Not So Fast: Some Businesses Sue Over Net Neutrality

net neutrality lawsuit

Opponents of the Federal Communications Commission’s “net neutrality” rules are getting their day in court.

The U.S. Court of Appeals for the District of Columbia will be hearing oral arguments against the FCC’s decision on December 4 in Washington, D.C., Reuters reports.

The Federal Communication Commission voted by majority in February to follow rules that would block ISPs from creating so-called “fast lanes” for priority traffic. The decision was viewed as being in favor of small businesses, entrepreneurs and consumers.

But on the other side of the issue other businesses — including Internet providers and telecom companies like Verizon and AT&T — argue the new rules will be an impediment for all.

Following the ruling in February, Michael E. Glover, Verizon senior vice president of public policy and government affairs, insisted:

Today’s decision by the FCC to encumber broadband Internet services with badly antiquated regulations is a radical step that presages a time of uncertainty for consumers, innovators and investors.”

But during the hearing, FCC Chairman Tom Wheeler argued:

This is the FCC using all the tools in our toolbox to protect innovators and consumers to ban paid prioritization … Consumers will get what they pay for, unfettered access to any lawful content on the Internet.”

Supporters of Net Neutrality insist all content on the Internet should be treated equally. This would prevent larger companies, such as Amazon or Netflix, from paying to have their data given priority over data from a small business’s site, for example.

Independent legal and policy consultant John Windhausen Jr. who specializes in broadband issues framed the argument this way in a white paper for Public Knowledge published (PDF) back in February 2006:

At its best, the Internet is an enabling and empowering technology — it enables consumers to use whatever equipment they desire to access whatever information, services, and applications they choose, and it enables innovators and entrepreneurs to invest in new equipment, content and applications. But the openness of the Internet is no longer guaranteed.”

Windhausen explained:

Network operators have already blocked some traffic and are likely to block more in the future. Economic studies indicate that network owners can reap additional profits by favoring their own or their affiliated traffic, and some companies are marketing equipment to make blocking or discrimination even easier in the future.”

For small business owners with a Web presence or online startups the benefits of a free Internet where all content is given the same priority is clear.

That’s why advocacy organizations like the Small Business and Entrepreneurship Council have long taken a stand in favor of Net neutrality.

On the other side of the argument, however, U.S. Telecom, a trade organization representing telecommunications companies, says the FCC violated a variety of laws and regulations by arriving at its decision.

Some of these businesses have already begun to feel the negative impact of the new rules.

In June, the FCC announced it would fine AT&T $100 million alleging the company slowed Internet speeds for customers who had purchased “unlimited” data plans.

The action sends a clear signal that any Internet provider or telecommunications business intending to flaunt the commission’s new rules could face similar penalties.

U.S. Court of Appeals, Washington, D.C. Photo via Shutterstock


Tabby McFarland Tabby McFarland is a staff writer and web researcher for Small Business Trends. As a staff writer she specializes in social media, technology, special interest features, and e-commerce. A geek at heart, Tabby loves to be online interacting with the blogging community. Tabby is a WAHM (work at home mom) and is also an avid Pinterest enthusiast with a strong sense of style and creativity.

2 Reactions
  1. I support net neutrality because the last thing Verizon and friends need is more leverage to screw the average consumer and SMBs.

    • Robert,

      I am against the net neutrality lawsuit on principle. I think the free market should decide on how transport the traffic in the best way, according to the law of supply and demand. The so called Federal “Trade” Commission has nothing to do with this issue.

      If you get less regulations, rules and red tape, you will be able to find alternative suppliers with good customer service… Many of the tel.cos have had hand-outs and been owned by the State.

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