Battle looms over tough open Internet rules

The fight for the soul of the Internet took a major turn Wednesday, as Federal Communications Commission Chairman Tom Wheeler's aggressive plan to keep the Internet open and neutral encountered enthusiastic support and threats of legal challenges.

After Wheeler outlined his plan to apply decades-old rules to label Internet service providers as public utilities, broadband Internet providers and their supporters quickly labeled it as unnecessary regulation that would stifle innovation. They vowed to thwart the plan via lawsuits and other tactics.

His backers — a diverse group ranging from Netflix and Google to an array of consumer groups — expressed their staunch approval in e-mails, comments and posts on Facebook and Twitter, reflecting the passion that net neutrality stirs among many.

The FCC is scheduled to vote on the proposal, which would prohibit content providers from paying for faster service, on Feb. 26. The plan will be circulated to the other FCC commissioners on Thursday.

It was an inauspicious day for the broadband industry, but not a surprising one. That Wheeler wants to apply the Title II authority for new net neutrality rules — named after the Title II of the Communications Act of 1934 — has been widely anticipated by industry watchers in recent weeks.

President Obama said late last year that he favored the Title II option. Wheeler also indicated that he was leaning toward the approach at the CES trade show in Las Vegas last month. The FCC's previous net neutrality rules were tossed out by a federal court last year.

Wheeler's proposal would mostly ban content providers from paying cable Internet companies, phone companies and wireless carriers to buy faster Internet "lanes" for their material, a practice known as "paid prioritization." ISPs also specifically will be prohibited from blocking or deliberately slowing access to legal content.

"Using (the Title II) authority, I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC," Wheeler wrote in a story posted Wednesday on Wired.com. "These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply — for the first time ever — those bright-line rules to mobile broadband."

"My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone's permission," he wrote.

Wheeler's proposal will refrain from adopting some Title II provisions that don't apply to ISPs. To encourage Internet providers to invest, Wheeler also said he'll "modernize" Title II and "tailor it for the 21st century."

The FCC will not regulate pricing and will impose no tariffs or rules that would require unbundling of services for consumers, he said. ISPs also will be allowed to conduct engineering work related to "reasonable network management."

Some data services that don't go over the public Internet — such as voice-over-Internet phones and heart-monitoring services — will not be subject to the rules.

"Today: a big day for the high speed Internet access story in America," tweeted Susan Crawford, a noted net neutrality proponent and author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.

Wheeler's proposal is hardly the last chapter of the net neutrality debate. Several lawmakers in Congress have introduced legislation that would regulate the Internet without treating ISPs as public utilities.

Anticipating the announcement, Hank Hultquist, AT&T vice president for federal regulatory, indicated in a blog Monday that legal challenges are sure to follow. "Those who oppose efforts at compromise because they assume Title II rests on bulletproof legal theories are only deceiving themselves," he wrote.

Verizon's deputy general counsel Michael Glover called Wheeler's proposal "unnecessary and counterproductive."

The draft legislation, mostly supported by Republicans, should be sufficient, Glover argued. Wheeler's approach "is unnecessary because all participants in the Internet ecosystem support an open Internet," he said. "It is counterproductive because heavy regulation of the Internet will create uncertainty and chill investment among the many players."

ISPs have long dreaded the application of Title II, which has more than 100 pages of text outlining do's and don'ts and would give the FCC immense regulatory power.

Title II allows the FCC to obligate ISPs to open their back-end networks to content providers and third-party content-delivery companies, they say. It could also require ISPs to sell portions of their networks to resellers and require them to file reams of documents on their service, they said.

But proponents say stringent rules are needed, because the cable industry is poised for consolidation and many consumers contend with local monopolies in broadband Internet service. Without specific rules, ISPs would be tempted to ban, slow down or seek payment from content providers that compete with a company that has an affiliation or is owned by the Internet provider, they argue. For example, Comcast, which is trying to buy Time Warner Cable, also owns NBC Universal, which has plans to expand streaming shows.

Since he took on the task of recasting net neutrality rules, Wheeler and the FCC have been besieged with passionate comments from both sides of the debate. The agency has received about 4 million comments, a record.

Wheeler said he also considered using another legal test — a determination of "commercial reasonableness" under Section 706 of the Telecommunications Act of 1996 — that would adjudicate any net neutrality violations on a case-by-case basis. He said he'll use some provisions of Section 706, along with Title II.

"While a recent court decision seemed to draw a road map for using this approach, I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers," Wheeler wrote Wednesday.

Officials at the FCC were mulling over legal implications of several options when Obama made his announcement, which may have nudged Wheeler to move in the direction of Title II.

"Congress wisely gave the FCC the power to update its rules to keep pace with innovation," Wheeler wrote. "Under that authority my proposal includes a general conduct rule that can be used to stop new and novel threats to the internet. This means the action we take will be strong enough and flexible enough not only to deal with the realities of today, but also to establish ground rules for the as yet unimagined."