Verizon Challenges FCC's Net Neutrality Rules

WASHINGTON – Verizon Communications Inc. on Thursday filed a legal challenge to new federal regulations that prohibit broadband providers from interfering with Internet traffic flowing over their networks.

In a filing in federal appeals court in the District of Columbia, Verizon argues that the Federal Communications Commission overstepped its authority in adopting the new "network neutrality" rules last month.

The rules prohibit phone and cable companies from favoring or discriminating against Internet content and services — including online calling services such as Skype and Internet video services such as Netflix, which in many cases compete with services sold by companies like Verizon.

The FCC's three Democrats adopted the rules over the opposition of the agency's two Republicans just before Christmas. Republicans in Congress, who now control the House, have vowed to try to block them from taking effect. They argue that the rules amount to unnecessary regulation that will discourage the phone and cable companies from investing in their networks.

Several key House Republicans, including House Commerce Committee Chairman Fred Upton of Michigan, welcomed Verizon's actions Thursday as "a check on an FCC that is acting beyond the authority granted to it by Congress." The court challenge had been widely expected.

Verizon is taking the case to the same federal court that ruled last year that the FCC had exceeded its legal authority in sanctioning cable giant Comcast Corp. for discriminating against online file-sharing traffic on its network — violating broad net neutrality principles first established by the agency in 2005. Those principles served as a foundation for the formal rules adopted by the commission last month.

Last year's court ruling forced the FCC to look for a new framework for regulating broadband to ensure the commission would be on solid legal ground in adopting net neutrality and other rules. The agency currently treats broadband as a lightly regulated "information service," as opposed to phone service, which has more regulation.

At one point, FCC Chairman Julius Genachowski proposed redefining broadband as a telecommunications service subject to "common carrier" obligations to treat all traffic equally. But he later backed down in the face of fierce opposition from the phone and cable companies, as well as many Congressional Republicans.

New York-based Verizon is the country's fourth-largest fixed-line Internet service provider, with 8.3 million subscribers. It's investing more in home broadband than any other company, since it's upgrading about two-thirds of its local-phone network with optical fiber for ultra-fast Internet access.