Obama-touted Iowa utility balks at FCC Internet plan

Matthew Patane | The Des Moines Register

Show Caption Hide Caption Obama pushes for broadband boost President Obama has plans to push the FCC to expand broadband access for communities who want it.

DES MOINES — The nation's top communications regulator is backing a plan that would give his agency more oversight over Internet service providers — over the objections of an Iowa utility that was recently touted by President Obama for its high-speed broadband service.

Federal Communications Commission Chairman Tom Wheeler announced Wednesday that he will send a plan to FCC commissioners that would reclassify the Internet as a public utility, similar to phone service.

That would give the FCC more regulatory power over service providers. It is backed by Obama and appeases some proponents of net neutrality — equal treatment for all information and content sent online.

"These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services," Wheeler wrote in an editorial that Wired published Wednesday.

But in a statement to the FCC, Cedar Falls Utilities said the plan promoted by Obama and endorsed by Wheeler would harm it and other small Internet service providers. During his trip to Iowa last month, Obama praised the utility for providing gigabit Internet service.

The utility's marketing manager, Betty Zeman, told the FCC that the reclassification would put heavy burdens on Cedar Falls Utilities and other small Internet service providers. Cedar Falls Utilities issued the statement with other small service providers via the American Cable Association, a lobbying organization.

Wheeler's proposal comes as the president, the FCC, telecommunications companies and heavy Internet bandwidth users such as Netflix debate the future of net neutrality and the best way to handle an open Internet.

The premise of net neutrality includes the idea that Internet providers should not move some content — such as streaming video — faster than others and should charge the same for sending the content, rather than cutting deals with some vendors that could affect customer service or pricing.

Wheeler, Obama and others have said an open Internet uninfluenced by business interests is necessary for daily life, necessitating its treatment as a public utility. Telecommunications companies, such as Verizon, argued Wednesday that Wheeler's proposal would impose regulations that would hurt innovation.

On Wednesday, Verizon called Wheeler's move "unnecessary and counterproductive."

Regulations from Wheeler's proposal would "create uncertainty and chill investment among the many players — not just Internet service providers — that now will need to consider FCC rules before launching new service," Michael Glover, Verizon senior vice president and deputy general counsel, said in a statement.

Mediacom, one of the main Internet providers in Iowa, said Wheeler's remarks make clear "the administration now intends to embark on the wrong regulatory path — one that will lead to higher prices, new taxes, market uncertainty, reduced investment, less innovation and years of litigation."

Nicholas Johnson, a University of Iowa professor of law and former FCC commissioner, said the FCC should have started treating the Internet like a public utility, or common carrier, years ago.

"If there was ever a need for something to be treated ideologically as a common carrier or public utility, it is the American people's access to the Internet," Johnson told the Register.

The reclassification, he said, would give regulators a "fighting chance" to make sure customers are getting the service they pay for.

"The ways in which the customer can be screwed over (currently) are limited only by the human imagination," Johnson said.

Wheeler has proposed reclassifying the Internet as a telecommunications service under Title II of the Communications Act. The Internet is currently defined as an information service, meaning the agency has less oversight.

Speaking with the Register on Wednesday, Zeman of Cedar Falls Utilities said her organization's leaders "absolutely support net neutrality."

"We practice it in the operation of our network; we do not prioritize or throttle any of our traffic," she said.

Zeman said, however, Cedar Falls Utilities and other small Internet service providers are concerned that the proposed reclassification could increase costs and burdens.

"Title II enforcement, we think, doesn't benefit net neutrality," she said.

In January, Obama visited the utility to promote his plans to make low-cost, high-speed broadband more accessible and competitive.

"We're going to clear away red tape, we're going to foster competition, we're going to help communities connect, and help communities succeed in our digital economy," Obama said during the visit. "And the good news is we know it works because of you. You guys were like the guinea pigs on this thing."

Should the FCC approve Wheeler's proposal, the statement from Cedar Falls Utilities asks that exceptions be made. For example, the utility and Internet service provider requested that the FCC prevent state regulations from being placed on top of any new federal regulations.

Wheeler embraced some exceptions Wednesday. His proposal would not have the FCC regulate prices Internet providers charge their customers. It also doesn't call for new taxes, according to an FCC fact sheet.

The FCC is expected to vote on the proposal Feb. 26, The Associated Press reported.

Zeman said the utility's stance on the net neutrality proposal is separate from its support for Obama's plans to make high-speed broadband more competitive.

The utility serves about 12,500 customers in the Cedar Falls market, providing Internet speeds up to a gigabit per second. That service made Cedar Falls the first city in Iowa where customers had access to gigabit speeds, which is seen as a gold standard for Internet access.

What is Net neutrality?

Net neutrality is the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favoring or blocking particular products or websites.