FCC Passes New Net Neutrality Rules, Awaits Expected Legal Challenges

In a 3-2 vote, new net neutrality rules were approved by the FCC on Feb. 26 that will allow the agency to protect broadband Net access as a public utility. Critics already vow to file lawsuits.

FCC, broadband, net neutrality

New U.S. net neutrality rules were approved by the Federal Communications Commission in a 3-2 vote on Feb. 26 as expected, creating new FCC powers that will allow the agency to regulate the Internet as a public utility and causing critics to quickly promise to take legal actions against the decision.

In a five-page statement, the FCC said that the new rules were guided by three principles that the nation's broadband networks "must be fast, fair and open," which came from input received from more than 4 million Americans last year during public comment periods.

The new regulations will also "set sustainable rules of the roads that will protect free expression and innovation on the Internet and promote investment in the nation's broadband networks," the agency said. Two past attempts by the FCC to set rules for Internet use into the future were struck down by courts, but the latest attempt resolves the legal issues that eventually undermined those attempts, the agency said.

A huge provision of the new rules is that broadband Internet access will be reclassified as a public utility under Title II of the U.S. Communications Act, which the agency says will better enable it to protect the Internet for all users, from consumers to businesses to government and education. Title II of the Communications Act gives the FCC the power to regulate communications in the United States. Title II was originally intended to make sure that telephone companies provided service to anyone in their coverage area.

The new rules also include key provisions that broadband providers cannot block access to legal content, applications and services, nor can they "throttle," or slow up, access to lawful Internet traffic, according to the FCC. Also prohibited under the new rules is paid prioritization in which broadband providers could favor some lawful Internet traffic over other lawful traffic in exchange for extra payments, essentially prohibiting so-called "fast lanes" to the highest bidders.

"I am incredibly proud of the process the Commission has run in developing today's historic open Internet protections," Tom Wheeler, the chairman of the FCC, said in a statement. "I say that not just as the head of this agency, but as a U.S. citizen. Today's Open Internet Order is a shining example of American democracy at work."

One of the key reasons for the new rules, Wheeler said, is that it will prevent broadband Internet providers from prioritizing their interests above the interests of their users. "Our challenge is to achieve two equally important goals: ensure incentives for private investment in broadband infrastructure so the U.S. has world-leading networks and ensure that those networks are fast, fair, and open for all Americans," he said. "The Open Internet Order achieves those goals, giving consumers, innovators, and entrepreneurs the protections they deserve, while providing certainty for broadband providers and the online marketplace."

The new rules will now mean "there will be basic ground rules and a referee on the field to enforce them," said Wheeler. "If an action hurts consumers, competition, or innovation, the FCC will have the authority to throw the flag."

What the new rules will not mean, he said, are new "utility style" regulations imposed on broadband providers by the agency. "We forbear from sections of Title II that pose a meaningful threat to network investment, and over 700 provisions of the FCC's rules. That means no rate regulation, no filing of tariffs, and no network unbundling. During the 22 years that wireless voice has been regulated under a light-touch Title II like we propose today, there has never been concern about the ability of wireless companies to price competitively, flexibly, or quickly, or their ability to achieve a return on their investment."

Critics quickly began issuing statements against the new rules even before the official FCC vote was taken on Feb. 26.

Gary Shapiro, the president and CEO of the Consumer Electronics Association (CEA), said in a statement that the FCC's Title II reclassification for broadband providers "takes us in the wrong direction on the information superhighway," which is more heavy-handed than the "light regulatory regime that strikes the appropriate balance among fostering innovation, promoting competition and maintaining broad access to and across the Internet."

Instead, the FCC has "placed regulatory shackles and new legal risks on the Internet and those who use this technological marvel to create critical new services, products and jobs," Shapiro said. "The end result for consumers: less choice, higher costs and reduced innovation."

Mike Montgomery, the executive director of CALinnovates, a group that fosters relationships between government leaders and technology and startup communities, said in a statement that the new rules will do more to inspire lawsuits than they will to make effective changes for users.

"The loud sound coming from Washington today is resounding cheers from the lawyers, lobbyists and fundraising groups that will gain from today's FCC ruling for years to come," Montgomery said. "There will be a rush to the courtroom, which will take years to sort out. Congress must step in and provide a solution that affirms the principles of net neutrality but does so with modern legislation that reflects 21st Century technology. The next billion we spend should be on innovation, not lawsuits."