FCC Approves Net Neutrality Rules 3-2, Setting Stage For Legal Battle

Federal Communications Commission Chairman Tom Wheeler arrives at the Net Neutrality hearing in Washington on Thursday. PHOTO: REUTERS
Federal Communications Commission Chairman Tom Wheeler arrives at the Net Neutrality hearing in Washington on Thursday. PHOTO: REUTERS

Telecom, cable industries expected to challenge commission’s 3-2 vote

The Federal Communications Commission voted Thursday to regulate Internet service like a public utility, expanding the U.S. government’s oversight of a once lightly regulated business at the center of the country’s commercial and social activity.

The 3-2 vote, along party lines, starts the clock ticking on an expected legal challenge from the telecom and cable industries.

The move marks a turn in the government’s approach to the Internet—from a hands off policy dating back two decades to encourage the Web’s growth to a more interventionist posture as commercial issues have multiplied.

It was spurred on by companies—such as Netflix Inc.—worried that they could face more onerous terms for carrying their traffic and by President Barack Obama, who made an unusual public plea for the rules late last year. The new regulations were strongly opposed by carriers such as Verizon Communications Inc. and AT&T Inc., and they even drew warnings from Google Inc., which told the White House privately it was making a mistake.

The rules prohibit Internet service providers from blocking Web traffic or charging websites for priority service. They also extend the FCC’s reach into the middle of the Internet by saying the commission will review so-called interconnection deals between companies such as Netflix and Comcast Corp. on a case-by-case basis to make sure they are reasonable.

Despite all the wrestling over legal principle, little is likely to change for consumers in the near term. Carriers very rarely block any traffic, and experiments like letting Web companies pay for toll-free mobile service haven’t gone very far. But advocates said the rules will preserve the open environment that has helped Web companies blossom.

FCC Chairman Tom Wheeler, who revealed details of the new rules earlier this month, received a standing ovation when he entered the commission room ahead of the vote.

Apple Inc. co-founder Steve Wozniak, who attended the meeting, said from the sidelines that broadband providers need to be more closely regulated.

“Broadband is essential, like water,” Mr. Wozniak said.

Verizon, in a statement typed on a Remington typewriter and datelined Feb. 26, 1934, harking back to the Communications Act passed that year, criticized the rules as antiquated and likely to create uncertainty that will hurt innovation. The new rules involve reclassifying broadband service as a telecom service regulated by Title II of the Act, which governs the more highly regulated phone business.

Mr. Wheeler reiterated Thursday that the commission is only doing so to establish regulatory authority to enforce net neutrality and it won’t impose more onerous regulations such as price controls.

The full FCC order will be available on the commission’s website within the next few weeks and will take effect 60 days after being published in the Federal Register.

Opponents plan to fight the rules in the Congress and in the courts.

The decision, which has already faced Republican criticism on Capitol Hill, will come under the microscope next month, when the five FCC commissioners are slated to appear before the Senate Commerce Committee.

Lawmakers in both parties have long said an update of telecommunications law is needed, and that clarity from Congress could help the FCC and the courts sort out the legal questions surrounding the issue. After the public outcry in support of strong rules to ensure net neutrality, Republican lawmakers began drafting alternative legislation that would avoid reclassifying broadband as a telecommunications service.

Backers—led by Senate Commerce Committee John Thune (R., S.D.), House Energy and Commerce Committee Chairman Fred Upton (R., Mich.) and Rep. Greg Walden (R., Ore.)—hoped to win bipartisan support to ensure net neutrality, but Democrats had shown less interest in the effort. On Thursday, however, Sen. Bill Nelson (D., Fla.) said he would be willing to continue talks on “true bipartisan legislation.”

A rewrite of telecom law is a huge lift in Congress, especially at a time of such polarization on Capitol Hill. Still, Mr. Thune said Wednesday he thinks the FCC’s action and likely lawsuits could prod lawmakers to act. The last rewrite was in 1996.

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SOURCE: The Wall Street Journal
Thomas Gryta

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