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F.C.C. Approves Net Neutrality Rules, Classifying Broadband Internet Service as a Utility

By REBECCA R. RUIZ and STEVE LOHRFEB. 26, 2015 - NY Times

WASHINGTON — The Federal Communications Commission voted on Thursday to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service into American homes.

Tom Wheeler, the commission chairman, said the F.C.C. was using “all the tools in our toolbox to protect innovators and consumers” and preserve the Internet’s role as a “core of free expression and democratic principles.”

The new rules, approved 3 to 2 along party lines, are intended to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else. Those prohibitions are hallmarks of the net neutrality concept.

Explaining the reason for the regulation, Mr. Wheeler, a Democrat, said that Internet access was “too important to let broadband providers be the ones making the rules.”

Mobile data service for smartphones and tablets, in addition to wired lines, is being placed under the new rules. The order also includes provisions to protect consumer privacy and to ensure that Internet service is available to people with disabilities and in remote areas.

Before the vote, each of the five commissioners spoke and the Republicans delivered a scathing critique of the order as overly broad, vague and unnecessary. Ajit Pai, a Republican commissioner, said the rules were government meddling in a vibrant, competitive market and were likely to deter investment, undermine innovation and ultimately harm consumers.

“The Internet is not broken,” Mr. Pai said. “There is no problem to solve.”

The impact of the new rules will hinge partly on details that are not yet known. The rules will not be published for at least a couple of days, and will not take effect for probably at least a couple of months. Lawsuits to challenge the commission’s order are widely expected.

The F.C.C. is taking this big regulatory step by reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. The Title II classification comes from the phone company era, treating service as a public utility.

But the new rules are an à la carte version of Title II, adopting some provisions and shunning others. The F.C.C. will not get involved in pricing decisions or the engineering decisions companies make in managing their networks. Mr. Wheeler, who gave a forceful defense of the rules just ahead of the vote, said the tailored approach was anything but old-style utility regulation. “These are a 21st-century set of rules for a 21st-century industry,” he said.

Opponents of the new rules, led by cable television and telecommunications companies, say adopting the Title II approach opens the door to bureaucratic interference with business decisions that, if let stand, would reduce incentives to invest and thus raise prices and hurt consumers.

“Today, the F.C.C. took one of the most regulatory steps in its history,” Michael Powell, president of the National Cable and Telecommunications Association and a chairman of the F.C.C. in the Bush administration, said in a statement. “The commission has breathed new life into the decayed telephone regulatory model and applied it to the most dynamic, freewheeling and innovative platform in history.”

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Supporters of the Title II model include many major Internet companies, start-ups and public interest groups. In a statement, Michael Beckerman, president of the Internet Association, which includes Google, Facebook and smaller online companies, called the F.C.C. vote “a welcome step in our effort to create strong, enforceable net neutrality rules.”

The F.C.C.’s yearlong path to issuing rules to ensure an open Internet precipitated an extraordinary level of political involvement, from grass-roots populism to the White House, for a regulatory ruling. The F.C.C. received four million comments, about a quarter of them generated through a campaign organized by groups including Fight for the Future, an advocacy nonprofit.

Evan Greer, campaign director for Fight for the Future, said, “This shows that the Internet has changed the rules of what can be accomplished in Washington.”

An overwhelming majority of the comments supported common-carrier style rules, like those in the order the commission approved on Thursday.

In the public meeting, Mr. Wheeler began his remarks by noting the flood of public comments. “We listened and we learned,” he said.

In November, President Obama took the unusual step of urging the F.C.C., an independent agency, to adopt the “strongest possible rules” on net neutrality.

Mr. Obama specifically called on the commission to classify high-speed broadband service as a utility under Title II. His rationale: “For most Americans, the Internet has become an essential part of everyday communication and everyday life.”

Republicans in Congress were slow to react, and initially misread the public mood. Senator Ted Cruz of Texas portrayed the F.C.C. rule-making process as a heavy-handed liberal initiative, “Obamacare for the Internet.”

In January, Senator John Thune, the South Dakota Republican, began circulating legislation that embraced the principles of net neutrality, banning both paid-for priority lanes and the blocking or throttling of any web content. But it would also prohibit the F.C.C. from issuing regulations to achieve those goals. This week, the Republicans pulled back, with too little support to move quickly.

Also at the Thursday meeting, the F.C.C. approved an order to pre-empt state laws that limit the build-out of municipal broadband Internet services. The order focuses on laws in two states, North Carolina and Tennessee, but it would create a policy framework for other states. About 20 states, by the F.C.C.’s count, have laws that restrict the activities of community broadband services.

The state laws unfairly restrict municipal competition with cable and telecommunications broadband providers, the F.C.C. said. This order, too, will surely be challenged in court.

http://nyti.ms/1zLd8IB