Reactions On FCC Net Neutrality Plan: Cheers From Consumers, Boo From Telcos

Long-standing advocates of strong net neutrality rules applaud Federal Communications Commission (FCC) Chairman Tom Wheeler's announcement that he plans to propose rules that seek to reclassify Internet service providers, including both wired and wireless providers, as utility services under Title II of the Communications Act.

In an op-ed piece written for Wired on Wednesday, Wheeler says he is submitting the "strongest open Internet protections ever proposed by the FCC." The FCC chair has yet to unveil the specific rules to the public as he still has to discuss it with his four fellow commissioners, two of which are also Democrats. However, Wheeler gave us a good idea of what the third, and hopefully, final set of net neutrality rules would contain.

Among them, Wheeler proposes to effectively ban paid prioritization, the practice of placing deep-pocketed publishers to be placed in so-called fast lanes, at the expense of smaller blogs and websites who cannot afford to pay for faster networks. Under the latest proposal, ISPs would be reclassified as telecommunications utilities but will not be subject to rate regulation, tariffs, or unbundling of services.

The proposal strongly follows President Barack Obama's recommendation made last year to seek Title II reclassification for ISPs.

"We're certainly encouraged to see that the FCC is heading in the same direction of safeguarding net neutrality with the strongest possible protections," says White House Press Secretary Josh Earnest. "This is consistent with the view that the president articulated back in the fall."

The view is shared by most Democrats, who consider it "a triumph for the American consumer." House Minority Leader Nancy Pelosi (D-San Francisco), Rep. Doris Matsui (D-Sacramento), Rep. Anna Eshoo (D-Palo Alto), and Rep. Barbara Lee (D-Oakland) all praised Wheeler's proposal.

"This is the right move for the American public and for the future of Internet," says Rep. Matsui, a leading advocate of net neutrality on Capitol Hill.

Naturally, Republicans are not happy with Wheeler's announcement, arguing that such "heavy-handed" regulation will impede the progress of innovation and investment, which will further do more harm to consumers. In place of the FCC's proposed rules, Republicans are working on its own net neutrality draft that also prohibits ISPs from forming preferred relationships with certain content providers but without the authority by the FCC to impose regulations upon them.

"Wheeler overestimates the FCC's authority to rewrite our nation's communications laws - a responsibility tasked to Congress, not the FCC - and ignores the fact that his net neutrality rules almost certainly will be stuck in courts for years over questions of their legality," says House Judiciary Chairman Bob Goodlatte (R-Virginia). "Wheeler's approach would squelch investment in one of the most dynamic and competitive marketplaces in history, and lock net neutrality protection in the courts."

Wheeler argues that reclassification of ISPs as utilities will not impede innovation, as can be seen in the most recent FCC spectrum auction where participating companies such as Verizon and AT&T contributed to a total of $44.9 billion. He also says that while mobile carriers became utilities, companies have continued to invest $300 billion in the last two decades, while operating under similar rules that Wheeler says are tailored for the 21st century.

"My proposal assures the rights of Internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone's permission," says Wheeler.

The FCC chair, who himself was one of the first Internet entrepreneurs that attempted to capitalize on the early World Wide Web in the 1990s, says it was the lack of access to a fast and open Internet that contributed to the failure of his business. His proposal, therefore, will benefit new, innovative startups that thrive on the existence of an Internet that allows for unrestricted access to a level playing field, while also being "a huge win for consumers," says James Tuthill, professor of telecommunications law at the University of California Berkeley's School of Law.

Indeed, for Adam Mosam of Pivotshare, Wheeler's announcement is "amazing news." Mosam's three-year-old startup provides a streaming video platform similar to YouTube. If an ISP wants to charge Pivotshare to deliver its video content to its users, "the money has to come from somewhere." While YouTube, Netflix, and other major video-streaming services may be able to pay for the fast lanes - and, in fact, Netflix already does - Pivotshare will not be able to compete because it cannot pay for the fast lanes, Mosam says.

While new companies will benefit largely from the proposal, ISPs are expected to fight the proposal in court. Tuthill says the rules could take "minimum two years in the courts and it could be as many as five" as telecommunications companies prepare to get challenged by the legality of the rules.

In a blog post written by AT&T vice president of regulatory affairs Hank Hultquist, he says AT&T will not back down "when the FCC has to defend reclassification before an appellate court."

"Those who oppose efforts at compromise because they assume Title II rests on bulletproof legal theories are only deceiving themselves," Hultquist says.

Verizon vice president and deputy general counsel Michael E. Glover is also quick to react to Wheeler's announcement, warning that "heavy regulation of the Internet will create uncertainty and chill investment among the many players - not just Internet service providers."

"Heavily regulating the Internet for the first time is unnecessary and counterproductive," Glover says [pdf] in a statement. "It is unnecessary because all participants in the Internet ecosystem support an open Internet, and the FCC can address any harmful behavior without taking this radical step."

Sprint and T-Mobile, however, are both treading cautiously around the issue, saying they will wait to read the proposed rules before taking a certain stand.

"Sprint continues to believe a light-touch regulatory regime will not harm investment in broadband services," says Sprint in a statement mailed to CNET. "However, Sprint will review the proposed rules to confirm that they give carriers sufficient flexibility to control their networks and offer differentiated pricing and products, thus allowing competition to govern the market."

Under the proposed rules, Wheeler says ISPs may engage in "reasonable network management" to manage the technical and engineering aspects of their networks but may not be used for commercial purposes, such as throttling customers' mobile data when they reach certain usage levels although they were advertised as "unlimited" plans.