The Future of Net Neutrality
March 2, 2026
This past January a federal appeals court in Washington D.C. found that the Federal Communications Commission (FCC) did not have the legal authority to regulate how broadband providers manage data and information traffic over their networks. Proponents of net neutrality, or, as some phrase it, the Open Internet, saw the decision as a defeat for consumers and the beginning of a dramatic change in how broadband providers are able to charge internet companies or internet users for the use of their networks.
Critical to this case is an understanding of the basic workings of the internet. Any time that a Youtube video is accessed three important steps are required. The first is that Youtube breaks up the video into smaller packets of data that are transferred via a network provider to a backbone network, essentially the fiber optic networks that transmit huge amounts of data. This backbone network then sends the data for the Youtube video to the local access provider, such as Verizon or Comcast. Finally these local access providers transfer the data packets to the computer accessing the video, which then appear in the form of a Youtube video. The concept of net neutrality is that local access providers are not allowed to treat data differently based on its size or place of origin. In this way, a broadband company like Comcast has to treat traffic from data-heavy Netflix in the same way that it treats data from a less data intensive website.
The January court case involved Verizon suing the FCC stating that the FCC lacked the authority to regulate how Verizon handles data over its broadband networks. The law in question was the Telecommunications Act of 1996, specifically section 706, which gives the FCC authority to regulate broadband infrastructure. However, the federal appeals court found that the FCC had overstepped its bounds in maintaining regulations on how broadband providers handled web traffic. The primary issue the court ruled against was the FCC using “common carriage” concepts as a justification for its maintenance of net neutrality. Common carriage involves the regulation of industries or services that are fundamental for public use and which draw on public rights of way. As an example, telephone companies hang telephone lines on the sides of public roadways, and are able to do so because they are regulated under laws derived from common carriage and have to provide the opportunity for telephone service to the entire public.
In 2005 the Supreme Court found that broadband providers did not fall under the “common carriage” regulation. The Court found that broadband was not technically a telecommunications service, and so it did not fall into common carriage regulations. This was the primary flaw that the Appeals Court more recently found with the FCC’s Open Internet regulations. The court found that:
“Even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.”
So where does this leave the future of net neutrality? For broadband providers, the ruling seems to pave the way for them to introduce price stratification for the type of data going through their networks. This could be passed on to consumers in different pricing plans for different types of data. Another possibility is that providers begin charging websites fees in order to have their content promoted or stream faster.
However, the FCC has not given up, and in fact has grown optimistic from the court case. The commissioner of the FCC, Tom Wheeler, has stated that the FCC will not challenge the appeals court’s ruling, but will instead rewrite net neutrality rules using a different legal basis that does not draw on the common carriage concept. Rather, the FCC will take the court’s finding that the FCC has the authority to regulate internet openness as a new basis for forthcoming rules involving net neutrality. Essentially, the court found that the FCC is able to issues rules about net neutrality, it just needs to base these rules in legal concepts that are covered in section 706 of the Telecommunications Act, and which don’t rely on the common carriage legal concept. It seems that the battle for control over the internet’s neutrality will continue for quite some time.
Further Reading:
Analysis of court opinion
statements from FCC chairman