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. ( PR )

..........from Seeking Alpha