FCC adopts Net neutrality

Broadband classified as public utility

FCC Chairman Tom Wheeler ends a meeting Thursday in Washington during which new rules were instituted for the Internet. Internet access is “too important to let broadband providers be the ones making the rules,” Wheeler said.
FCC Chairman Tom Wheeler ends a meeting Thursday in Washington during which new rules were instituted for the Internet. Internet access is “too important to let broadband providers be the ones making the rules,” Wheeler said.

WASHINGTON -- The Federal Communications Commission voted Thursday to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service.

Approved 3-2 along party lines, the rules are intended to ensure that no content is blocked and that the Internet is not manipulated by companies into pay-to-play fast lanes for those who can afford it and slow lanes for everyone else. Those prohibitions are hallmarks of the Internet neutrality concept.

Cable and telephone companies opposed the decision, saying the new rules risk stifling a fast-growing Internet and will lead to rate regulation.

Tom Wheeler, the commission chairman, said the FCC was using "all the tools in our toolbox to protect innovators and consumers" and preserve the Internet's role as a "core of free expression and democratic principles."

Explaining the reason for the regulation, Wheeler, a Democrat, said that Internet access was "too important to let broadband providers be the ones making the rules."

Mobile data service for smartphones and tablets, in addition to wired lines, also is being placed under the new rules. The order also includes provisions to protect consumer privacy and ensure that Internet service is available for people with disabilities and in remote areas.

Before the vote, each of the five commissioners spoke. The Republicans said the order is overly broad, vague and unnecessary. Ajit Pai, a Republican commissioner, said the rules were government meddling in a vibrant, competitive market and were likely to deter investment, undermine innovation and ultimately harm consumers.

"The Internet is not broken," Pai said. "There is no problem to solve."

The rules will not be published for at least a couple of days and will not take effect for probably at least a couple of months. Lawsuits to challenge the commission's order are widely expected.

The FCC is taking this regulatory step by reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. The Title II classification comes from the phone-company era, treating service as a public utility.

Verizon Communications Inc. took an uncharacteristically glib shot at the new Internet rules, which it said date back to the time of steam engines and telegraphs.

Verizon posted a rebuttal written in Morse Code on its policy blog and issued a statement titled: "FCC's Throwback Thursday" written in 1950s-era typewriter lettering.

"Readers in the 21st century can read the translated statement here," Verizon said at the end of the coded statement, linking to the English version: "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."

The new rules adopt some provisions of Title II and reject others. The FCC will not get involved in pricing decisions or the engineering decisions companies make in managing their networks. Wheeler, who gave a forceful defense of the rules just ahead of the vote, said the tailored approach was anything but old-style utility regulation. "These are a 21st-century set of rules for a 21st-century industry," he said.

Opponents of the new rules, led by cable television and telecommunications companies, say adopting the Title II approach opens the door to bureaucratic interference with business decisions and that such interference would reduce incentives to invest and thus raise prices and hurt consumers.

"Today, the FCC took one of the most regulatory steps in its history," Michael Powell, president of the National Cable and Telecommunications Association and a chairman of the FCC in the George W. Bush administration, said in a statement. "The commission has breathed new life into the decayed telephone regulatory model and applied it to the most dynamic, freewheeling and innovative platform in history."

Congressional Republicans fought bitterly to prevent the new rules, which they said constitute a dangerous overreach that will eventually raise costs for consumers.

Republican lawmakers said they would push for legislation to counteract the rules but that it was unlikely President Barack Obama would sign such a bill.

"Only action by Congress can fix the damage and uncertainty this FCC order has inflicted on the Internet," Sen. John Thune, R-S.D., chairman of the Senate Commerce Committee, said in a statement.

Supporters of the Title II model include many major Internet companies, startups and public-interest groups. In a statement, Michael Beckerman, president of the Internet Association, which includes Google, Facebook and smaller online companies, called the FCC vote "a welcome step in our effort to create strong, enforceable net neutrality rules."

The FCC's year-long path to issuing Internet rules to ensure an open Internet precipitated an extraordinary level of political involvement, from grass-roots populism to the White House, for a regulatory ruling. The FCC received 4 million comments, about a quarter of them generated through a campaign organized by Fight for the Future, a nonprofit advocacy group.

Evan Greer, campaign director for Fight for the Future, said, "This shows that the Internet has changed the rules of what can be accomplished in Washington."

An overwhelming majority of the comments supported common-carrier style rules like those in the order the commission approved Thursday.

In the public meeting, Wheeler began his remarks by noting the flood of public comments. "We listened and we learned," he said.

In November, Obama took the unusual step of urging the FCC, an independent agency, to adopt the "strongest possible rules" on Net neutrality.

Obama specifically called on the commission to classify high-speed broadband service as a utility under Title II. His rationale: "For most Americans, the Internet has become an essential part of everyday communication and everyday life."

Obama portrayed the decision as a victory for democracy in the digital age. In an online letter, he thanked the millions who wrote to the FCC and spoke out on social media in support of the change.

"Today's FCC decision will protect innovation and create a level playing field for the next generation of entrepreneurs -- and it wouldn't have happened without Americans like you," he wrote.

Among the spectators attending the FCC meeting for the vote was Apple Inc. co-founder Steve Wozniak, who said the action is "an indication that the people can sometimes win."

"This is a victory for the people, the consumers, the average Joes against these suppliers who have all of the power and wealth and make the decisions for them," Wozniak said in an interview with Bloomberg Television.

Also at stake Thursday was Obama's goal of helping local governments build their own fast, cheap broadband. Chattanooga, Tenn., and Wilson, N.C., have filed petitions with the agency to help override state laws that restrict them from expanding their broadband service to neighboring towns.

The FCC is considered likely to approve these petitions, which could set a precedent for other communities that want to do the same.

Nineteen states place restrictions on municipal broadband networks, many with laws encouraged by cable and telephone companies. Advocates of those laws say they are designed to protect taxpayers from municipal projects that are expensive, can fail or may be unnecessary.

Information for this article was contributed by Rebecca R. Ruiz and Steve Lohr of The New York Times; by Scott Moritz and Todd Shields of Bloomberg News; and by Anne Flaherty of The Associated Press.

Business on 02/27/2015

Upcoming Events