CTIA shrugs off court ruling that lets FCC's net neutrality rules take effect; Sprint and T-Mobile say they will comply

CTIA shrugged off a federal appeals court decision that will let the FCC's net neutrality rules go into effect today and said it was confident that the FCC had overstepped its bounds in issuing the regulations. While Verizon Wireless (NYSE: VZ) and AT&T (NYSE: T) toed the line set by CTIA and other telecommunications trade groups, Sprint (NYSE: S) and T-Mobile US (NYSE:TMUS) said they were fine complying with the net neutrality rules.

The U.S. Court of Appeals for the District of Columbia Circuit denied a petition to block the implementation of the rules while court fights over their merits continue. The court said the U.S. Telecom Association hadn't "satisfied the stringent requirements for a stay pending court review," which included proving irreparable harm if the rules went into effect.

However, the appeals court granted a request for expedited consideration of the underlying case, which both sides had requested. The denying of the stay on the rules is not an indication of how the court may ultimately rule.

CTIA, along with AT&T, USTelecom and the National Cable & Telecommunications Association, have filed lawsuits seeking to overturn the rules. The groups and companies specifically object to the FCC's decision to reclassify broadband as a telecommunications service under Title II of the Telecommunications Act, and argue that they are "arbitrary and capricious" and violate federal law.

FCC officials, including Chairman Tom Wheeler, have said they are confident in their legal case and that the agency will prevail in court; the D.C. circuit appeals court has shot down the FCC's net neutrality rules twice before.

"This is a huge victory for Internet consumers and innovators!" Wheeler said in a statement yesterday. "Starting Friday, there will be a referee on the field to keep the Internet fast, fair and open. Blocking, throttling, pay-for-priority fast lanes and other efforts to come between consumers and the Internet are now things of the past. The rules also give broadband providers the certainty and economic incentive to build fast and competitive broadband networks."

In addition to bans on blocking content, throttling content and paid prioritization, the regulations also include a "no-unreasonable interference/disadvantage standard." The standard is designed to protect the ability of consumers and content providers to use the Internet and connect to each other without being unreasonably interfered with or disadvantaged. This is the standard the FCC will use to judge whether future practices of broadband providers, such as zero-rating or sponsored data plans, should be allowed.

Wireless carriers will not have to go the agency and ask permission every time they want to introduce a new offering or mobile broadband plan, but they can go to the FCC to get an "advisory opinion" on whether a new proposed mobile data business plan meets the standard, and customers can file complaints.

CTIA President Meredith Attwell Baker said in a statement that the court's decision was "good news, demonstrating the seriousness of the FCC's complete and sudden reversal of decades of bipartisan policy."

"While the stay decision is disappointing and a loss for consumers, securing a judicial stay is always a challenge given the extremely high standards," she said. "The case is just beginning and the stakes are high -- the U.S. is the world's leader in the deployment and adoption of wireless broadband, due in large measure to decades of light-touch regulation. The wireless industry seeks to restore that approach so consumers can benefit from competition and innovation, rather than suffer the harmful consequences of the FCC's overreach that would imperil new services and inhibit investment. As we said from day one, CTIA and its member companies support an open Internet. We look forward to presenting our full case to the court."

Verizon and AT&T referred to CTIA's statement. The Competitive Carriers Association declined to comment.

Sprint, however, struck a hopeful tone and said it will be complying with the new rules. "Sprint has always supported an open Internet for its customers and believes that competition provides the best protection to consumers," Sprint said in a statement. "Accordingly, very few changes were necessary for Sprint to come into compliance with the new rules. Sprint plans to continue investing in its network and competing vigorously regardless of the FCC's new rules."

T-Mobile also said it will comply with the rules. "We love anything that puts consumers first. Supporting a free and open Internet is no exception," the carrier said in a statement. "We're compliant with the new Open Internet rules and will continue to innovate U.S. wireless in true Un-carrier fashion." 

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this Washington Post article

Related articles:
House Republicans try to take down net neutrality by gutting FCC in fiscal budget
CTIA seeks to block FCC's net neutrality rules from taking effect amid court challenges
Wheeler: No, we didn't get 'secret instructions' from White House for Title II regs
FCC publishes net neutrality rules, takes hard line on network management practices
During MWC keynote, FCC's Wheeler defends net neutrality rules
Net neutrality rules won't force carriers to get FCC permission for new plans, officials say

Article updated June 12, at 4 p.m. ET, with a statement from T-Mobile

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