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Image by Leonardo Rizzi on Flickr
Image by Leonardo Rizzi on Flickr

Net neutrality rules created by the Federal Communications Commission were struck down today in a ruling by the United States Court of Appeals for the District of Columbia. In an 81-page ruling, the court held that the FCC had overstepped its bounds in imposing net neutrality rules on Internet providers, but it seems like the Commission shot itself in the foot by trying to have it both ways in its rule making.

The rules in the commission’s Open Internet Order, first adopted in 2010, said that broadband providers couldn’t restrict access to the web based on what content people were looking at–in essence, they had to remain neutral when it comes to providing access to different websites.

But now that the order has been struck down, it’s open season for broadband providers like Comcast and Verizon to start striking deals with content companies to provide priority access to certain websites, or throttle access to other kinds of content, like P2P file sharing. The risk with that scheme is that it could leave website operators in the lurch, if they’re unable to pay broadband providers to give consumers faster access to their online properties.

The Court ruled that while the commission tried to impose restrictions on the Internet providers that would regulate them like common carriers–a class of telecommunications provider that has to provide equal access to its network–while also saying that they were not covered by Title II of the Communications Act of 1934, which lays out regulations for common carriers.

Or, to put it in legalese, here’s the key passage from the court’s ruling:

That said, even though the Commission has general authority to regulate in this arena, it may not impose requirements that contravene express statutory mandates. Given that the Commission has chosen to classify broadband providers in a manner that exempts them from treatment as common carriers, the Communications Act expressly prohibits the Commission from nonetheless regulating them as such. Because the Commission has failed to establish that the anti-discrimination and anti-blocking rules do not impose per se common carrier obligations, we vacate those portions of the Open Internet Order.

The court left intact the portions of the FCC’s order that require providers to be transparent to their users about how they treat traffic. That way, even if Comcast ends up prioritizing Netflix’s video streaming over YouTube’s video streaming, it has to tell its customers.

Net Neutrality isn’t over and done with, though. The ruling gave the FCC some room to impose new rules, so long as it does so in a consistent manner.

FCC Chairman Tom Wheeler issued this statement following the ruling:

“The D.C. Circuit has correctly held that ‘Section 706 . . . vests [the Commission] with affirmative authority to enact measures encouraging the deployment of broadband infrastructure’ and therefore may ‘promulgate rules governing broadband providers’ treatment of Internet traffic.’ I am committed to maintaining our networks as engines for economic growth, test beds for innovative services and products, and channels for all forms of speech protected by the First Amendment. We will consider all available options, including those for appeal, to ensure that these networks on which the Internet depends continue to provide a free and open platform for innovation and expression, and operate in the interest of all Americans.”

Verizon, which sued the FCC, said that the decision will be a positive step for consumers in a statement emailed to GeekWire.

“One thing is for sure: Today’s decision will not change consumers’ ability to access and use the Internet as they do now. The court’s decision will allow more room for innovation, and consumers will have more choices to determine for themselves how they access and experience the Internet. Verizon has been and remains committed to the open Internet which provides consumers with competitive choices and unblocked access to lawful websites and content when, where, and how they want. This will not change in light of the court’s decision.

“We look forward to working with the FCC and Congress to keep the Internet a hub of innovation without the need for unnecessary new regulations that seek to manage the explosive dynamism of the Internet.”

At this point, it seems like the FCC has two choices if it wants to keep up the fight for net neutrality: either appeal the court’s ruling to the Supreme Court, or change the rules.

Read the full ruling below:

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