NPR is reporting that the case, which has primarily come under fire from US broadband provider Comcast, is a major setback for the FCC. The FCC has been attempting to enforce the regulation which would assure equal bandwidth for all traffic.
Comcast has pushed back with all of its might, since an earlier ruling where the company was forced to provide equal bandwidth to torrent traffic, after it had throttled the use. The Net Neutrality argument, however, spans much further back in Internet history.
In 2005, the FCC headed by Republican Kevin Martin, had ordered the first set of neutrality rules in an effort to keep US broadband providers from acting as “online gatekeepers”. This is the first major ruling on Net Neutrality among all US ISP’s.
Net Neutrality, in case you’re not familiar, is a set of ideas that would enforce equal bandwidth for all traffic as long as that traffic is legal. Without enforced neutrality, ISP’s would be able to throttle certain services (Vonage, for example) while allowing full bandwidth to others (such as Comcast’s own VoIP service).
The appeals court is stating that the FCC, in its enforcement of that neutrality, would overstep its bounds. The argument from ISP’s has long been that the FCC should not be allowed involvement into an ISP’s network management.
With this slap to the FCC, however, we are likely to see many more regulations put into place on specific ISP’s instead of across the board measures.
Update: A PDF of the court’s ruling