FCC approves new net neutrality rules

Show Caption Hide Caption FCC OKs 'net neutrality' rules Internet service providers like Comcast, Verizon, AT&T, Sprint and T-Mobile now must act in the "public interest" when providing a mobile connection to your home or phone, under rules approved by a divided Federal Communications Commission. (Feb. 26)

WASHINGTON, D.C. -- The Federal Communications Commission voted Thursday to implement new net neutrality rules designed to make sure Internet service providers treat all legal content equally.

The historic vote on the proposal, pitched by FCC Chairman Tom Wheeler, elicited hearty cheers from a wide array of technology companies and consumer groups while setting the table for lawsuits from Internet service providers. The controversial proceedings that led up to the vote generated heated lobbying in Washington and public clamor on social media, all in efforts to steer the future direction of the rules that guide Internet traffic.

"The Internet is too important to allow broadband providers to make the rules," said Wheeler to applause from the standing room-only crowd gathered before the FCC panel.

"So today after a decade of debate in an open, robust year-long process, we finally have legally sustainable rules to ensure that the Internet stays fast, fair and open," he said.

Net neutrality, also called open Internet, is a principle that Internet networks are equally available to all types of legal content generators. Internet service providers (ISPs), mostly large cable or telephone companies, would be prohibited from discriminating against content by blocking or slowing transmission speeds and seeking payments in exchange for faster lanes of their Internet networks, a practice called "paid prioritization."

Implementing the principle at a time when Internet streaming technology is changing so rapidly proved challenging to Wheeler as he sought to balance the varying interests of influential content streamers, like Netflix, and large ISPs that have spent millions to fight the effort. The FCC was besieged with passionate comments from both sides of the debate, receiving about 4 million comments, a record. In the end, Wheeler, with a nudge from President Obama, delivered on his proposals, though not without a fight from his colleagues and Republican lawmakers who wanted to delay the vote.

Wheeler's proposal reclassifies ISPs, including wireless data providers, as public utilities, like phone companies, that are subject to a set of regulations that ensure all consumers get fair access to their services. ISPs would be banned from paid prioritization deals, though they can set aside fast lanes for some exceptions, including public services, like remote heart monitoring.

The authority for the new rules comes from Title II of the Communications Act of 1934. The new rules also call for the regulators to "forbear" — or refrain — from some provisions of Title II, including pricing regulation and other parts that are less relevant to broadband services.

The FCC said the regulations will be posted online as quickly as possible and subsequently published in the Federal Register. They become effective 60 days after publication.

Pro-business advocates and ISPs, including wireless carriers, have denounced Wheeler's approach. The proposal's insistence on laying out the do's and don'ts of operating Internet networks would inhibit ISPs from introducing new services — say, connected refrigerators and smartphone-controlled windows and doors — and limit innovations in improving their networks, they say.

"What doesn't make sense, and has never made sense, is to take a regulatory framework developed for Ma Bell in the 1930s and make her great grandchildren, with technologies and options undreamed of eighty years ago, live under it," said Jim Cicconi, AT&T's senior executive vice president-external and legislative affairs, in a statement.

The five-member commission voted 3 to 2 to approve the proposal, as expected. Joining Wheeler in voting for his plan were Commissioners Mignon Clyburn and Jessica Rosenworcel. Commissioners Ajit Pai and Michael O'Rielly, the two Republicans on the commission, voted against it.

"We cannot have a two-tiered Internet with fast lanes that speed the traffic of the privileged and leave the rest of us lagging behind," Rosenworcel said. "We cannot have gatekeepers who tell us what we can and cannot do and where we can and cannot go online."

The outcome is hardly surprising as all five commissioners had telegraphed their stances since Wheeler revealed the summary of his proposal earlier this month. President Obama came out strongly in support of the Title II option late last year.

White House Press Secretary Josh Earnest said the White House's policy experts haven't had the chance to fully analyze the FCC's action, and stressed that the commission was mostly independent from the administration.

But he said the early indications were that the new rules were "in line with and consistent with" the principles Obama proposed last November.

Opponents sought to delay the vote until, citing a lack of transparency. On Monday, Pai and O'Rielly issued a joint statement criticizing Wheeler's refusal to reveal the entire 332-page plan and called for "the FCC leadership … to allow the American people a reasonable period of not less than 30 days to carefully study it" before the vote. The chairman made public only a summary before the vote.

O'Rielly reiterated his concern that Obama had inserted himself into the process. "I am just sick about what Chairman Wheeler was forced to go through during this process," O'Rielly said in a statement. "It was disgraceful to have the Administration overtake the Commission's rulemaking process and dictate an outcome for pure political purposes."

Several Republicans — Reps. Greg Walden, R-Ore. and Fred Upton, R-Mich., and Sen. John Thune, R-S.D. — helped create draft legislation in an effort to overrule the FCC's plans. Their legislation would ban paid prioritization, but falls short of reclassifying the Net as a utility.

"We will continue to seek a consensus solution, and hopefully bipartisan legislation, Cicconi said.

The FCC approved net neutrality rules since 2008. But Wheeler, a former tech industry executive and industry lobbyist, was forced to come up with a new proposal when the U.S. Court of Appeals for the District of Columbia in early 2014 tossed out the earlier rules.

Anticipating Wheeler's proposals, ISPs have started to threaten lawsuits. "Instead of a clear set of rules moving forward, with a broad set of agreement behind them, we once again face the uncertainty of litigation," Cicconi said.

Some the key details of the proposal are still unclear. The FCC would have authority to block any "interconnection" agreements — deals struck between ISPs and content providers to transmit data more efficiently in the "back-end" of the Internet networks — that are "not just and reasonable."

But whether Netflix can continue to pay some ISPs to locate its servers closer to their networks' key distribution points to stream its movies without too much lag time — as it does now — remains unclear.

"Today, the FCC settled it: Consumers win," Netflix said in a statement. "Today's order is a meaningful step towards ensuring ISPs cannot shift bad conduct upstream to where they interconnect with content providers like Netflix."

In a lengthy speech before the crowd, Pai also questioned the FCC's ability to continue to refrain from the "forbearance" promises it made. The FCC also has agreed to not impose further tariffs or require ISPs to unbundle some services or file a burdensome amount of documents. But "the plan repeatedly states that it is only forbearing 'at this time,'" Pai said. "For other rules, the FCC will refrain 'for now.'"

Contributing: Gregory Korte