The D.C. Circuit has issued a decision gutting FCC rules that prevented companies like Comcast and VerizonCellTower from blocking access to, or charging extra fees to companies like Amazon, Apple and Netflix that seek to distribute content to customers via the Internet. Local governments should be concerned for three reasons:

  1. Economic development in many communities depends on the ability of new Internet-based companies to provide services to consumers without being forced to pay special fees, as the FCC Order that was overturned recognized.
  2. Local governments also depend on the Internet to distribute information to consumers. The ruling would allow companies that control the pathway to residential users (usually, the local telephone or cable company) to establish carriage conditions that affect not just commercial companies, but also state and local governments. The impact on e-health and other initiatives that depend on high-bandwidth applications could be significant.
  3. Companies are now asking the FCC and state governments to allow them to abandon the existing wireline, common carrier network and to allow them to move to IP-based networks. If that transition is authorized without adequate and enforceable protections, companies that control basic communications infrastructure would have authority to broadly control what content may move over those networks (and the charges for connecting to the network to provide information that can be accessed by end users).

The order provides a very good reason for local governments to move quickly to become involved in just-beginning efforts by Congress to rewrite the nation’s communications laws – and to urge the FCC to consider alternatives that protect the new information economy.

The U.S. isn’t the only nation facing the “net neutrality” challenge. For a European perspective, read this Network World article.