Appeals panel hands FCC a win in 'net neutrality' battle

Handing President Obama a big victory, a federal appeals court Tuesday upheld "net neutrality" regulations that forbid high-speed internet providers from closing off parts of the Web to consumers or slowing internet speeds to degrade Web services.

The rules also expand the Federal Communications Commission's powers to oversee the rapidly growing communications platform as it would a utility.

Obama pledged support for the protections when he ran for president in 2008, and he supported the FCC from the White House.

Advocates praised Tuesday's decision by a three-judge U.S. Court of Appeals panel in Washington, with U.S. Rep. Anna G. Eshoo (D., Calif.) saying it was "a great day for internet users."

Supporters of the rules have warned for years that big telecommunications companies could interfere with new online streamers, such as Netflix or YouTube, that compete with legacy entertainment companies.

The belief is that internet providers could limit access or harm the quality of websites that compete with their own or affiliated sites. The rallying cry has been that all internet traffic should be treated equally, or neutrally.

Providers such as Comcast, Verizon, and AT&T said the resulting rules threaten innovation and undermine investment in broadband infrastructure. The telecom companies and other critics argued that the new rules, passed in early 2015, were beyond the FCC's congressional mandate and a regulatory power grab.

On Tuesday, AT&T said that it would support an appeal of the ruling and that it expects the issue to be decided by the U.S. Supreme Court.

U.S. Sens. John Thune of South Dakota and Roger Wicker of Mississippi, Republican members of the Senate Commerce Committee, said the appeals court's decision would "saddle the internet with restrictions designed for the monopoly telephone era."

Comcast, which now has more internet subscribers than TV subscribers and has opposed the new FCC rules, had no comment Tuesday.

The National Cable & Telecommunications Association said the decision was "unlikely the last step in this decade-long debate over internet regulation." U.S. Telecom, a Washington trade association of broadband providers, was the lead plaintiff. Its representatives could not be reached for comment.

The FCC approved the new regulations in February 2015, after a decade of debate and two previous court cases it lost. In a blog post at the time, Obama wrote that "more than 4 million people wrote in to the FCC, overwhelmingly in support of a free and fair internet. Countless others spoke out on social media, petitioned their government, and stood up for what they believe."

Based on court documents released Tuesday morning, the three-judge U.S. Court of Appeals panel decided the case, 2-1, in the FCC's favor.

In their 115-page opinion, Judges David S. Tatel and Sri Srinivasan wrote that mass-market high-speed internet providers such as Comcast were more like telephone companies than cable-TV firms or newspaper publishers that exercise discretion over content they offer subscribers.

Just as phone companies connect callers on a telephone network without discretion, internet providers grant access to "substantially all" internet websites, the judges wrote.

They agreed with reclassifying internet providers as telecommunication services, subject to new regulations under federal laws, as compared with their previous classification as information services.

Senior Judge Stephen F. Williams disagreed and in a dissenting opinion called the FCC's new rules an "unreasoned patchwork" that "shunts broadband service onto the legal track suited to natural monopolies."

FCC chairman Tom Wheeler said in a statement that the court decision was a "victory for consumers and innovators who deserve unfettered access to the entire Web, and it ensures the internet remains a platform for unparalleled innovation, free expression and economic growth."

Though the FCC has said it would not regulate internet rates - that is, what consumers pay in their monthly bills - with the new rules, telecommunications companies warn that the rules could open the door to such rate regulation.

Hannah Sassaman, policy director for the nonprofit Media Mobilizing Project, an advocacy group in Philadelphia, said the "court fully affirmed the Federal Communications Commission's power to regulate the internet for consumers, not for Comcast."

bfernandez@phillynews.com

215-854-5897@bobfernandez1