FCC Passes Net Neutrality Vote In Revamp Of Internet Regulation

UPDATED with vote results: The FCC just handed an historic victory to net roots activists — one that seemed politically beyond the pale a year ago. Chairman Tom Wheeler and two fellow Democrats on the commission voted to classify the Internet as a public utility in support of new rules that bar Internet service providers from blocking or throttling any content company’s transmissions.

The reclassification and net neutrality rules will take effect 30 days after they’re printed in the Federal Register.

Supporters say the changes are essential to protect competition as media and communications increasingly reach people via a handful of cable and phone companies — often local monopolies or oligopolies.

The Internet “has redefined commerce and entertainment” and is “the ultimate vehicle for free expression,” Wheeler says. It “is too important to be left without rules and a referee on the field.” He says that the rules work for wireless carriers, and will not affect ISPs’ revenue streams. He also defended the FCC’s decision to apply net neutrality to wireless providers, and to links with content distributors. “We will protect the values of an open Internet both in the last mile as well as at the point of interconnection.”

Commissioner Jessica Rosenworcel said that “we can not have a two-tiered Internet with fast lanes…and the rest of us lagging behind.” Fellow Democrat Mignon Clyburn thanked the 4 million people who wrote the FCC, overwhelmingly to support net neutrality rules.

Some ISPs likely will sue to block the FCC decision. Many say the rules could backfire by chilling investment in the highly lucrative service. They also fear that the FCC will regulate rates, even though Wheeler’s proposal specifically disclaims authority to do so.

“This will be a boon for trial lawyers” and could lead to taxes on the Internet that “will leave a welt on consumers’ wallets,” GOP Commissioner Ajit Pai says. “The Internet is not broken. There is no problem for the government to solve….The only thing we have to fear, is fear itself.” He predicted that the changes will be overturned either by a court or by Congress. Commissioner Michael O’Rielly echoed those views, calling the FCC vote a “monumental and unlawful power grab.”

Verizon SVP Michael Glover says the decision is “a radical step that presages a time of uncertainty for consumers, innovators and investors.”

As a technical matter, vote means that regulators can enforce fair-play rules much as they have for phone companies, using authority Congress granted the agency in 1934 under Title II of the Communications Act. Up to now, the FCC had more limited oversight power after it deemed the Internet to be an information service governed by section 706 of the 1996 Telecommunications Act.

The agency’s hand was forced by a series of court decisions that found the FCC lacked authority to establish strong open Internet rules without reclassifying the medium. Comcast successfully appealed a 2008 FCC order for the cable giant to stop slowing transmissions from BitTorrent. (Comcast agreed to stop, but still took the FCC to court.)

Regulators regrouped and adopted formal net neutrality rules in 2010. But Verizon challenged them, leading to a pivotal appeals court ruling in January 2014 that remanded the rules. Regulators overstepped their authority, justices said, after having decided to “classify broadband providers in a manner that exempts them from treatment as common carriers.”

Wheeler initially sought to revive the open Internet rules without reclassification, even though Clyburn and Rosenworcel had indicated that they wanted to go farther. Public pressure for a definitive change built after HBO’s John Oliver called on viewers to lobby the FCC for tough rules. In November. President Obama — who supported net neutrality in his election campaigns — urged the independent agency to support reclassification.

Wheeler called today’s vote “the proudest day of my public policy life.” He disputed charges by Pai and others that the FCC, a quasi-judicial body, was simply following President Obama’s orders. “The president has been well known, on record, for a long time in favor of net neutrality. So have I. Presidents always communicate their opinions to the FCC. That’s nothing new. But we are the expert agency.”