WASHINGTON, Oct 16 (Reuters) - A U.S. appeals court on Tuesday upheld a 2005 Federal Communications Commission decision to lift regulations on high-speed Internet services offered by local telephone companies like Verizon Communications (VZ.N).
The U.S. Court of Appeals for the Third Circuit in Philadelphia denied the appeal from smaller competitors, who argued that lifting the regulations allowed major carriers like Verizon to squelch competition by denying them network access.
A three-judge panel said the FCC decision was based on a “reasonable interpretation” of the law.
The FCC voted in 2005 to treat high-speed digital subscriber line (DSL) broadband as an “information service,” which insulated it from many traditional telephone rules like requirements to lease network access to competitors at regulated rates.
The designation allowed big local telephone companies like Verizon to cut off or potentially negotiate new terms for Internet service providers such as EarthLink Inc. ELNK.O to use their networks for broadband.
FCC Chairman Kevin Martin said he welcomed the appeals court’s decision.
Analysts at Stifel Nicolaus said in a research note that the ruling was good news for the telecommunications companies because it “reduces their regulatory overhang and preserves their increasing broadband parity with cable providers.”