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FCC Chairman: Reclassify Internet as a Utility

4 Feb, 2015 By: Erik Gruenwedel

FCC chairman Tom Wheeler

Chairman Tom Wheeler’s proposed outline marks a major win for net neutrality, and likely legal blowback from major ISPs

Tom Wheeler, chairman of the Federal Communications Commission, Feb. 4 disclosed in an op-ed his intention of reclassifying Internet service providers such as Comcast, Verizon and AT&T, as utilities under Title II of the Communications Act of 1934.

The proposal, which must be approved by the FCC commissioners, would be a major win for net neutrality advocates, who have called for equal access to the Internet and broadband, including the elimination of peering agreements ensuring faster streaming speeds — the latter, a bone of contention at Netflix, which has inked deals with Comcast and Vierizon, among others.

“It’s time to put in place rules to preserve the open Internet that has become an indispensable part of our daily lives,” Wheeler tweeted (@TomWheelerFCC).

Major ISPs have resisted reclassification, calling Title II antiquated and burdensome regulation that will stifle investment and innovation. Previous FCC net neutrality provisions were struck down last year by a federal appeals court following litigation by Verizon.

In a statement given to Wired, the FCC chairman disclosed he wants for the first time to group wireless networks (Verizon, AT&T, etc.) together with wired (Comcast, Time Warner Cable, Charter) under one classification.

"I am submitting to my colleagues the strongest open Internet protections ever proposed by the FCC," Wheeler wrote. "These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services."

Wheeler said the wireless industry has injected $300 billion in technology over the past 21 years, proving that Title II regulation doesn’t impede private investment or innovation.

“After nearly 4 million public comments, the time to settle the net neutrality question has arrived,” he wrote.

Michael Beckerman, CEO of the Internet Association, applauded the news, adding he welcomed further details of the proposal.

“Internet companies are pleased to hear that chairman Wheeler intends to enact strong, enforceable and legally sustainable net neutrality rules that include bright-line rules that ban paid prioritization, blocking and discrimination online," Beckerman said in a statement. "We look forward to seeing the text of the order to ensure that a free and open Internet is fully protected."

Blowback from ISPs and Congress is likely. With just two Republicans on the five-member FCC, GOP-controlled Congress has initiated its own broadband guidelines, which could largely be symbolic given President Obama’s veto power and support for net neutrality.

Regardless, former FCC chairman Michael Powell has said reclassification of ISPs under Title II would invite “World War III.”

Indeed, Verizon CFO Francis Shammo, speaking at an investor event in November, said countries that have applied strict government regulation have (allegedly) seen their broadband fall into “total failure” as investment and innovation slows to a crawl.

“Why do we need regulations around something that's working? If [the FCC goes] all the way to the extreme of Title II … I think it's going to be a very litigious environment,” Shammo said.

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