Verizon could soon regret its Net neutrality lawsuit

When faced with possible 'hybrid' approach to Net neutrality, Verizon looks back with fondness on the rules its own lawsuit overturned

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It looks very much like Verizon blinked in the game of chicken over Net neutrality. Amid rumors that FCC head Tom Wheeler is leaning toward a "hybrid" approach to regulation, Verizon this week pled the case for the FCC sticking to Net neutrality rules based on Section 706 of the Telecommunications Act -- the same act Verizon sued the agency for using in 2011.

In the lawsuit that overturned the FCC's 2010 Open Internet Order, Verizon argued that the agency didn't have authority under Section 706 to regulate for Net neutrality. While it may have seemed like a victory when a federal appeals court in January struck down the restrictions on discriminating against content over fixed broadband connections, that win could end up backfiring on the telecom industry.

After the ruling, plans initially seemed to go according to Verizon's plan. The FCC rolled over and offered weaker rules, including a controversial pay-for-priority proposal that gave the agency's blessing to ISPs charging for fast lanes.

In the face of overwhelmingly negative public reaction, recent comments from the FCC suggest the agency is now considering a hybrid approach to Net neutrality, which would allow fast-lane deals but reclassify content-provider traffic as a Title II service subject to regulation to block arrangements deemed harmful to consumers.

In a blog post this week, Verizon warns that such a plan "fairly guarantees litigation" and advises the agency against "departing from the safe harbor of Section 706." The bottom line, Verizon says, "is that effective Net neutrality rules -- without further judicial intervention -- are within reach, if the FCC takes the Section 706 route it originally proposed."

Faced with the possibility of parts of the Internet being reclassified as Title II service and with the FCC now considering rules on both fixed and wireless networks, fellow ISPs are "secretly furious" with Verizon, and grumble that they "wouldn't be in this mess if Verizon had just accepted the old rules," according to National Journal.

"They were like a dog chasing a bus," one broadband source said. "What are you going to do when you catch the bus?"

Of course, any attempts to regulate the Internet will be met with hostility by the new Republican majority on Capitol Hill. InfoWorld's Bill Snyder writes that "even if Wheeler suddenly gets religion and reclassifies ISPs as common carriers that can be regulated by the FCC, Congress will almost certainly attempt to kill it."

But it's unlikely Congress will be able to enact legislation prohibiting Net neutrality rules. Andrew Lipman, a partner at law firm Bingham McCutchen and an expert on telecommunications, told Investor's Business Daily that although a Republican-controlled Congress might pass measures to restrict the FCC on network neutrality and attempt to rewrite the 1996 Telecom Act, both would be vetoed by a Democratic administration. Republicans will also face a tough fight to retain control of the Senate in 2016, when they will have 24 seats up for reelection compared to 10 for the Democrats.

One thing's for sure: Whichever version of Net neutrality rules the FCC approves, they will satisfy no one.  Yesterday, protesters demanded a ban on "fast lanes," and Craig Aaron, president of consumer advocacy group Free Press, likened the hybrid approach to Frankenstein's monster. On the other end of the spectrum, political website The Hill referred to the FCC's plan as "another step in the regulation of speech" and ISPs readied their plethora of lawyers.

Sounds like polarized politics as usual.