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Verizon, FCC battle in court over net neutrality, site blocking

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WASHINGTON — Judges hearing an appeal by Verizon Communications of the U.S. government's open internet rules spent much of their time on Monday focused on what sorts of charges levied on websites would be considered illegal blocking.

The 2011 rules required Internet providers to treat all traffic equally and to give consumers equal access to all lawful content, even where that content might compete with aspects of the Internet provider's business.

Verizon is challenging the Federal Communications Commission regulations as an excessive, "arbitrary and capricious" intrusion which violates the company's right to free speech, stripping it of control over what its networks transmit and how.

"It is just not credible that Congress would have authorized these kinds of rules. We think that they (FCC) lack statutory authority," attorney Helgi Walker, who argued for Verizon, told a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit.

But the judges quickly cut Walker off to ask about possible charges on Internet sites.

Judge Laurence Silberman repeatedly asked during the two-hour hearing if companies that provide Internet service to consumers could charge websites for access to those consumers. And, he asked, if the websites refused to pay and the Internet provider refused to carry the website, was that blocking?

"How else can you enforce this payment?" he asked.

Judge David Tatel said he reads an aspect of the rules as saying "that you can't charge to (avoid blocking) but you can charge."

FCC General Counsel Sean Lev told the court: "No one is being told that they cannot charge."

But, he said, the FCC would have "concerns" if, for example, Google or another major website were to pay $200,000 to ensure its users got faster access.

Silberman also raised Verizon's argument that it had a First Amendment right to decide what websites its users had access to, using as an example access to a site with instructions on making chemical weapons. Lev responded: "Verizon is not speaking in that instance. Verizon has said over and over again that it is a conduit for others' speech."

Tatel asked Verizon's Walker if the court struck down the nondiscrimination clause, would that mean that they could then charge websites for higher speed or other priority access.

"If all that was left standing is a no blocking (inaudible), then I don't think we'd be here today," she said.

Tatel authored the 2010 court opinion that struck down the FCC's earlier attempt to pursue a net neutrality case against Comcast Corp. (NBC News is part of NBCUniversal, which is owned by Comcast, a provider of cable TV and broadband Internet access.) The court said the agency lacked the authority to stop Comcast from blocking bandwidth-hogging applications.

The court did not indicate on Monday when it would issue a ruling in the Verizon challenge.

Public interest groups have termed the FCC rules too weak, saying the agency was swayed by big industry players and needs to forge more direct and clearer power of oversight.

MetroPCS, another wireless provider that stood alongside Verizon in the case, dropped its lawsuit earlier this year after being acquired by Deutsche Telecom AG's T-Mobile USA.

The FCC's position in the Verizon case received a boost from the Supreme Court in May, when in a separate case it ruled in favor of giving regulatory agencies deference in interpreting the extent of their own regulatory authority.

The case is Verizon v. FCC, U.S. Court of Appeals for the District of Columbia Circuit, case No. 11-1355 (and consolidated cases).