Decision in Verizon Communications Inc. v. Federal Communications Commission
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In the United States Supreme Court case Verizon Communications Inc. v. Federal Communications Commission, Verizon Communications argued that it was wrong and unreasonable for the Federal Communications Commission to regulate and set leasing rates for networks. Ultimately, the January 14th decision held that the Federal Communications Commission can indeed set rates charged by the service provider for leased elements that are completely unbound from the provider's investment. Also the Federal Communications Commission can also require service provider's to combine certain elements of their networks at the request of the customer or user. However, in regards to network neutrality, the Federal Communications Commission does not have the authority to enforce any such rules.
This decision stems from the Telecommunications act of 1996 which gives the Federal Communications Commission the ability define standard leasing rates with almost infinite flexibility. However, Verizon successfully argued that the Federal Communications Commission isn't authorized require a state utility commission to set rates by local exchange carriers for lease of network elements to competitive local exchange carriers. Essentially, three main issues were focused on: the pricing rules for unbundled network elements; whether excluding past costs constitutes a governmental taking; and thirdly what are the rules for combining network elements.
Taking a deeper look at the Telecommunications act of 1996 gives us a better understanding of what type of authoritative power the Federal Communications Commission actually has. The Act contains as follows in the context of local exchange carriers:
" The duty to provide, to any requesting telecommunications carrier...
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...y of any future internet regulation.
But, it is also important to note that all of this could have been avoided if the Federal Communications Commission had the foresight to call broadband providers "common carriers." A common carrier easily falls under Title II of the Communications Act. But, under the decision, any Net Neutrality anti-blocking rules are deemed unlawful. So, the Federal Communications Commission does not have the authority to impose or enforce rules that would give the free market favor against the politically and economically powerful network provider.