An appeals court throws out the FCC’s “net neutrality” rules on Internet traffic. The ruling could raise Internet service fees and stifle innovation, some say.
A federal appeals court swept aside government regulations designed to ensure equal access to the Internet, raising the prospects of higher fees for consumers and more barriers for start-ups seeking to compete online.
The decision Tuesday could allow AT&T Inc., Verizon Communications Inc. and other Internet service providers to charge the likes of Netflix and YouTube more money to deliver movies and video to their customers.
The ruling also throws into disarray the efforts of the Federal Communications Commission to limit telecom and cable firms from discriminating against certain Internet traffic by slowing speeds, impeding access or raising fees.
The issue, known by the wonky term “net neutrality,” involves complex technical and policy rules. But at its core, the concept comes down to a classic debate about how far government could and should go to ensure a level digital playing field.
“There is the potential for the world to change substantially” in terms of how the Internet is run, said Jeffrey Eisenach, director of the Center for Internet, Communications and Technology Policy at the American Enterprise Institute think tank. “This is a big deal.”
The FCC, which long has made net neutrality a top priority, faces once again a tricky calculation about how to balance the need for consumer and small-business protections against a desire to let the free market run its course.
In the short term, the ruling left big telecom companies, small businesses, government agencies and consumers scrambling to understand its effect and making their cases about how they believe the FCC should proceed.
The fear among net neutrality supporters is that absent strong regulations requiring service providers to treat all traffic equally, the Internet eventually becomes a realm of digital haves and have-nots.
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