AT&T Will Take Net Neutrality Issue To The Supreme Court

Barclays’ Amir Rozwadowski mentioned “the D.C. Circuit Court upheld the FCC's Net Neutrality order in its entirety following a 2-1 vote in favor of the ruling. The court's decision brings a victory to the FCC affirming the rules the agency passed in early 2015.”

Following this, several internet service providers were quick to respond, with some companies saying that they intended to appeal the decision in the Supreme Court.

Net Neutrality

Rozwadowski believes that in the absence of an intervention from the Congress, the path to overturning the ruling would be a difficult one, given the current composition of the Supreme Court.

“In our view, the three takeaways that have the broadest long-term relevance for investors: 1) order reclassifies broadband as a telecommunication service under Title II; 2) the FCC's ability to regulate interconnection agreements under Title II; and 3) its ability to reclassify wireless as "commercial mobile service" and thereby subject it to regulation,” the analyst stated.

Among Barclays’ coverage universe, AT&T Inc. T was the most vocal regarding the ruling, stating its intention to take the matter to the Supreme Court.

In addition, Centurylink Inc CTL expressed its disapproval of the ruling.

What Next?

Companies and broader industry groups can request for a rehearing, due for July 29. If they are unsuccessful, they are expected to request for an intervention by the Supreme Court, around mid-September.

Rozwadowski believes that “longer-term strategic paths that would have been available to the industry otherwise could be called into question based on this ruling.”

Therefore, despite the lack of near term impact from this ruling, the analyst believes that the outcome might be “a perennial headwind for the sector as a whole.”