Verizon v. Federal Communications Commission

The Federal Communications Commission (FCC) (defendant) established the Open Internet Order. At the time, the Internet could be divided into roughly four categories of participants: (1) backbone networks that provided the physical cable network, (2) service providers that connected the physical network to users, (3) edge users that provided content and applications over the Internet, like Google and YouTube, and (4) end users who viewed the content. The Open Internet Order was intended to establish net neutrality or Internet openness by preventing various forms of user and content discrimination. Specifically, the Open Internet Order said Internet service providers: (1) must provide transparency by disclosing certain network-management practices and terms for their broadband services, (2) may not block lawful content, and (3) may not unreasonably discriminate in transmitting lawful network traffic. Verizon (plaintiff) sued, arguing the Open Internet Order exceeded the FCC’s authority. Section 706 of the Telecommunications Act of 1996 granted the FCC the authority to enact regulations related to broadband-infrastructure development. The FCC argued that the Open Internet Order rules were authorized under § 706 because they would accelerate the development of broadband service by promoting competition. Verizon disagreed that the regulations would help develop broadband, claiming that any benefits to users would be outweighed by the harm of limiting incentives for the service providers. In addition, Verizon claimed that the Open Internet Order unlawfully treated Internet providers as common carriers.