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The decision was a setback for the Obama administration's goal of Internet openness.
The anti-discrimination and anti-blocking requirements bar broadband providers from prioritizing some types of Internet traffic over others.
A three-judge panel said that the FCC has the authority to regulate broadband providers' treatment of Internet traffic. However, the judges concluded that the FCC failed to establish that its regulations don't overreach.
FCC Chairman Tom Wheeler said the commission will consider its options, including an appeal, to ensure that networks on which the Internet depends provide a free and open platform.
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