ALLT,PKT: Federal court questions net neutrality rules
Federal court questions net neutrality rules • 11:37 AM
•In oral arguments for a Verizon (VZ) suit aiming to overturn wireline net neutrality rules, a federal appeals court questioned the legal foundations of the FCC's 2011 mandate on the issue.
•In particular, the judges suggested ISPs were improperly referred to as "common carriers," a designation originally meant to guarantee equal access to phone networks.
•However, the judges did suggest the FCC has the ability to prevent ISPs from blocking traffic outright.
•Verizon and AT&T (T), who have long criticized the FCC's rules, are likely pleased with the way oral arguments went. Major bandwidth consumers such as Netflix, Facebook, and Google/YouTube, some of whom are already making payments to ISPs for direct access to their networks, are likely less enthusiastic.
•Deep packet inspection (DPI) hardware vendors Allot (ALLT +5.9%) and Procera (PKT +7.1%) stand to benefit from the removal of net neutrality rules, which have curtailed the use of their equipment on U.S. wireline networks (though not mobile networks).
•Separately, Procera announced this morning it has received a multi-million dollar expansion order from a Tier-1 Western European carrier for its high-end PL20000 DPI systems.