Network neutrality is an FCC policy, under challenge by major ISPs, that addresses a fictional problem with rules that create real ones. To institute it, the FCC played fast and loose with the law, and the courts will likely strike down the rules.
To pursue an ideological solution in search of a problem, the Commission and allies have, for many years, propagated the fear that large, corporate (i.e. "evil") ISPs would attempt to leverage their market power to balkanize the Internet so that there would be a high-quality, uptown Internet for the rich and a shoddy, slow downtown one for the proletarian masses.
In the meantime, access and subscription to broadband in the US has been growing rapidly. The recent Pew Home Broadband 2013 survey found that 70% of American adults ages 18 and older have a high-speed broadband connection at home. Given that the Census Bureau found in 2011 that 98% of US households have access to broadband, it would seem that private industry has done a great job of building out the networks. In many areas there are more than one option. (I live in New Jersey, and most of the state has more than one broadband provider available.)
How about the performance of those networks? The FCC's own "Report on Consumer Wireline Broadband Performance in the U.S." from February of 2013 says that ISPs in the U.S. are doing a good job of providing their customers with advertised Web speeds, and the average tier selected by Americans is 15.6 Mbps, up from 14.3 Mbps last year. And that doesn't even count mobile service, which is also getting faster, cheaper and more available. It's hard to make the case that the broadband industry is not getting fast Internet bandwidth to the American public.
But the lack of a real world problem with the market aside, the real problem for network neutrality advocates was that the FCC had no authority to regulate broadband ISPs. So Democrats in the FCC and some outside groups have been seeking a way to give the Commission regulatory jurisdiction over ISPs in order to do something about this "problem."
The Communications Act of 1934 (including many amendments over the years), which governs the FCC's conduct, was written at a time when communications services were neatly divided into distinct categories: wireline telephony (Title II of the act); services provided over the radio spectrum like broadcast TV, radio and wireless telephony (Title III of the act); and or "cable services" like cable television (Title VI).
Here in the 21st century these distinctions are collapsing. Broadband Internet service doesn't clearly fit into any of the categories of service under the Act. The FCC's solution was to reclassify "broadband services" as "telecommunications services," which in theory would allow it to exercise direct jurisdiction under Title II. After Congress blew up at the FCC over this, the Commission cited a collection of other statutes which they claimed gave them jurisdiction. Then they issued the Open Internet Rules.
The court case will revolve around the jurisdictional issues; court precedents, as I understand them, lean heavily against the FCC. But are the rules themselves reasonable? Here are the 3 rules as written by the FCC:
Transparency. Broadband providers must disclose information regarding their network management practices, performance, and the commercial terms of their broadband services.
No blocking. Fixed broadband providers (such as DSL, cable modem, or fixed wireless providers) may not block lawful content, applications, services, or non-harmful devices. Mobile broadband providers may not block lawful websites, or applications that compete with their voice or video telephony services.
No unreasonable discrimination. Fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Unreasonable discrimination of network traffic could take the form of particular services or websites appearing slower or degraded in quality.
The first 2, depending on how they are interpreted, are relatively unobjectionable. They're the sorts of things that customers would demand, and there aren't many incidents on the record (to my knowledge) to show that ISPs have been opaque or have unreasonably blocked lawful content, applications, services or non-harmful devices. So they are a solution in search of a problem.
It's rule 3, about discrimination, where net neutrality gets nutty. The scenario envisioned by the rule is one where ISPs slow down traffic to particular sites for whatever reason. The number of cases where this has happened in the real world is really, really small, and arguably there has been only one. This sort of thing just doesn't happen.
But if the FCC were the least bit expansive in their interpretation of the rule, it might be more of a problem. The fact is that major ISPs have been engaging in "discrimination" for a long time, and it's made the Internet much better. It's called CDN or Content Delivery Network. The most famous company in this business is Akamai, but others, like parts of VeriSign now owned by Symantec, are in it too.
A CDN places their own hardware and WAN connections directly inside ISP points of presence, giving the CDN's customers close access to end users. CDN marketing would call this improved service for their customers, but another person could call it degraded service for sites not in the CDN.
I know the word "unreasonable" is in there, but it's not defined and it's not at all clear what it means. And on top of all that, what's the point? The fact that amazon.com and microsoft.com and other big budget sites pay for and get faster connections to end users doesn't mean that other sites, which go through their ISP's normal routing and peer connections to the end user's ISP and then to the end user, are "degraded."
Verizon v. FCC may not get into any of these arguments on the merits of the rules. It could be that the court will find for the plaintiffs simply because the redefinition of broadband as telecom is arbitrary and capricious, as it indeed is. If the court goes to the merits of the rules, don't expect it to go well for the FCC.