US regulators have approved a historic 'net neutrality' plan which will impose the toughest rules yet on internet service providers.

The plan was approved by a party-line vote of 3-2, meaning the Democrats move ahead with the controversial proposal.

Under the new rules, the government can regulate broadband providers more heavily than in the past and restrict their power to control download speeds on the web.

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Federal Communications Commission Chairman Tom Wheeler (centre) greets commissioners Mignon Clyburn (left) and Jessica Rosenworcel at the FCC Net Neutrality hearing in Washington today

WHAT IS NET NEUTRALITY? Whether you're trying to buy a necklace on Etsy or stream the season premiere of Netflix's 'House of Cards,' your internet service provider would have to load all of those websites equally quickly. Broadband and fiber-optic service providers wouldn't potentially be able to create a tiered system where companies had to pay 'tolls' to get content to customers faster. Advertisement

The ruling kills off the idea of an internet 'fast lane' which could give preference to companies that can afford to pay more.

The vote, which was expected along party lines with Democrats in favour, came after a year of jostling between cable and telecom companies and net neutrality advocates, which included web startups.

It culminated in the FCC receiving a record four million comments and a call from President Barack Obama to adopt the strongest rules possible.

Lawsuits are now expected from the industry, which contends regulations will burden their investments and stifle innovation, potentially hurting consumers.

Michael Powell, a former Republican FCC chairman, warned that consumers would almost immediately 'bear the burden of new taxes and increased costs.'

'The internet is simply too important to allow broadband providers to be the ones making the rules,' FCC, chairman, Tom Wheeler said prior to the vote.

Wheeler said the claims that the FCC has a secret plan to regulate the internet are 'nonsense'.

He added, 'This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech. They both stand for the same concept.'

The FCC sought new net neutrality rules after a federal court rejected their previous version in January 2014.

The ruling confirmed the agency's authority over broadband but said it had improperly regulated Internet providers as if they were similar to a public utility.

That contradicted their official classification as 'information services' providers, which are meant to be more lightly regulated.

The agency's new policy reclassifies broadband as more heavily regulated 'telecommunications services,' more like traditional telephone service.

The shift gives the FCC more authority to police various types of deals between providers such as Comcast and content companies such as Netflix to ensure they are just and reasonable for consumers and competitors.

Internet providers will be banned from blocking or slowing any traffic and from striking deals with content companies, known as paid prioritization, for smoother delivery of traffic to consumers.

The shift gives the FCC more authority to police various types of deals between providers such as Comcast and content companies such as Netflix to ensure they are just and reasonable for consumers and competitors. It has been welcomed by some users on Twitter who were against corporate control

The FCC has expanded its authority over so-called interconnection deals, in which content companies such as Netflix Inc pay broadband providers to connect with their networks.

The FCC would review complaints on a case-by-case basis.

Wheeler's original proposal pursued a legal path suggested by the court.

It stopped short of reclassifying broadband and so had to allow paid prioritization, prompting a public outcry and later Obama's message.

With the latest draft, Wheeler sought to address some internet providers' concerns, proposing no price regulations, tariffs or requirements to give competitors access to their networks.

The Federal Communications Commission is voting on whether to reclassify broadband access as a 'telecommunications service under Title II.'

In simple terms, the FCC has reclassifed broadband as a utility, giving it more regulatory power over internet providers.

This means sites that create the content you read and watch online, won't face discrimination by network owners.

HOW WILL NET NEUTRALITY IMPACT YOU? What did the FCC vote on? The Federal Communications Commission is voting on whether to reclassify broadband access as a 'telecommunications service under Title II.' In simple terms, the FCC want to reclassify broadband as a utility, giving it more regulatory power over internet providers. Will changing how internet service providers are regulated also change your internet bill? It's likely too early to say. FCC chairman Tom Wheeler reasons internet service providers should still retain their pricing flexibility because he isn't suggesting implementing the part of proposal that would let the FCC set rates. What does this mean for smartphones? Even wireless carriers will fall under Title II if Wheeler's proposal is approved. A video service couldn't be blocked or slowed down, for instance, because it competes with an offering from the carrier. The proposal also extends to apps. Verizon, AT&T and T-Mobile are developing a mobile payment system called Softcard, for instance, and blocking access to rival payment apps such as Apple Pay would be barred. What happens now the vote has been approved? It will be a long time before anything materialises. Netflix won't stream any faster for you and ISPs won't stop investing in their networks or high speed fiber cables as a result. After commissioners make statements, the rules may not be published for a number of weeks. The rules will then go under regulatory review for months. The vote won't be official until, it is estimated, summertime. And even then, major telecom companies will challenge new rules in court. Both those for and against net neutrality see a long road ahead. Advertisement

FCC Chairman Tom Wheeler has three primary goals: to prevent internet service providers from blocking traffic to any website obeying U.S. laws; to ban 'throttling,' the practice of slowing down service for a commercial purpose; and to prevent the creation of 'fast lanes'

For instance, Verizon can't block Google Wallet on your smartphone, like it did in 2011.

Even wireless carriers fall under Title II if Wheeler's proposal.

That's important given that mobile phones are becoming the primary way that many people watch online video, play games, read and shop.

The FCC estimates that about 55 per cent of all internet traffic now travels over mobile broadband networks.

A video service couldn't be blocked or slowed down, for instance, because it competes with an offering from the carrier.

The proposal also extends to apps. Verizon, AT&T and T-Mobile are developing a mobile payment system called Softcard, for instance, and blocking access to rival payment apps such as Apple Pay would be barred.

OBAMA WILL WRECK THE INTERNET ECONOMY, SAYS FCC COMMISSIONER Republican commissioner Ajit Pai warned 'that consumers that use less data may end up subsidizing consumers that use more data' A Republican Federal Communications Commission board member last month issued a doomsday warning on his government agency's plan to adopt so-called net neutrality rules. Republican commissioner Ajit Pai pushed back on the decision by holding a press conference to disparage the FCC's 332 page 'secret plan' to take control of the internet that he cautioned would bring about 'adverse consequences to the entire Internet economy.' Pai warned 'that consumers that use less data may end up subsidizing consumers that use more data' and have 'less choice and less free data' if the plan is put into effect. 'My bottom line, if you like your current service plan, you should be able to keep your current service plan,' he said. 'The FCC shouldn't take it away from you.' Referring to the proposal as 'President Obama's plan,' Pai said it 'gives the FCC broad and unprecedented discretion to micromanage the Internet.' 'This plan gives a Washington bureaucracy a blank check to decide how Internet service providers deploy and manage their networks from the last mile all the way through to the Internet backbone.' Like other Republicans who oppose net neutrality rules, Pai said they would 'open the door to billions of dollars in new taxes on broadband' that could climb as high as $11 billion. Advertisement

Soon after the Federal Communications Commission (FCC) made the historical vote in favor of net neutrality Verizon issued a 1934-style release slamming the decision

The FCC has so far enforced 'open Internet' rules with the 1996 Telecommunications Act, which was intended to encourage competition in the telephone and cable industry.

However, a federal appeals court knocked down that approach.

President Barack Obama and consumer advocates say a better tack would be to apply Title II of the 1934 Communications Act.

Written 80 years ago with radio, telegraph and phone service in mind, that law prohibits companies from charging unreasonable rates or threatening access to services that are critical to society.

Now that the vote has gone through, the final rules may not be published for a number of weeks.

The rules will then go under regulatory review for months.

The vote won't be official until, it is estimated, summertime.

And even then, major telecom companies will challenge new rules in court.

Customers of Netflix, which has produced shows including House of Cards (pictured), could be charged more to stream programmes if the website chooses to pay more for a better service