.com).