Net Neutrality Overturned: Appeals Court Ruling Redraws the Internet’s Future

The internet and streaming could soon work differently—and cost more—after the courts struck down the Federal Communication Commission’s (FCC) net neutrality rules, which dictated that all internet traffic should be treated equally by internet service providers (ISPs).

The Sixth Circuit Court of Appeals’ ruling means ISPs will enjoy greater freedom in handling internet traffic—including whether to prioritize, throttle or even block access to certain sites depending on how much the sites or consumers are willing to pay. As a result, high-speed access to sites such as Netflix (NFLX) or YouTube could get more expensive.

Key Takeaways

• Net neutrality rules, first implemented under the Obama administration, defined ISPs as public utilities and required them to serve the public interest.
• Net neutrality prevented ISPs from selectively prioritizing or slowing access to certain websites or charging users more for accessing certain sites.
• The FCC repealed the net neutrality rules under the Trump administration but the Biden administration reinstated them in 2024.
• In January 2025, the Court of Appeals struck down net neutrality, ruling that the courts, not the FCC, had the authority to interpret relevant legislation in drafting and passing the rules.

Understanding Net Neutrality

The basic idea behind net neutrality is that the internet is a public utility, much like electricity or water, and the companies that own the infrastructure should treat all internet traffic equally. They should not have the power to determine how people lawfully use the internet nor discriminate against certain providers of content. It’s a principle that has kept the internet open to newcomers and startups on nearly equal footing with major tech giants.

Think about streaming your favorite show on Netflix while someone next door watches Disney+. Under net neutrality, internet providers weren’t allowed to give priority in traffic speed to one service over another. This prevented them from creating special “fast lanes” for companies that could pay more, or for companies that the ISPs themselves own, as well as charging consumers more for access to those fast lanes.

The Courts and the Chevron Doctrine

The striking of the net neutrality rules hinged on the “Chevron doctrine”, drawn from a 1984 Supreme Court ruling that gave federal agencies significant leeway in interpreting ambiguous statutes to craft regulations. The current Supreme Court overturned the Chevron doctrine in 2024, effectively ruling that the courts should be the ones interpreting ambiguous legislation.

Net neutrality had withstood previous legal challenges because of the Chevron doctrine, so the Supreme Court overturning the doctrine opened the door to the Court of Appeals ruling in January 2025 that the FCC’s authority was not broad enough to encompass net neutrality without more explicit Congressional approval.

In this case, the FCC sought to classify broadband as an “information service” under The Communications Act rather than a “telecommunications service.” The court ruled that the FCC lacked the statutory authority to do so.

Winners & Losers

Now that net neutrality has been rolled back again, ISPs will be much freer to control online traffic. This could lead to both positive and negative outcomes for different players.

Potential Winners

• ISPs: ISPs could now develop new revenue streams, either by charging certain websites or streaming services more for providing consumers high-speed access, or placing some consumers in a “slow lane” if they don’t pay more for high-speed access. ISPs might also decide to go into the content business and throttle access to competitor sites and services.
• Established tech giants: Tech giants like Amazon, Google, and Netflix might use their significant resources to secure favorable terms for their internet traffic.

Potential Losers

• Startups and small businesses: Young companies operating on tight budgets may struggle if ISPs charge extra for faster service—and risk losing visibility and customers.
• Consumers: Users may have to pay up for faster speeds. And businesses paying premiums to ISPs might also pass those costs along to their customers, resulting in increased fees or limited access to certain sites. Some consumer watchdogs warn that ISPs might begin selling the internet in bundles, much like traditional cable companies.

The Bottom Line

The striking down of net neutrality marks a significant stage in the development of the internet. While ISPs may gain new opportunities, websites, streaming services, and consumers, could face higher prices.

Congress might yet pass more explicit legislation that includes some of the measures in the net neutrality regulations, or the market might produce its own solutions. But for now, the death of net neutrality is likely to reverberate throughout the internet.