TWO VIEWS
“The time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. … This is a basic acknowledgment of the services (Internet service providers) provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone—not just one or two companies.”
— President Barack Obama
“The Internet has not just appeared by accident or gift – it has been built by companies like ours investing and building networks and infrastructure. The policy the White House is encouraging would jeopardize this engine for job creation and investment as well as the innovation cycle that the Internet has generated.”
— Tom Cohen, executive vice president, Comcast Corp.
Obama called on the Federal Communications Commission to more heavily regulate Internet providers and treat broadband much as it would any other public utility. He said the FCC should explicitly prohibit Internet providers like Verizon and AT&T from charging data hogs like Netflix extra to move their content more quickly. The announcement sent cable stocks tumbling.
The FCC, an independent regulatory body led by political appointees, is nearing a decision on whether broadband providers should be allowed to cut deals with the content providers, but is stumbling over the legal complexities.
“We are stunned the president would abandon the longstanding, bipartisan policy of lightly regulating the Internet and calling for extreme” regulation, said Michael Powell, president and CEO of the National Cable and Telecommunications Association, the primary lobbying arm of the cable industry, which supplies much of the nation’s Internet access.
This “tectonic shift in national policy, should it be adopted, would create devastating results,” added Powell, who chaired the FCC during the Bush administration until 2005.
Consumer groups and content providers hailed Obama’s move, with Netflix posting to its Facebook page that “consumers should pick winners and losers on the Internet, not broadband gatekeepers.”
“Net neutrality” is the idea that Internet service providers shouldn’t block, slow or manipulate data moving across their networks. As long as content isn’t against the law, such as child pornography or pirated music, a file or video posted on one site will load generally at the same speed as a similarly sized file or video on another site.
In 2010, the FCC embraced the concept in a rule. But last January, a federal appeals court struck down the regulation because the court said the FCC didn’t technically have the legal authority to tell broadband providers how to manage their networks.
The uncertainty has prompted the public to file some 3.7 million comments with the FCC — more than double the number filed after Janet Jackson’s infamous wardrobe malfunction at the 2004 Super Bowl.
On Monday, Obama waded into the fray and gave a major boost to Internet activists by saying the FCC should explicitly ban any “paid prioritization” on the Internet. Obama also suggested that the FCC reclassify consumer broadband as a public utility under the 1934 Communications Act so there will be no legal ambiguity. That would mean the Internet would be regulated the way phone service is.
“It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call or a packet of data,” Obama said.
But Internet providers, while saying they support the concept of an open Internet, want flexibility to think up new ways to package and sell Internet services. And, given the billions of dollars spent to improve network infrastructure, some officials say it’s only fair to make big bandwidth users like Netflix bear some of the costs.
AT&T on Monday threatened legal action if the FCC adopted Obama’s plan, while Comcast Corp. said reclassifying broadband regulation would be “a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates.” Other companies and trade organizations released similar statements.
Many Republicans including House Speaker John Boehner and prospective Senate Majority Leader Mitch McConnell of Kentucky sided with industry.
“‘Net Neutrality’ is Obamacare for the Internet,” Sen. Ted Cruz, R-Texas, a tea party favorite, declared on Twitter. “The Internet should not operate at the speed of government.”
FCC Chairman Tom Wheeler, a former industry lobbyist and venture capitalist, has said he is open to using a “hybrid” approach that would draw from both the 1934 law and the 1996 Telecommunications Act. On Monday, Wheeler said he welcomed the president’s comments, but suggested that his proposal was easier said than done.
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