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Polsinelli Intellectual Property & Technology


March 2015


FCC's Decision on Net Neutrality Likely to Lead to Litigation







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Maggie M. Arcaro



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Michael P. Dulin



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Patrick C. Woolley

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Gregory P. Durbin

Practice Area Vice Chair


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Kathryn J. Doty

Practice Area Vice Chair


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In a historic 3-2 vote on Thursday, February 26th, the Federal Communications Commission (FCC) voted to approve net neutrality rules aimed at governing Internet traffic. The FCC's decision would expand government oversight for Internet service by treating it as a "public utility" or "common carrier service" under Title II of the 1996 Telecommunications Act. Historically, only fixed broadband services (i.e., cable and telephone) have been regulated under Title II. This new regulation will require Internet service providers (ISPs) to treat all Internet traffic equally, meaning they will be prohibited from activities such as charging "prioritization" fees to certain websites demanding faster download speeds, or blocking or degrading certain users' Internet access.

Several major telecom companies, including AT&T, Comcast, T-Mobile, and Verizon are expected to challenge the FCC's decision on the grounds that it lacks the authority over ISPs. Following Thursday's ruling, Comcast's executive vice president, David Cohen, warned that litigation was inevitable and that Comcast may consider canceling plans to develop its own broadband network in light of the increased regulation. AT&T and Verizon have previously issued warnings that they would challenge any action by the FCC to enact Title II against ISPs.

Telecom companies are joined in opposition to the ruling by members of the Republican Party, who believe increased government regulation of the Internet will discourage investment in Internet-related business. Opponents of net neutrality argue that a government-mandated equal playing field will result in both higher rates being charged to consumers as well as slower broadband speeds overall.

The FCC's action has been driven at least in part by the dramatic increase in consumer demand for video and content streaming services provided via the Internet. Services such as Netflix, Hulu, and Amazon Prime Instant require fast download speeds in order to provide video content to their subscribers, and competition among these streaming services is fierce. Technical issues such as freezing, rebuffering or poor video quality may lead to a loss of subscribers. As streaming services continue to demand faster and faster download speeds, ISPs have resorted to implementing measures such as data caps and priority pricing. These types of measures would be prohibited under Title II, which would require all Internet traffic to be treated equally.

In addition to the threat of impending litigation, the FCC is also facing three congressional investigations aimed at determining whether the White House improperly influenced the decision-making of FCC Chairman Thomas Wheeler. The details of the FCC's ruling will remain unknown until the order is published in the Federal Register, which could take weeks. Until then, the telecom giants will be watched closely for signs of impending litigation.

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* Law360, March 2014
** The American Lawyer 2013 and 2014 reports







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