*

Court cites Supreme Court's Loper Bright decision in

ruling

*

FCC Chair Rosenworcel urges Congress to enact

net-neutrality

laws

*

Industry groups oppose reinstatement, citing anti-consumer

concerns

By David Shepardson

WASHINGTON, Jan 2 (Reuters) - A U.S. appeals court ruled

on Tuesday the Federal Communications Commission did not have

legal authority to reinstate landmark net neutrality rules.

The decision is a blow to the outgoing Biden administration that

had made restoring the open internet rules a priority. President

Joe Biden signed a 2021 executive order encouraging the FCC to

reinstate the rules.

A three-judge panel of the Cincinnati-based 6th U.S. Circuit

Court of Appeals said the FCC lacked authority to reinstate the

rules initially implemented in 2015 by the agency under

Democratic former President Barack Obama, but then repealed by

the commission in 2017 under Republican former President Donald

Trump.

Net-neutrality rules require internet service providers to

treat internet data and users equally rather than restricting

access, slowing speeds or blocking content for certain users.

The rules also forbid special arrangements in which ISPs give

improved network speeds or access to favored users.

The court cited the Supreme Court's June decision in a case

known as Loper Bright to overturn a 1984 precedent that had

given deference to government agencies in interpreting laws they

administer, in the latest decision to curb the authority of

federal agencies. "Applying Loper Bright means we can end the

FCC's vacillations," the court ruled.

The decision leaves in place state neutrality rules adopted by

California and others but may end more than 20 years of efforts

to give federal regulators sweeping oversight over the internet.

FCC Chair Jessica Rosenworcel called on Congress to act

after the decision. "Consumers across the country have told us

again and again that they want an internet that is fast, open,

and fair. With this decision it is clear that Congress now needs

to heed their call, take up the charge for net neutrality, and

put open internet principles in federal law," Rosenworcel said

in a statement.

The FCC voted in April along party lines to reassume regulatory

oversight of broadband internet and reinstate open internet

rules. Industry groups filed suit and successfully convinced the

court to temporarily block the rules as they considered the

case.

Incoming FCC Chair Brendan Carr voted against the

reinstatement last year. He did not immediately comment on

Thursday.

Former FCC Chair Ajit Pai said the court ruling should mean

the end of efforts to reinstate the rules, and a focus shift to

"what actually matters to American consumers - like improving

Internet access and promoting online innovation."

The Trump administration is unlikely to appeal the decision

but net-neutrality advocates could seek review by the Supreme

Court.

The rules would have given the FCC new tools to crack down on

Chinese telecom companies and the ability to monitor internet

service outages.

A group representing companies including Amazon.com ( AMZN )

, Apple ( AAPL ), Alphabet and Meta Platforms ( META )

had backed the FCC net-neutrality rules, while

USTelecom, an industry group whose members include AT&T ( T )

and Verizon, last year called reinstating net neutrality

"entirely counterproductive, unnecessary, and an anti-consumer

regulatory distraction".