The Federal Communications Commission’s (FCC) recent adoption of net neutrality laws is being questioned by industry trade group the U.S. Telecom Association and Texas-based small telecom operator Alamo Broadband Inc.
While U.S. Telecom has filed a lawsuit in the U.S. Court of Appeals for the District of Columbia for a stay on the implementation of the new rules, Alamo Broadband has turned to the FCC in the U.S. Court of Appeals for the Fifth Circuit in New Orleans.
On Feb 26, the FCC endorsed net neutrality laws after a favorable voting margin of 3-2. The new laws will classify high-speed broadband (Internet) as a public utility under Title II of the 1934 Communications Act instead of section 706 of the 1996 Telecom Act.
The regulations will be applicable to both mobile and fixed broadband networks. The reclassification of the Internet makes a radical change in the way the government treats high-speed broadband service and Internet Service Providers (ISP). The FCC can strongly regulate the ISPs now.
The implementation of the new law will ban common ISP practices such as data traffic blocking, slowing any data traffic and paid prioritization. Notably, paid prioritization is a method through which content developers strike deals with ISPs for quick and smooth transmission of their data traffic.
The FCC will closely monitor and put a check on all such deals in the future. Moreover, the FCC will also supervise interconnection deals, in which content developers pay ISPs to connect with their networks.
All ISPs, along with several cable and telecommunications industry bodies, have vehemently opposed net neutrality. Notably, Republican senators are also not in favor of this new directive. These groups believe that a slight law reformation under section 706 of the 1996 Telecom Act will be enough to enforce net neutrality.
The major argument, however, stands that the ISPs have to expend several billion dollars to install and upgrade high-speed mobile/fixed broadband network. Disallowing discriminatory pricing policy will significantly reduce their revenues and margins, which will in turn result in lower investments in the high-speed broadband sector. Consequently, broadband equipment service providers will suffer (due to lesser investment by ISPs) and lots of jobs will be eliminated from this sector.
Importantly, the U.S. Telecom Association has Verizon Communications Inc. VZ, AT&T Inc. T and CenturyLink Inc. CTL as its members, to name a few. Comcast Corp. CMCSA, the largest cable MSO (multi-service operator) also intends to take legal action against the FCC.
Earlier, Reuters reported that large industry trade groups like National Cable & Telecommunications Association (NCTA) and CTIA are also planning to sue the FCC over net neutrality. In addition, the American Cable Association (ACA), representing smaller and independent cable operators, may also follow suit.
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