Federal Communications Commission Chairman Tom Wheeler speaks during a news conference in Washington, Oct. 8, 2014.(Photo: Jose Luis Magana, AP)
Federal Communications Commission Chairman Tom Wheeler revealed Wednesday that he'll propose applying decades-old communications rules to Internet service providers to ensure that the Internet remains open to all legal content, an option that cable companies and other ISPs had feared and fought against vigorously.
That Wheeler wants to apply the "Title II" authority for new net neutrality rules — named after the Title II of the Communications Act of 1934 — to regulate ISPs like public utilities has been widely anticipated by industry watchers in recent weeks. Wheeler's proposal would ban paying ISPs to get faster service.
President Obama said late last year that he favored the Title II option. Wheeler also indicated that he was leaning toward the approach — which would impose stringent rules on Internet providers — at the CES trade show in Las Vegas last month.
"Using (the Title II) authority, I am submitting to my colleagues the strongest open internet protections ever proposed by the FCC," Wheeler wrote in a story posted Wednesday on Wired.com. "These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply — for the first time ever — those bright-line rules to mobile broadband. 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."
To encourage Internet providers to continue to invest, Wheeler said he'll "modernize" Title II and "tailor it for the 21st century."
The FCC will not regulate pricing and impose no tariffs or rules that would require unbundling of services for consumers, he said.
Consumer advocates, who have lobbied for the Title II option, cheered Wheeler's announcement. "The Internet is the town hall of the 21st century; if we want our democracy to flourish, we must see that it remains open to everyone," said Miles Rapoport, president of non-profit group Common Cause. "That's why today's signal that the FCC will reclassify Internet service under Title II...is so important."
The cable industry saw this move coming. In a blog post late Monday, AT&T vice president for federal regulatory Hank Hultquist said the company will likely sue if Title II was applied. "Those who oppose efforts at compromise because they assume Title II rests on bulletproof legal theories are only deceiving themselves," he wrote.
ISps have dreaded the application of Title II, which has more than 100 pages of text outlining dos and don'ts and would give the FCC immense regulatory power.
Proponents say stringent rules are needed to regulate ISPs since the cable industry is poised for consolidation and many consumers contend with local monopolies in broadband Internet service. Without specific rules, ISPs would be tempted to ban, slow down or seek payment from content providers that compete with a company that has an affiliation or is owned by the Internet provider, they argue. For example, Comcast, which is trying to buy Time Warner Cable, also owns NBC Universal, which has plans to expand streaming shows.
Internet providers say tighter regulations could stifle innovation and prevent further investment. Title II allows the FCC to dictate pricing that ISPs charge consumers and content providers, as well as obligating ISPs to open their back-end networks to content providers and third-party content delivery companies. It could also require ISPs to sell portions of their networks to resellers and require them to file reams of documents and report cards on their quality of service and pricing structures.
Since he took on the task of recasting net neutrality rules, Wheeler and the FCC have been besieged with comments from passionate observers on both sides. The agency has received about 4 million comments, a record. Wheeler will circulate his proposal to other commissioners this week, and they are scheduled to vote on it later this month.
Wheeler said he considered using another legal test -- a determination of "commercial reasonableness" under Section 706 of the Telecommunications Act of 1996 -- that would adjudicate any net neutrality violations on a case-by-case basis.
Net neutrality proponents criticized this approach, arguing that it could lead to pay-for-play "fast lane" Internet deals that would could hamper smaller companies and startups. Wheeler seems to have agreed with their argument.
"While a recent court decision seemed to draw a roadmap for using this approach, I became concerned that this relatively new concept might, down the road, be interpreted to mean what is reasonable for commercial interests, not consumers," Wheeler wrote Wednesday.
Officials at the FCC were mulling over legal implications of several options when Obama made his announcement, which may have nudged Wheeler to move in the direction of Title II.
"Congress wisely gave the FCC the power to update its rules to keep pace with innovation," Wheeler wrote. "Under that authority my proposal includes a general conduct rule that can be used to stop new and novel threats to the internet. This means the action we take will be strong enough and flexible enough not only to deal with the realities of today, but also to establish ground rules for the as yet unimagined."
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