Delaying Net Neutrality Rules Threatens 'Edge Economy,' FCC Says

AT&T, CenturyLink and a coalition of trade groups recently asked a federal appellate court to stay a portion of the Federal Communications Commission's historic decision to impose net neutrality rules.

AT&T and the others say they are not asking to nix all of the new regulations. Specifically, the companies aren't asking to delay the three new “bright line” rules, which prohibit providers from blocking or degrading traffic and from creating paid fast lanes. Instead, AT&T and the other challengers hope to stay the FCC's decision to regulate broadband as a utility.

But the Federal Communications Commission and Justice Department say in new legal papers that the bright-line rules won't be enforceable on their own.

“Make no mistake,” the FCC and DOJ say in their papers opposing the request for a stay. “If petitioners obtain a stay of the FCC’s decision to reclassify broadband ... those bright line rules will be temporarily gone.”

The FCC and DOJ point out that the D.C. Circuit Court of Appeals voted in 2014 to invalidate a prior version of open Internet rules. Those rules prohibited broadband providers from blocking or degrading traffic, and also prohibited wireline (but not wireless) providers from engaging in unreasonable discrimination. The appellate court nixed those regulations on the grounds that the FCC only had authority to prohibit operators of common-carrier services from blocking or degrading traffic.

Net neutrality supporters -- including President Obama -- reacted to that decision by urging the FCC to reclassify broadband as a common-carrier service.

The agency did so in February, when it voted 3-2 to enact sweeping open Internet rules. In addition to the bright-line rules, the agency broadly prohibited carriers from hindering consumers and content companies from reaching each other. The FCC hasn't yet fleshed out how it intends to apply that standard. Instead, the agency said in its order that it will take a case-by-case approach to questions like whether broadband companies' use of data caps violates the open Internet principles.

Unless a court stays the rules, they will take effect on June 12.

AT&T and the other opponents said in their request for a stay that they will suffer financial loss due to uncertainty over the FCC's proposed case-by-case approach.

But the Obama administration disagrees, arguing that consumers and content companies will be the ones hurt by delaying the rules.

“The absence of open Internet rules and standards would chill the 'edge economy' -- the tremendous innovation that has come from web-based services and, more recently, through the creation of 'apps'," the agencies argue.

They add that a stay would “harm consumers, leaving unprotected their ability to access Internet content, applications, and services of their choosing without broadband provider interference.”

“The resulting threat to Internet openness would seriously impair the ability of Americans to use the Internet,” the FCC and DOJ write.

A broad coalition of net neutrality supporters -- including public interest groups like Public Knowledge and companies like Netflix and Etsy -- also filed papers today urging the appellate court to reject the carriers' request for a stay.

AT&T and the others are expected to file their next round of arguments by May 29.

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