FCC tightens Internet oversight with new net neutrality rules

FCC reclassifies broadband providers as more highly regulated utilities, a victory for net neutrality backers

Federal regulators dramatically expanded government oversight of the Internet, installing the once-arcane concept of net neutrality as a guiding doctrine for broadband networks that have become essential to everyday life.

To ensure the uninhibited flow of data online, the Federal Communications Commission voted 3 to 2 along party lines Thursday to reclassify broadband providers as more highly regulated utilities.

The increasingly shrill debate in the last year over network neutrality — the idea that all legal content be treated equally online — has raised more profound issues of free speech, privacy, innovation, capitalism and the role of government in the 21st century.

"The Internet is the most powerful and pervasive platform on the planet. It's simply too important to be left without rules and without a referee on the field," said FCC Chairman Tom Wheeler, the architect of the agency's plan.

The new rules prohibit such companies as AT&T Inc., Time Warner Cable Inc. and Verizon Communications Inc. from slowing Internet speeds for some content such as video streams, selling faster lanes for delivering other data or otherwise discriminating against any legal online material.

Wheeler promised a modernized, light-touch regulatory approach that would exempt broadband service from many of the tougher provisions, particularly rate regulation, permitted by its new designation.

The partisan divide in the Democratic-controlled FCC reflected strong opposition from telecom companies and conservatives worried about government interference with a system that appears to be working well for all sides so far.

"Americans love the free and open Internet. We relish our freedom to speak, to post, to rally, to learn, to listen, to watch, and to connect online," said Ajit Pai, one of the FCC's two Republicans. "So it is sad ... to witness the FCC's unprecedented attempt to replace that freedom with government control."

Telecom firms criticized the vote as an unwarranted government intrusion that could scare away investors and slow network expansion. They've promised to challenge the regulations in court, which could take at least three years to decide. The rules will go into effect 60 days after they are published in the coming weeks.

"The FCC has taken us in a distressing direction," said Michael Powell, president of the National Cable & Telecommunications Assn. trade group, who called for Congress to overrule the FCC with more restrained net neutrality regulations.

"We must now look to other branches of government for a more balanced resolution," he said.

While telecom executives and Republican politicians blasted Wheeler's plan, it was cheered by Internet firms, public-interest advocates and Democrats.

Wheeler and the FCC's other two Democratic members — Mignon Clyburn and Jessica Rosenworcel — received a standing ovation at the start of the meeting by much of a capacity crowd filled with activists who had worked years to enact strong net neutrality regulations.

Apple Inc. co-founder Steve Wozniak, who was in the packed audience at FCC headquarters, suggested that net neutrality embodies the concerns about a consolidating broadband industry that leaves many customers with little choice in carriers.

Wozniak said it takes him seven hours to download a movie on iTunes because he has no broadband access at his home in the wealthy Silicon Valley town of Los Gatos. That, he said, showed the power of broadband network owners.

"Water is essential. Electricity is essential," Wozniak said in an interview. "These days broadband has become essential."

Veena Sud, a TV producer, told the FCC that the Internet was key to finishing her series, "The Killing," which began in 2011 but was canceled after two seasons. Netflix helped provide financing for a third season on AMC and then aired the show's final season online.

"We told some of our best stories, our toughest, most heartbreaking ones, in those last two seasons of the show — stories that never would have been on the air had it not been for the open Internet," said Sud, a member of the Writers Guild of America, West.

Hollywood's creative ranks — the WGA, producers and entrepreneurs who built Amazon.com, Netflix and thousands of YouTube video channels — have lobbied for the increased freedom to create and distribute content without a media company go-between.

Net neutrality regulations would prohibit broadband providers from favoring its own content over those of competitors, such as charging fees for faster delivery that could squeeze out smaller competitors.

But broadband providers and opponents of Wheeler's oversight said there has been no attempt to create so-called toll lanes on the Internet. They said the FCC is going too far in increasing regulation to address a problem that doesn't exist.

"We have never argued there should be no regulation in this area, simply that there should be smart regulation," said Jim Cicconi, AT&T's senior executive vice president for external and legislative affairs.

"What doesn't make sense, and has never made sense, is to take a regulatory framework developed for Ma Bell in the 1930s and make her great-grandchildren, with technologies and options undreamed of 80 years ago, live under it," he said.

Verizon highlighted its view that the FCC was taking an outdated approach by handing out copies of a statement that was typed on a 1930s-era typewriter that said "it is likely that history will judge today's actions as misguided."

House Speaker John Boehner (R-Ohio) called the new net neutrality regulations "a secret plan to put the federal government in control of the Internet." He and other Republicans criticized Wheeler for not publicly releasing the 317-page proposal before the vote.

Wheeler countered that the new rules were "no more a plan to regulate the Internet than the 1st Amendment is a plan to regulate free speech."

He said he was optimistic that the plan would stand up to legal challenges even though federal judges tossed out two earlier FCC attempts to enact net neutrality rules.

The FCC said it chose to take the controversial step of reclassifying broadband providers for utility-like regulation — reversing a 2002 agency decision — because the move stood the best chance of withstanding a legal challenge to the net neutrality rules themselves.

jim.puzzanghera@latimes.com

Times staff writers Meg James and Yvonne Villarreal in Los Angeles contributed to this report.

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