FCC Net Neutrality Case Rehearing Rejected by Appeals Court

(Bloomberg) -- A U.S. appeals court upheld the Federal Communications Commission’s so-called net neutrality rule barring internet service providers from slowing or blocking rivals’ content.

The court’s ruling last year was a triumph for companies such as Netflix Inc. and Alphabet Inc.’s Google. It was a substantial setback for AT&T Inc., Verizon Communications Inc. and Comcast Corp., which lost the opportunity to slow or even block the transmission of disfavored content.

The Washington-based court’s ruling Monday may be overtaken as the regulator moves to revise the regulation.

FCC Chairman Ajit Pai, a Republican in office since January, last week proposed rolling back key aspects of the measure, such as allowing so-called fast lanes offering quicker passage over networks to companies that pay more. The agency plans to seek comment before voting on a revised rule that would overtake the current regulation.

Amy Schatz, a spokeswoman for the United States Telecom Association, the industry group that led the legal battle, said the organization had no immediate comment on the ruling. The group had sought reconsideration of last year’s three-judge decision by a full complement of appellate judges.

The appeals court acted after a decade of debate about web access that pitted Silicon Valley against companies that provide internet access to homes and businesses. The court likened internet service providers to utilities, saying they “act as neutral, indiscriminate platforms for transmission of speech” and can be regulated in the same manner as telecommunications.

A different panel in 2014 rejected the FCC’s efforts to implement Internet-traffic rules in a case brought by Verizon, concluding the regulator had tried to treat broadband-service providers as common carriers, after previously classifying them as exempt from that designation.

The case is US Telecom Association v. FCC, 15-1063, U.S. Court of Appeals, District of Columbia (Washington)