FCC net neutrality rules hit with new telecom lawsuits

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The FCC’s net neutrality rules came under a new legal assault Tuesday, as AT&T and the major wireless and cable industry groups sued to overturn the order.

AT&T and its trade group CTIA — The Wireless Association, which also represents Verizon, Sprint and T-Mobile, filed lawsuits in the D.C. Circuit Court of Appeals, as did the National Cable & Telecommunications Association, whose members include Comcast, Time Warner Cable and Cablevision. The American Cable Association, which represents smaller cable operators, went to the same court.

The legal challenges, which were widely anticipated, reflect a new phase in the net neutrality debate, with the telecom industry seeking to derail the FCC effort in court. The agency’s Democratic majority voted Feb. 26 to regulate broadband service like a public utility to ensure equal treatment of Web traffic — a move the industry views as heavy-handed regulation that will harm innovation.

“The FCC went far beyond the public’s call for sound net neutrality rules,” NCTA President Michael Powell said in a statement. “Instead, it took the opportunity to engineer for itself a central role in regulating and directing the evolution of the Internet.”

CTIA chief Meredith Attwell Baker warned “these rules will only chill investment and innovation and increase costs for consumers” and said the agency “opted to resuscitate a command-and-control regulatory regime.”

AT&T declined to comment.

Asked about the mounting lawsuits, the FCC said it expects the rules to survive.

“As Chairman [Tom] Wheeler has said, we are confident the FCC’s new Open Internet rules will be upheld by the courts, ensuring enforceable protections for consumers and innovators online,” agency spokeswoman Kim Hart said in a statement.

AT&T and the trade groups join USTelecom and a tiny Texas company called Alamo Broadband, which have filed their own complaints against the FCC. The new wave of litigants apparently waited until the net neutrality order was published in the Federal Register before taking action, believing that procedural step provides more solid legal footing.

The industry has a history of successfully thwarting the FCC’s efforts on net neutrality. A Verizon lawsuit overturned key parts of the agency’s 2010 Open Internet order, sending the commission back to the drawing board.

In a sign of the stakes involved, NCTA announced Tuesday that it has hired former U.S. Solicitor General Theodore Olson and Miguel Estrada, a former assistant to the solicitor general, to argue their case.

“The FCC, in effect, has impermissibly rewritten the Communications Act,” said Olson. “Congress clearly intended for the Internet to evolve unencumbered by complex, inefficient government regulations.”

AT&T and all the trade groups that filed legal challenges this week did so in the D.C. appeals court that derailed the FCC’s previous set of 2010 net neutrality rules. Alamo filed in federal court in New Orleans.

So far, AT&T is the only major telecom company to wade directly into the fight, with the others letting their trade groups go to court. The company has long warned of litigation on net neutrality and even previewed its legal arguments before the FCC vote in February.

Jim Cicconi, AT&T’s senior executive vice president for external and legislative affairs, said last month the order “begins a period of uncertainty that will damage broadband investment in the United States,” adding, “We are confident the issue will be resolved by bipartisan action by Congress or a future FCC, or by the courts.”

At the same time it’s suing over the Internet rules, AT&T is seeking approval from the FCC and Justice Department for its $48.5 billion deal for DirecTV. Comcast is also seeking a regulatory nod for its $45 billion bid for Time Warner Cable.

Public interest groups that support the FCC’s net neutrality order slammed the slew of new lawsuits.

“While Internet service providers will spend buckets of money to woo Congress and file lawsuits, people everywhere will continue fighting for the open Internet protections they won,” said Matt Wood, policy director for Free Press.

Wheeler has said he expects litigation from the telecom industry, warning last fall “the big dogs are going to sue, regardless of what comes out.” He’s been out defending his net neutrality plan as the best way to protect an open Internet and recently concluded an unprecedented congressional grilling, testifying before five different committees in less than two weeks.

After initially exploring a lighter-touch set of Internet rules, Wheeler ended up embracing tougher, utility-style regulation of broadband in line with President Barack Obama’s vision. Republicans in Congress have accused Wheeler, a Democrat and Obama nominee, of caving to White House pressure, but the chairman says he arrived at his own conclusions, independent of the president’s views.

The new legal challenges are likely to shine a spotlight on the incestuous nature of telecom policy in Washington. NCTA’s Powell is a former FCC chairman, and CTIA’s Baker is a former FCC commissioner. Wheeler headed both groups during his earlier career as a telecom lobbyist.