Verizon Is Looking Victorious in Battle Against FCC
Oral arguments from the Federal Communications Commission and Verizon Communications (NYSE:VZ) were heard on Monday, and The Wall Street Journal reports that the FCC’s net neutrality rules may not be able to stand up to scrutiny from a federal appeals court.
The net neutrality rules imposed by the FCC in 2011 say that Internet providers must treat all types of online traffic equally. Verizon is challenging those rules, as it wants to be able to charge more money to Internet companies that take up more bandwidth. The FCC says that eliminating those rules will inhibit innovation, as smaller websites won’t be able to pay Internet providers for the space they might need. “The next Google or Facebook might never begin” without the FCC’s regulations, the government organization said in a statement.
The U.S. Court of Appeals for the District of Columbia has been harsh on the FCC before in regards to the net neutrality rules, and the court voiced similar concerns in the 2010 case the FCC lost to Comcast Corp. (NASDAQ:CMCSA).
In the Monday hearing, the judges said they were skeptical about the FCC disallowing Internet companies to pay Web providers to have better, faster access to their consumers, according to the Journal. The judges did express some willingness to allow the FCC to prevent Internet providers from blocking traffic from websites that can’t or won’t pay for their content to be made available through the network of any given provider.
Overall, Internet providers would like companies such as Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOG), which take up huge amounts of bandwidth, to help share the cost of that traffic. Judge David Tatel supported Verizon’s belief that it should be able to charge the providers of certain high-traffic content, and also said that the FCC could continue to stop Internet providers from blocking any websites that don’t pay for transmission.
Netflix is a particular area of concern, as the video streaming site accounts for a third of the Internet traffic in America on any given night, the Journal reports. Verizon has already fielded complaints about poor Netflix performance caused by overcrowded network ports from its users. Instead of arguing with other Internet providers, Verizon could solve the problem by charging Netflix to help bear the weight of all that traffic.
For now, it seems as if at least some of the FCC’s Open Internet Rules will be thrown out by the court. What remains to be seen is if the court will allow the regulator to continue to monitor Internet traffic.
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