A federal court of appeals has ruled that the FCC cannot impose rules that prohibit Internet Service Providers (ISPs) from restricting access to legal Internet traffic by blocking or unreasonably discriminated against selected content. The concept has been called “Net Neutrality.” If that sounds complicated, it is.

The concern that prompted the FCC to establish the rules that were overturned is that the companies who control the Internet traffic flow could selectively target content that is competitive or potentially very profitable. For example, Comcast, which is an ISP that also generates content such as movies, could drastically slow down Netflix (movie rentals) content flow or charge much higher rates for that content to gain a competitive advantage. There is also a concern that ISPs could create a 2-tiered pricing system based of broadband speed that would essentially create two Internets: a fast one for those who can afford it and slow one for everyone else. While this has not happened yet, and ISPs say they have no intention of doing so, the FCC proactively prohibited it. The court said the FCC could not do that.

With the complexity of this situation, it is very difficult to predict the impact this will have. Many think the FCC will appeal and this may end up in the U.S. Supreme Court for final resolution. The big question is if the Internet should be treated like telephone lines and radio frequencies – resources for the public good – or like communication services delivered by private companies. There is much more to come. Read more.