Broadband providers prefer the flexibility of evolving as the Internet evolves. They want to be able to experiment with business models — including the creation of special charges for priority treatment. Even if providers don't intentionally slow traffic from content companies that choose not to pay, the effect would be the same if their rivals get faster delivery to consumers by paying.
The appeals court affirmed that the FCC had authority to create open-access rules, but it ruled that the FCC failed to establish that its 2010 regulations don't overreach.
The judges said those regulations treated all Internet service providers as common carriers — a general term for airlines, utilities and other transporters of people or goods for the general public on regular routes at set rates. But the court said the FCC itself already had classified broadband providers as exempt from treatment as common carriers, which set up a legal contradiction.
FCC Chairman Tom Wheeler said the commission will now consider its options, including an appeal.
The FCC also could draft new rules or reclassify broadband providers, or Congress could change the 1996 telecommunications law that gave the commission different authority depending on whether a company was a common carrier or not.
Concerns about discrimination grew in 2007 after The Associated Press ran tests and reported that Comcast Corp. was interfering with attempts by some subscribers to share files online through a service called BitTorrent. Although Comcast said it did so because BitTorrent was clogging its networks, public interest groups grew worried that broadband providers were becoming gatekeepers of online content. After all, the files exchanged through BitTorrent included video, something that threatens Comcast's cable TV business.
Comcast's actions drew rebuke from the FCC and a pledge by all of the major broadband providers including Comcast not to discriminate. The 2010 rules were meant to ensure that such open access continued.