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The FCC approves strong net neutrality rules

February 26, 2015 By Cecilia Kang and Brian Fung

The Federal Communications Commission for the first time classified Internet providers as public utilities Thursday, a landmark vote that officials said will prevent cable and telecommunications companies from controlling what people see on the Web.

The move, approved 3 to 2 along party lines, was part of a sweeping set of new “net neutrality” rules aimed at banning providers of high-speed Internet access such as Verizon and Time Warner Cable from blocking Web sites they don’t like or auctioning off faster traffic speeds to the highest bidders.

FCC Chairman Tom Wheeler argued that the agency needed to take a dramatic step to preserve a “fast, fair and open Internet.” Broadband Internet providers will now face some of the same heavy regulations that the federal government imposes on telephone companies.

“The Internet has replaced the functions of the telephone,” Wheeler said during the commission vote. “The Internet is simply too important to allow broadband providers to be the ones making the rules.”

Cable and telecommunications companies, as well as GOP lawmakers, quickly condemned the move as an overreach of government intervention into their businesses, and lawsuits are expected to follow.

They have argued that online companies whose services hog a lot of the Web traffic flowing to homes, such as the streaming videos of Netflix or YouTube, should share in the cost of expanding and maintaining the pipes that deliver Internet content to consumers. Without their help, the cable and telecom industry may be reluctant to upgrade and expand their networks across the country.

Verizon, for one, criticized the new regulations as “antiquated” and, to make its point, issued a statement on its company blog in the form of Morse code. “FCC’s ‘Throwback Thursday’ Move Imposes 1930s Rules on the Internet,” the headline read.

“Today’s decision by the FCC to encumber broadband Internet services with badly antiquated regulations is a radical step that presages a time of uncertainty for consumers, innovators, and investors,” according to a ­company-provided translation of the Morse code.

The rules ban Internet providers from several specific activities: They can’t block or stop Web services such as Netflix. They can’t slow down or ­“throttle” content from particular Web sites. And they can’t speed up a Web site’s traffic, particularly in exchange for money.

The rules also apply to wireless carriers such as Verizon Wireless, Sprint and T-Mobile, which provide Internet service to tens of millions of smartphones and tablets.

Consumers should not see any immediate changes to what they see on the Internet — in some ways, Wheeler said, that was the whole point of the effort. He added that there would be no new federal taxes or fees put on Internet service providers.

“This is no more a plan to regulate the Internet than the First Amendment is a plan to regulate free speech,” Wheeler said.

The action by the FCC also fulfills a promise made by President Obama stemming from his days on the campaign trail, when he announced in 2007, “I will take a back seat to no one on my commitment to network neutrality.” But throughout his administration, and through two of his appointees picked to lead the FCC, that goal has been obstructed by legal challenges and a caustic multimillion-dollar lobbying campaign between Silicon Valley and cable and telecom Internet service providers over the rules.

When it appeared that the FCC was favoring a weaker set of rules, Obama spoke out in November and called for the strongest possible regulations over cable and telecom companies. Several analysts and industry officials have said that the final outcome was a reflection of Obama’s remarks, though Wheeler maintained on Thursday that his decision was made independently of White House influence.

Through the debate, the wonky issue of net neutrality went mainstream, prompting 4 million people to file comments to the FCC, which caused its Web site to temporarily shut down. Late-night comedian John Oliver drew millions of Web users to his satirical breakdown of Wheeler’s earlier, weaker approach. A handful of protesters even sat in the driveway of Wheeler’s home to block him from getting to work and to pressure him to pass tougher rules.

“It would be hard to overstate how big of a deal this is for consumers and the future of the Internet,” said Ellen Bloom, senior director of federal policy for Consumers Union. “We’re not out of the woods yet. We’re into the woods, really. We expect opponents to look for every angle they can to stop these rules, whether in court or in Congress.”

The precise language of the FCC’s rules was not revealed Thursday, and it could take weeks for the regulations to be published in the Federal Register, when they will be made public.

At that point, Internet providers will have several weeks to take legal action against the regulation. Already, two of the top cable trade groups in Washington have indicated they may sue the FCC.

Other groups and companies are contemplating whether to ask for a stay of the rules — a legal order that would temporarily prevent the FCC’s regulation from taking effect.

“This is one more step in the swamp,” said a telecom industry official who spoke on the condition of anonymity to speak about the matter freely. “There’s much more of a slog to come.”

The wait gives Congress more time to develop a legislative proposal that would supersede the FCC’s regulation. Outreach to Democrats and Internet companies has already begun; on Tuesday, House and Senate Republicans sent invitations to Internet companies for an upcoming meeting on Capitol Hill. Key liberals applauded the FCC vote but also signaled that they intended to work with Republicans on a bill.

“Overzealous government bureaucrats should keep their hands off the Internet,” House Speaker John A. Boehner (R-Ohio) said in a statement. “More mandates and regulations on American innovation and entrepreneurship are not the answer, and that’s why Republicans will continue our efforts to stop this misguided scheme.”

House Majority Whip Steve Scalise (R-La.) said GOP lawmakers will work on a less aggressive law for net neutrality that doesn’t allow for broadband to be classified as a utility service.

“I stand ready to lead the opposition against the FCC’s decision and to work with my colleagues to produce a legislative outcome that truly preserves and protects a free and open Internet,” Scalise said in a statement.

Wheeler argued that the rules aren’t draconian. He said he stripped out some of the obligations that apply to phones — there are no caps on how much broadband companies may charge consumers or tariffs on Internet traffic.

And after more than a decade of debate at the FCC over net neutrality, Wheeler seemed to recognize the historic importance of the vote, saying “it was the proudest day of my public policy life.”

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