Obama’s defense of net neutrality sets up battle with Congress

President Obama waves after speaking at the Asia-Pacific Economic Cooperation (APEC) Summit at the China National Convention Centre on Nov. 10, 2014, in Beijing. President Obama waves after speaking at the Asia-Pacific Economic Cooperation (APEC) Summit at the China National Convention Centre on Nov. 10, 2014, in Beijing. Photo: Pool / Getty Images Photo: Pool / Getty Images Image 1 of / 1 Caption Close Obama’s defense of net neutrality sets up battle with Congress 1 / 1 Back to Gallery

Seven years ago, then-candidate Barack Obama promised to “take a backseat to no one” in protecting net neutrality — the principle that Internet service providers treat all online traffic equally.

But since then, activists have complained that President Obama has done little to stop proposed federal rules that would allow companies to pay for their content to travel in an online “fast lane,” also known as paid prioritization.

That changed Monday when Obama took his strongest stand yet to back net neutrality, setting up a showdown with the Republican-led Congress over the future of the Internet.

“I am asking for an explicit ban on paid prioritization,” Obama said Monday in a video posted on the White House website.

To further protect consumers, he also called for broadband companies to be regulated as utilities, like water or electricity providers, under Title II of the Telecommunications Act.

Obama’s ideas plant him squarely against powerful Internet service providers like Comcast and Time Warner, as well as his appointee Tom Wheeler, chairman of the Federal Communications Commission.

The federal panel, which operates independently of the president, is considering changing its guidelines after a federal appeals court sided with Verizon in January, ruling Internet service providers may prioritize certain content.

Ending net neutrality would make sure that those responsible for the heaviest volume of Internet traffic would pay their fair share to the service providers who maintain the digital pipeline, supporters say. An added fee might not crush a company like Google or Hulu, but it could hinder expression among those with less money to spare, critics contend.

Millions weigh in

The controversy surrounding the wonky issue has spread beyond the tech world. The FCC fielded a record number of comments — more than 3.7 million — on net neutrality in the past several months, nearly two-thirds of which supported Obama in reclassifying broadband as a utility, according to the nonpartisan Sunlight Foundation.

Net neutrality supporters were thrilled on Monday by Obama’s bold stand, particularly on his support for treating broadband like a utility. Even though the president’s power over the FCC ends with the appointment process, analysts and observers expect his comments to resonate with members of the panel as they debate the issue.

The comments also signal to Congress — which Republicans will fully control in January after last week’s midterm election — that Obama will veto any attempts they make to write laws that are friendlier to telecoms.

“This is huge,” said Becky Bond, political director of San Francisco’s Credo Action, which has been at the forefront of the fight to protect net neutrality since 2006. “This is a total gamechanger because it puts the FCC on notice as to where the president stands.”

In his remarks, Obama also urged the FCC to establish rules barring telecoms from blocking any website from consumers, so long as the content is legal. It would ensure that “every player — not just those commercially affiliated with an ISP — gets a fair shot at your business,” he said.

And he said Internet service providers should not be able to intentionally slow down certain content or accelerate other content, a process referred to as “throttling.” Netflix turned that into a political issue in June when it accused Verizon and other Internet service providers of slowing its streaming video service. (Netflix, which can suck up one-third of the Internet’s bandwidth during evenings, later cut deals with Comcast and Verizon to guarantee its movies and TV shows reach viewers quickly.)

Top Republican lawmakers say Obama is trying to overregulate Internet companies, which have helped drive the American economy.

“The Obama administration now wants to threaten that progress by imposing rules written in the 1930s to cover public utilities to now regulate the Internet,” said House Majority Leader Kevin McCarthy, R-Bakersfield, who has long called for less government regulation of technology. “The Internet has been, and needs to remain, free and open. The House will continue to resist the administration’s attempts to make it anything else.”

Stock prices fall

The news lowered the stock prices Monday of several telecoms, including Comcast, which dropped nearly 4 percent on the Nasdaq exchange from $55.20 to $52.95 per share. While Comcast says in advertising that it supports the concept of net neutrality, its executives slammed Obama’s call to reclassify broadband companies.

“This would be a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates,” said Comcast Executive Vice President David L. Cohen.

Any claims that reclassification would affect the bottom line for telecoms “are hogwash,” said James Tuthill, formerly Pacific Bell’s chief attorney for its matters before the FCC. Tuthill, who now teaches telecommunications law at UC Berkeley’s School of Law, said other industries, like cell-phone carriers, are regulated in that way “and it hasn’t stifled their innovation.”

Obama’s action Monday drew the loudest applause from liberals. But if he had come out so strongly weeks ago, might it have rallied the base before the election and blunted Republican victories?

No, says Bond, who spent the past several weeks campaigning for losing Democratic Senate candidates in North Carolina and Kentucky.

“This wasn’t on the table then,” Bond said.

Joe Garofoli is a San Francisco Chronicle staff writer. E-mail: jgarofoli@sfchronicle.com Twitter: @joegarofoli