Pay-TV industry reacts as court upholds FCC's net neutrality rules

A D.C. Circuit Court of Appeals today voted to uphold the sweeping net neutrality rules proposed by the FCC. The decision drew quick response from the pay-TV industry.

The NCTA was one of the first to voice its disappointment with the decision.

"We are reviewing today's split decision by the DC circuit panel, and will carefully review the majority and dissenting opinions before determining next steps. Though disappointed in today's result, we are particularly gratified by Judge Williams' recognition of the 'watery thin and self-contradictory' nature of the FCC arguments used to justify the imposition of common carriage laws on Internet networks. While this is unlikely the last step in this decade-long debate over Internet regulation, we urge bi-partisan leaders in Congress to renew their efforts to craft meaningful legislation that can end ongoing uncertainty, promote network investment, and protect consumers."

ACA President and CEO Matthew Polka was similarly discouraged by the ruling and expressed concern over the potential impact to smaller cable providers.

"ACA members -- which are among the smallest actors in the market -- do not now have and never had the incentive or ability to engage in blocking, throttling, or paid prioritization that could possibly threaten the openness of the internet. Nonetheless, ACA members were and are willing to be subject to the three 'bright line' net neutrality rules contained in the order under the FCC's Section 706 authority. However, ACA members have been strongly opposed to being subject to onerous Title II rules to achieve this goal, which would impose unnecessary and significant costs," said Polka in a statement. "ACA believes that for the FCC to exercise regulatory authority over the Internet, it requires a clear statutory mandate from Congress that is lacking in this case."

AT&T seemed hardly surprised by the decision and looked forward to the next phase of challenges. 

"We have always expected this issue to be decided by the Supreme Court, and we look forward to participating in that appeal," said David McAtee, AT&T senior executive VP and general counsel, in a statement.

Charter, Comcast and Cox Communications have yet to respond to FierceCable's requests for comment. But when the rules originally passed an FCC vote last year, both Charter CEO Tom Rutledge and Comcast CEO Brian Roberts didn't appear to be unduly concerned about proposal designed to protect internet traffic from throttled and preferential treatment.

Rutledge said that, as is, the Title II regulation wouldn't change anything. Roberts said that while he felt Title II wasn't the right answer, Comcast would adjust accordingly to any new rules governing ISPs.

Although net neutrality's court approval rings as a blow to broadband providers, not everyone working within the pay-TV industry was disappointed by today's ruling.

Pantelis Michalopoulos, a partner at law firm Steptoe & Johnson which serves as the lawyer for companies including Netflix, Dish Network and Comptel, described today's ruling as a third time's the charm situation.

"Often in Washington, it is tough to discern who won or lost. That was the case with the Verizon case in 2014: the court said the FCC had the authority to make open Internet rules, but had to go back to the drawing board. This time there is no doubt who is the winner: the open internet," Michalopoulos said in a statement. "The gatekeepers may not block or throttle our information. They may not ask information to pay tolls. They may do nothing that unreasonably disadvantages users or content providers. And our iPhone is as safe as our PC:  wireless Internet access providers are subject to the rules too."

Meanwhile FCC Chairman Tom Wheeler celebrated the decision as a win for consumers.

"Today's ruling is 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. After a decade of debate and legal battles, today's ruling affirms the Commission's ability to enforce the strongest possible internet protections – both on fixed and mobile networks – that will ensure the internet remains open, now and in the future," said Wheeler in a statement.

For more:
- read this court document
- read this Politico story

Related articles:
Comcast, Cablevision, Charter execs have mixed reactions to net neutrality vote
Comcast, TWC and Charter downgraded to neutral on analyst concerns over Title II, cord cutting
Charter's Rutledge: Title II a 'heavy handed regulatory solution for problem that doesn't exist'