Verizon Wins Against FCC: Is Net Neutrality Over?
Verizon Communications (NYSE:VZ) has won a suit against the Federal Communications Commission regarding its ability to charge certain Internet content providers for the amount of bandwidth their services use, Bloomberg reports. On Tuesday, an appeals court in Washington D.C. ruled that the FCC was overstepping its bounds by trying to bar Internet providers from blocking certain kinds of online content or charge the companies that take up the most bandwidth a higher fee. The current rules required Internet providers to give the same high-speed service to all types of Internet traffic equally, but now a court has sent the rules back to the FCC to be rewritten.
FCC Chair Tom Wheeler said per Bloomberg that the agency will appeal the ruling, as it believes that, “These networks on which the Internet depends continue to provide a free and open platform for innovation and expression.” With the rules back on the drawing board, the possibility is now open for Verizon to charge popular companies like Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) for the high amount of traffic they draw.
The FCC believes that such a practice will result in wealthier companies getting more favorable Internet access than start-ups and other small companies. The FCC believes it has to make sure the Internet remains an open place, or else innovation could be stunted and, “The next Google or Facebook might never begin,” the commission said in a statement seen by the Wall Street Journal when the case was heard back in September. Obviously, companies like Netflix aren’t happy about the possibility of being charged for the high traffic they draw. A spokesperson for Netflix who spoke to the Journal said, “consumers pay for high-speed broadband, which is an incredibly lucrative business for the Internet service providers” in order to “get services like Netflix.”