The 6th U.S. Circuit Court of Appeals has dealt a near-fatal blow to net neutrality rules, overturning the FCC’s latest attempt to ensure an open internet.

Net neutrality ensures that companies cannot favor or prioritize certain internet traffic, or charge some companies more, based on the the type of traffic they generate. Net neutrality also ensures that companies cannot charge competing services, or deprioritize their traffic. For example, before selling its stake in DirecTV, AT&T could have prioritized traffic to DirecTV and its Sling TV streaming service, and simultaneously deprioritize traffic to Hulu, Netflex, YouTube TV, and other competing services.

Net neutrality was originally passed under the Obama administration, repealed during the Trump administration, and reinstated during the Biden administration. The latest rules were challenged in court and, unfortunately, the court has struck down net neutrality and essentially dealt it a death blow.

Unsurprisingly, as Reuters points out, industry group USTelecom, which includes AT&T, Verizon, and others, lauded the decision as a victory for American consumers that will lead to more investment, innovation, and competition in the dynamic digital marketplace.”

Cable industry group NCTA was similarly opposed to net neutrality, with President and CEO Michael Powell promising “years of litigation and uncertainty.”

Alphabet, Amazon, Apple, Meta, Mozilla, Wikimedia, Dropbox, and many others strongly disagree, with the companies being staunch supporters of net neutrality. In a letter supporting net neutrality in 2021, Mozilla, Wikimedia, Droipbox, Reddit, ADT, and Eventbrite said the following:

Net neutrality simply preserves the environment that has allowed the internet to become an engine for economic growth. The rules serve as protections that users have in their relationship with internet service providers, preventing ISPs from blocking, throttling, or prioritizing traffic for payment. And in an environment where users frequently lack meaningful choices between ISPs, net neutrality can ultimately encourage greater long-term investment across the network stack by promoting broadband buildout, faster service, and new applications.

The court based its decision on the Supreme Court’s ruling in June that significantly reigned in the authority of federal agencies to interpret and apply established law in creating and enforcing rules. The ruling overturned the “Chevron deference” from 1984 that had granted agencies the authority they have since used.

What Happens Next

The goal of net neutrality was to promote a fair internet, one in which all companies are able to compete freely, on the merit of their offerings. The rules were seen as especially beneficial to startups, as well as companies that make services that compete with ISPs.

Fortunately, while the court’s decision strikes down a national net neutrality rule, it does not impact the various laws that have been passed by individual states, such as California. The DOJ, under the first Trump administration, launched a legal challenge to California’s net neutrality laws, arguing that the federal standard should supersede any one state. Ultimately, the DOJ dropped its case.

Despite the blow to net neutrality on the federal level, the fact that multiple states have implemented their own rules could be enough to still have a significant impact. For example, AT&T was favoring its own HBO Max service, ensuring HBO Max did not count against AT&T wireless users’ data limits. Once California passed its rules, however, AT&T stopped favoring Max, since it was no longer practical to complay with net neutrality on a state-by-state basis.

“A state-by-state approach to ‘net neutrality’ is unworkable,” AT&T said in a statement at the time. “A patchwork of state regulations, many of them overly restrictive, creates roadblocks to creative and pro-consumer solutions.”

Similarly, there is still the opportunity for Congress to pass net neutrality legislation, making it the law of the land. Traditionally, Republican-led governments have been very anti-regulation, and net neutrality is no exception. However, there is a growing distrust of Big Tech, as well as telecoms, including within the Republican party. As a result, while still highly unlikely, it’s not entirely outside the realm of possibility for a Republican-led government to pass such legislation.

Until that happens, however, individuals states appear to be the last, best hope for ensuring a free and open internet.