U.S. FCC draws tough court for Web rule lawsuits

Thu Oct 6, 2011 5:54pm EDT

* Court consolidates challenges to D.C. appeals court

* D.C. circuit seen toughest for FCC

By Jasmin Melvin

WASHINGTON, Oct 6 (Reuters) - Challenges to new U.S. Internet traffic rules will be heard in the federal appeals court in Washington D.C., a court that has previously been skeptical of the Federal Communications Commission's authority.

A judicial panel that manages multidistrict litigation said on Thursday it had randomly selected the U.S. Court of Appeals for the District of Columbia Circuit to hear appeals of the FCC's "Open Internet" order.

The same appeals court ruled last year that the FCC lacked the authority to stop Comcast Corp (CMCSA.O) from blocking bandwidth-hogging applications on its broadband network, spurring the agency's rulemaking.

"The FCC is in for a rough legal battle given the past history of net neutrality in the D.C. circuit," said Medley Global Advisors analyst Jeffrey Silva.

The FCC has repeatedly expressed confidence in the legal foundation backing the rules which are due to take effect Nov. 20. "The FCC stands ready to defend its open Internet order in any court of appeals," an agency spokesman said on Thursday.

Adopted by a divided FCC last December, the Internet rules seek to balance the interests of consumers and content providers with those who sell access to the Web and often supply their own content.

The rules forbid broadband providers from blocking legal content while leaving flexibility for providers to manage their networks.

Backers of net neutrality rules say big providers could otherwise use their gatekeeper role to discriminate against competitors. Internet providers say they need to be able to manage their networks for all users.

Verizon Communications Inc (VZ.N) filed suit last week, asking the D.C. appeals court to have the rules thrown out, saying the FCC was "arbitrary" and "capricious" and acted beyond its statutory authority in imposing the rules. [ID:nS1E78T1P1]

Public interest groups have criticized the rules as too weak, saying the FCC was swayed by big industry players including AT&T Inc (T.N) and Comcast Corp (CMCSA.O).

Free Press filed suit last week in the First Circuit Court of Appeals in Boston, challenging provisions in the order that give wireless broadband providers more discretion in managing their networks. [ID:nS1E78R1KX]

Other suits were also filed in the second, third, fourth and ninth circuits. (Reporting by Jasmin Melvin in Washington D.C.; Editing by Tim Dobbyn)

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