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F.C.C. Seeks a New Path on ‘Net Neutrality’ Rules

March 1, 2014 By EDWARD WYATT

WASHINGTON — Regulators are taking another crack at their effort to keep the web free and open, introducing new rules that would discourage Internet service providers from charging companies to stream their movies, music and other content through a faster express lane.

The proposal, unveiled by the Federal Communications Commission on Wednesday, is part of a continuing battle over the basic pipelines through which information flows on the Internet. With the latest plan, the F.C.C. is hewing close to previous efforts — albeit with some technical differences — with rules that would prevent Internet service providers from blocking any legal sites or services from consumers and would aim to restrict, but not outlaw, discrimination.

Broadband players like Verizon and Time Warner Cable have spent billions of dollars upgrading their infrastructure, and they argue that they should manage their networks as they like. They are pushing, for example, to give Netflix, Amazon and other content providers faster access to their customers at a cost.

But regulators want to prevent such deals, saying large, rich companies could have an unfair advantage. The worry is that innovation could be stifled, preventing the next Facebook or Google from getting off the ground. Consumer advocates have generally sided with regulators in the belief that Internet providers should not give preferential treatment to content companies willing to pay extra — a cost that could be passed on to customers.

The new proposal comes as the F.C.C. is considering Comcast’s bid to buy Time Warner Cable. The deal, which would unite two of the nation’s largest cable and broadband providers, has raised concerns that these bigger players would have the heft to strong-arm Internet content companies into paying for the right to reach customers.

Tom Wheeler, who took over the F.C.C. in November, has made so-called net neutrality a core issue for the agency. Under the latest proposal, Mr. Wheeler said that broadband companies would be subject to strict requirements to disclose their practices and would face greater enforcement efforts if they strayed from their promises.

“Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency,” Mr. Wheeler said in a statement.

The plan represents a reboot of sorts for the F.C.C.

Two previous efforts were thrown out by the United States Court of Appeals for the District of Columbia Circuit, the first in a 2010 case filed by Comcast. Despite the ruling, Comcast agreed to follow the rules as a condition of its purchase of NBCUniversal. Comcast said last week that this agreement would extend to its purchase of Time Warner Cable.

In another case, brought by Verizon, a federal appeals court ruled last month that a similar set of the F.C.C.’s rules illegally treated Internet service providers as regulated utilities, like telephone companies. But the court said that the commission did have authority to oversee Internet service in ways that encourage competition.

In essence, that ruling expanded the commission’s oversight, prompting the regulator to introduce the latest plan.

The main differences with the latest rules are technical, rather than substantive. In a strictly legal sense, the F.C.C. will cite another part of the law — Section 706 of the Communications Act — for its authority. Some of the rules would also be enforced case-by-case, avoiding a “bright line” regulation that the court said was so strict that it treated broadband companies like regulated telephone service.

In taking advantage of the ruling, the F.C.C. will not seek to immediately reclassify Internet service as a telecommunications service, subject to rate regulation and other oversight. Mr. Wheeler said that the commission would retain the right to do so, however, if its new rules were approved and did not appear to be working adequately. The commission also said it would not appeal the January court ruling.

One portion of the new proposal would significantly expand what are called the Open Internet rules. Mr. Wheeler said that the commission would look closely at overruling state laws that restrict the ability of cities and towns to offer broadband service to residents. That possibility was raised in a dissent to the court’s recent opinion.

Consumer advocacy and public interest groups — many of which had pressed the F.C.C. to regulate broadband companies the same way as utilities — expressed cautious optimism about the commission’s proposal.

“While skeptical that the FCC’s initial focus on Section 706 will yield meaningful results, we are encouraged to see that the F.C.C. plans to keep its ‘reclassification’ proceeding open,” Gene Kimmelman, president of Public Knowledge, said in a statement.

But the F.C.C.’s plan was poorly received by the agency’s two Republican commissioners. Mike O’Rielly, the most recently appointed commissioner, said he was “deeply concerned by the announcement that the F.C.C. will begin considering new ways to regulate the Internet.”

“As I have said before, my view is that Section 706 does not provide any affirmative regulatory authority,” he added, referring to the section of the Communications Act cited by the court. “We should all fear that this provision ultimately may be used not just to regulate broadband providers, but eventually edge providers,” or Internet content companies, he said.

Republican congressmen also expressed dismay. “No matter how many times the court says ‘no,’ the Obama administration refuses to abandon its furious pursuit of these harmful policies to put government in charge of the web,” said a statement from Representative Fred Upton of Michigan, chairman of the committee that oversees the F.C.C., and Representative Greg Walden of Oregon, leader of the technology subcommittee. “These regulations are a solution in search of a problem.”

But the agency has five commissioners — three of which, including Mr. Wheeler, are Democrats. So it is likely the rules will still get approved.

The F.C.C. will immediately begin accepting public comments on the outline of its new proposal, although it has not yet written the formal rules. The commission said it hoped to consider a formal set of rules by late spring or early summer.

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