FCC moves forward with net plan

reporting from washington — Federal regulators pushed forward with proposed new rules for Internet traffic that could allow preferential treatment for companies willing to pay more, thus ensuring more heated arguments ahead over so-called net neutrality.

The 3-2 vote Thursday by the Federal Communications Commission opened a four-month window for formal public comments on how strict the rules should be.

All sides in the long-running issue are expected to flood the FCC with comments, escalating the debate over whether the Internet needs tougher regulation to prevent abuses or be left free from government interference to foster innovative new services.

------------

FOR THE RECORD:
Net neutrality: In the May 16 Business section, an article about proposed Federal Communications Commission rules for Internet traffic that could allow favored treatment for companies willing to pay more included a headline that said the FCC was moving to ease network neutrality rules. As the story indicated, there are no rules in effect on net neutrality. —

------------

Some people eagerly weighed in Thursday.

Network neutrality advocates protested outside the agency’s headquarters and briefly disrupted the meeting as they argued for utility-like regulation of Internet service to ensure freedom of speech online.

“Don’t break the Internet,” one sign read.

At the same time, broadband providers warned that treating them like highly regulated phone companies would be a setback for the Internet and the economy.

“[It] would spark massive instability, create investor and marketplace uncertainty, derail planned investments, slow broadband adoption and kill jobs in America,” said David Cohen, Comcast Corp.’s executive vice president.

Net neutrality rules have tried to prevent preferential treatment that would allow network owners to charge such Internet companies as movie streaming firm Netflix Inc. more money for a private, high-speed toll road to customers’ homes. The fear is that the added costs to those providers would be passed on to consumers.

The new FCC proposal, from Chairman Tom Wheeler, doesn’t specifically allow such paid priority. But it doesn’t forbid it either.

The proposal simply would set a minimum level of Internet service that ensures “all users have access to an Internet experience that is sufficiently robust, fast and effectively usable.”

As part of that, Comcast, Verizon Communications Inc. and other providers would be prohibited from slowing the speed of Internet service below the level the user had contracted for.

The FCC proposal asks for public comment on whether such priority should be banned. It also seeks feedback on whether the agency should subject Internet service providers to tough, utility-like regulation.

In addition, Wheeler’s plan would prohibit network owners from blocking any legal content and from prioritizing delivery speeds for their own content. It also would create a watchdog position to look for abuses.

But there was skepticism that the plan would help consumers and Internet entrepreneurs rather than just boost the profits of broadband providers.

Wheeler, a Democrat who took over in November, said new rules were needed after a federal court tossed out the agency’s previous ones in January and left the Internet unprotected from discriminatory behavior. It was the second time a court has tossed out net neutrality restrictions.

His proposal, crafted to try to pass legal muster, has been misconstrued, said Wheeler, who has received about 100,000 emails on the issue since unveiling the plan last month.

It does not authorize the creation of fast lanes for some Internet content, he said. But he appeared to acknowledge that it could allow deals among companies, such as a recent one in which Netflix agreed to pay Comcast for smoother online streaming.

“Personally, I don’t like the idea that the Internet could be divided into haves and have-nots and I will work to see that does not happen,” Wheeler said.

Critics were not persuaded, worrying that the FCC was preparing to allow broadband providers to create preferential high-speed toll lanes.

“Net neutrality means all online content is treated equally. But under these rules, Internet providers could make one site available faster than another,” said Delara Derakhshani, policy counsel for Consumers Union. “Your provider could play favorites among the online companies that pay to play.”

Michael Pachter, research analyst at Wedbush Securities in Los Angeles, said that courts have limited how much the FCC can regulate the Internet and that some content providers such as Netflix probably are going to have to pay for faster delivery.

“Broadband providers have to invest to upgrade their networks to handle increasing quantities of data-rich media content, and somebody has to pay for it and that probably means Netflix users,” he said.

The FCC vote was along party lines, with both Republican commissioners opposed. Wheeler made some changes to his proposal this week to secure the votes of fellow Democrats Mignon Clyburn and Jessica Rosenworcel.

Both publicly thanked him for the changes, which included asking whether pay-for-priority deals should be banned outright and if the FCC should subject broadband providers to stricter utility-like rules.

Still, Rosenworcel criticized the process as rushed.

“We cannot have a two-tiered Internet, with fast lanes that speed the traffic of the privileged, and leave the rest of us lagging behind,” Rosenworcel said. “I would have preferred a delay. I think we moved too fast to be fair.”

The cornerstone of net neutrality, a decade-old concept that counts President Obama among its earliest political backers, is that all legal Internet content should be treated equally.

Obama still supports net neutrality and is watching the process, but the FCC is an independent agency, said White House Press Secretary Jay Carney.

As dozens of protesters gathered outside the FCC’s headquarters, four were removed from the meeting after loudly telling commissioners to protect the Internet.

One protester, Morgan LaRocca, 29, of Poughkeepsie, N.Y., believes the FCC should reclassify broadband providers for stricter telephone-like regulation under Title 2 of the nation’s telecommunications law.

“I think net neutrality is vital to preserving the Internet as we know it and preserving the free speech we have on it,” LaRocca said.

The chief executives of many providers, including AT&T Inc., Comcast and Verizon, wrote to Wheeler this week warning against the tougher regulations.

“Utility regulation would strangle investment, hobble innovation and put government regulators in charge of nearly every aspect of Internet-based services,” Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs, said after the vote.

Most Republicans also oppose such a move, including the FCC’s two GOP commissioners, Ajit Pai and Michael O’Rielly.

“Every American who cares about the future of the Internet should be wary about five unelected officials deciding its fate,” Pai said.

[email protected]

Times staff writer Meg James contributed to this report.