Verizon challenges new net-neutrality rules in court

The company is taking the case to the same federal court that ruled last year that the FCC had exceeded its legal authority in sanctioning cable giant Comcast Corp. The agency had cited Comcast for discriminating against online file-sharing traffic on its network—violating broad net-neutrality principles first established by the agency in 2005. Those principles served as a foundation for the formal rules adopted by the commission last month.

Last year’s court ruling forced the FCC to look for a new framework for regulating broadband to ensure the commission would be on solid legal ground in adopting net neutrality and other rules. The agency currently treats broadband as a lightly regulated “information service,” as opposed to phone service, which is more heavily regulated as a so-called “common carrier.”

At one point, FCC Chairman Julius Genachowski proposed redefining broadband as a telecommunications service subject to common carrier obligations to treat all traffic equally. But he later backed down in the face of fierce opposition from the phone and cable companies, as well as many Congressional Republicans.

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And he now argues that the agency has ample authority to mandate net neutrality under the existing regulatory framework for broadband—an assumption that will be tested in the Verizon court challenge.

A senior FCC official said Jan. 20 that the agency is confident that its new net-neutrality rules are legally sound and is prepared to defend them.

The rules represented an attempt to craft a compromise on an issue that has divided the telecommunications and technology industries. On one side, internet companies such as Skype, as well as public interest groups and many education organizations, argue that strong rules are needed to prevent broadband providers from becoming online gatekeepers that can dictate where people go and what they do online.

But the big phone and cable companies insist that they need flexibility to manage internet traffic to keep their networks running smoothly and preventing bandwidth-hogging applications from slowing down their systems. They also maintain that they should be able to charge extra for special services over their broadband lines and earn a healthy return on the billions of dollars they have spent on network upgrades.

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