NEW YORK ( TheStreet) -- Verizon (VZ - Get Report) and the Federal Communications Commission are poised to re-open a debate on net neutrality, or the ability for Internet service providers to prefer some users over others, in a court battle that could have big implications for media industry upstarts like Netflix (NFLX - Get Report), Google (GOOG), Amazon (AMZN) and Pandora (P - Get Report).
Net neutrality is considered by freedom of speech advocates to be the lynchpin of fair Internet access in the U.S., allowing for equal treatment among Web sites irrespective of their size or the services they offer. Charging for broadband data usage could give rise to a media industry where only the richest content providers have the ability to make their voices heard, some freedom of speech advocates argue.
While Verizon's court battle with the FCC does have clear freedom of speech implications, in the near-term the biggest issues of the case are likely to be economic. Cable and telecom giants such as Verizon believe they should have a say on how to charge for data after spending billions of dollars to build out high speed nationwide Internet service.
Verizon is challenging a 2010 Open Internet Order ruling by the FCC, which said that Internet service providers could not block or discriminate against Web traffic, ultimately giving all sites equal access to the Internet. For high users of Internet data such as Netflix, Amazon and traditional broadcast and cable channels, the decision has allowed them to build out streaming video services and dominate Web data usage on most nights.An overruling of the FCC's Open Internet Order could pave the way for ISPs such as Verizon and AT&T (T) to charge high users of broadband data, in a move that could pose a threat to the fast growth of streaming media services. The prospect that a Federal Court overturns the FCC's order could also shut the agency out from regulating competitive dynamics within the broadband market. "