Final nail in coffin for Net neutrality?





NEW YORK (CNNMoney.com) -- Before Tuesday's midterm elections, there were 95 House and Senate candidates who pledged support for Net neutrality, a bill that would force Internet providers to not charge users more for certain kinds of Web content.

All of them lost -- and that could mean the contentious proposal may now be all but dead.

The Federal Communications Commission tried to implement Net neutrality rules but got smacked down in April by a court ruling saying it did not have the authority to do so. As a result, it is preparing a proposal asking Congress to give it new authority to regulate broadband Internet service.

If passed, the Net neutrality law would require Internet providers like phone and cable companies to treat all Web content equally. They would prevent providers from restricting access to certain sites or applications, or collecting fees to deliver some sites faster than others.

Content creators -- including Google (GOOG, Fortune 500), Yahoo (YHOO, Fortune 500), Amazon.com (AMZN, Fortune 500) and eBay (EBAY, Fortune 500) -- have largely supported Net neutrality. Internet providers -- most notably Comcast (CMCSA, Fortune 500) and Time Warner Cable (TWC, Fortune 500) -- have argued against it.

The debate over Net neutrality has been fiercely fought on both sides, and experts say the FCC's proposed legislation had little chance of passing even in the current Congress.

The way the FCC is considering implementing the new regulations is vehemently opposed by cable and telecom companies, as well as many Republican and Democratic lawmakers.

The FCC has proposed that broadband be reclassified as a "Title II" telecommunications service, similar to other telephone companies. Opponents say this is a nuclear option, since it could potentially prevent broadband providers from implementing legitimate controls over their service, such as curbing massive downloads that swallow up bandwidth for users.

Critics also argue the legality of reclassification to Title II is questionable, and the FCC would open the door to a sea of unnecessary court battles.

The FCC had planned on bringing its proposal to a vote in September, but delayed it until after the election, given the opposition. Even a more relaxed compromise bill drafted by Rep. Henry Waxman, D-Calif., failed to gain enough traction to pass.

Republican lawmakers largely oppose the idea of Net neutrality. Though a majority of Democratic lawmakers support the issue -- all of the 95 candidates that said they would support Net neutrality on the left-leaning Progressive Change Campaign Committee's website were Democrats -- they have been divided on whether to pass the FCC's proposed legislation.

The widespread Democratic losses made an already uphill battle even tougher. More than a dozen incumbent congressmen who had voted for a similar Net neutrality bill in 2006 were voted out of office on Tuesday, most notably Rep. Rick Boucher, D-Va., a 28-year House veteran.

Now, experts say the FCC needs to regroup and weigh its options.

"Obviously, the election results mean the FCC has to go about it alone or work out some sort of deal," said Ron Gruia, principal consultant at Frost & Sullivan. "That's not an easy balancing act. With change in the composition of House, the momentum for legislative change and the likelihood of changing broadband to Title II is gone."

The FCC declined to comment for this story.

Rey Ramsey, CEO of technology lobby group TechNet, said he believes the FCC will take up the legislation during the lame duck session. TechNet supports Net neutrality and has lobbied for the Waxman compromise bill.

But other experts said a lame duck vote was unlikely. Another option is for the FCC to reclassify broadband on its own, without Congress' support.

"The FCC will move forward eventually, because it has no other choice," said Sascha Meinrath, director of the left-leaning New America Foundation's Open Technology Initiative. "The FCC wanted Congress to move forward with its rules, but that amounted to an abdicating of its authority to Congress."

Though changing broadband to Title II on its own is arguably within the FCC's power, such an action would set it up for a series of legal battles, similar to the one it lost in April.

A third option is to try another compromise. Tired of inaction both in Congress and from the FCC, Google and Verizon (VZ, Fortune 500) hashed out a compromise proposal that they hoped would bridge the gap between the two sides and propel the legislation forward. But the FCC was ambivalent about the plan, and some big names like Facebook lobbied against it.