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Net neutrality may be poised for a Supreme Court showdown

(Damian Dovarganes/Associated Press)

A federal appeals court has said it will not rehear a landmark case looking to overturn the government’s rules on net neutrality, the regulations that forbid Internet providers from blocking or slowing Internet traffic.

Monday’s decision by the U.S. Court of Appeals for the D.C. Circuit allows its previous ruling upholding the regulations to stand — and paves the way for opponents of the rules to appeal to the Supreme Court.

“I'm super excited,” said Daniel Berninger, one of the critics who in 2015 sued the Federal Communications Commission, which wrote the rules. “When we get to the Supreme Court, we want to be saying [to a largely conservative bench] this is a severe case of government overreach.”

If the Supreme Court agrees to take the case, it could hear oral arguments next spring, said Berninger, who intends to file his appeal within 90 days. USTelecom — a trade association supporting Internet providers that also sued the FCC in 2015 — said in a statement that it was reviewing its legal options.

The D.C. Circuit's decision comes days after the FCC's Republican chairman, Ajit Pai, unveiled a separate plan to undo his Democratic predecessor's net neutrality regulations. Pai argued that the rules have discouraged Internet providers from upgrading their networks and that repealing the net neutrality rules would create jobs.

The rules, approved by the FCC during the Obama administration, classified Internet providers as "common carriers" — a move that allowed the agency to regulate those companies more strictly than before. In addition to banning the blocking or slowing of Internet traffic, the regulations also gave the FCC the ability to investigate business practices among Internet providers that it deemed potentially anticompetitive.

Supporters of the regulations argue that they are a vital consumer protection that prevents Internet providers from abusing their strategic position between Internet users and the rest of the Web. Without strong regulations, they say, Internet providers will be free to raise costs for consumers — such as charging customers extra to keep their personal data private, or to be able to view certain websites or use certain apps. Meanwhile, advocates say, ISPs could be allowed to charge website owners extra fees to reach consumers' screens, and determine what apps and services may flourish online.

Defenders of the 2015 rules said Monday's court decision was a victory.

“Today's decision is a win for consumers,” said Lisa Hayes, general counsel at the Center for Democracy and Technology.

But that win may prove temporary as the broadband industry and its allies look toward a Supreme Court fight and the FCC's own bid to rewrite or repeal the rules. In a statement Monday, Pai said he was not surprised to see the D.C. Circuit decline to take up the matter.

“Their opinion is important going forward, however,” he said, “because it makes clear that the FCC has the authority to classify broadband … as [a more lightly regulated] information service, as I have proposed to do.”

Pai is expected to begin soliciting public feedback on his proposal once the FCC meets to vote on it on May 18. That rulemaking process will likely proceed separately but in parallel with Berninger's appeal to the Supreme Court, raising questions as to whether the Court will agree to hear the case.

There, Justice Neil Gorsuch is expected to play a key role as the newest member of the bench. Gorsuch is considered a skeptic of what is known as "Chevron deference," a practice in which courts give so-called "expert agencies" such as the FCC the benefit of the doubt in decision-making. In the case of net neutrality, Gorsuch's negative views on agency deference may encourage him to oppose the FCC's 2015 regulations, according to Paul Gallant, an industry analyst at Cowen & Co., in a research note Monday.

But some legal analysts say that Pai's forthcoming regulatory process to roll back the net neutrality rules will keep the Supreme Court from weighing in. Andrew Schwartzman, a public interest lawyer at Georgetown University, said the Supreme Court will likely take a pass.

“The likelihood that Chairman Pai will seek to abandon the commission's 2015 decision greatly diminishes the already low likelihood that the Supreme Court would want to hear the case,” Schwartzman said.