President Obama is urging the FCC to reclassify consumer broadband service — to open it to broader government oversight and regulation — with the goal of protecting the net neutrality principles that his administration has long supported.
In a lengthy statement that also included a video, Obama asserted “there is no higher calling than protecting an open, accessible and free Internet.” He urged the FCC to reclassify broadband service as a Title II telecommunications service but with caveats that would shield it from some aspects of regulation for such services.
“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. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies,” Obama said.
FCC chairman Tom Wheeler has previously said the agency would consider reclassifying broadband under Title II — a move staunchly opposed by Comcast, AT&T, Verizon and other Internet service providers as an unnecessary step that would impose undue burdens and decrease investment in high-speed networks.
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ISPs oppose the reclassification of broadband under Title II, because it could potentially give the FCC leeway to impose price regulations, conditions on wholesale access and other controls.
In response to Obama’s statement Monday, Verizon said Title II would “apply 1930’s-era utility regulation to the Internet,” calling it “a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation.” The telco also suggested such a regulatory change wouldn’t withstand legal challenges from ISPs and argued that the “light-touch regulatory approach” has been central to the Internet’s growth over the past two decades. Verizon challenged the FCC’s previous set of net neutrality rules, and the D.C. Circuit Court earlier this year struck down rules banning Internet providers from blocking or discriminating against certain types of content.
David L. Cohen, executive vice president at Comcast, said that reclassification “would be a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates.”
He added, “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.”
Such an approach also would run into a buzzsaw of Republican opposition on Capitol Hill, where the incoming GOP Senate majority can be expected to place pressure on the FCC even though it is an independent agency. As expected, House Republicans condemned Obama’s approach. The commission includes three Democrats and two Republicans, potentially giving Wheeler a majority on reclassification.
The National Cable and Telecommunications Assn., the lobbying group that represents the cable industry, said that it was “stunned that the president would abandon the longstanding and bipartisan policy of lightly regulating the Internet and calling for extreme Title II regulation.
The NCTA said that “this tectonic shift in national policy, should it be adopted, would create devastating results.” It called on the FCC to leave the issue to Congress, which it said can “easily unravel the legal and jurisdictional knot that has tied up the FCC in crafting sustainable open Internet rules, without resorting to the rules of the rotary dial phone era.”
The opposition from telecom and cable providers was a contrast to that of Internet giants like Facebook, Google, Twitter, eBay and Amazon. Through their trade group, the Internet Assn., the Internet companies praised Obama’s move.
“Using Title II authority, along with the right set of enforceable rules, the president’s plan would establish the strong net neutrality protections Internet users require,” the association said.
Netflix has been among the most vocal content companies calling for broadband to be regulated under Title II. “We agree with President Obama: consumers should pick winners and losers on the Internet, not broadband gatekeepers,” the company said on Monday. Obama also suggested that the net neutrality rules may even be applied to interconnection, an area that has been up until recently outside the scope of the net neutrality debate. But Netflix has argued that rules are needed, complaining that Internet providers like Comcast have started demanding fees to ensure that they have enough capacity to deliver Netflix video content to subscribers.
Obama’s announcement was also greeted by public interest groups, which have been pressing the FCC to reclassify broadband.
“The president wasn’t kidding when he said he’d take a back seat to no one on net neutrality,” said former FCC commissioner Michael Copps, who is not serving as an adviser to Common Cause.
“As someone who has been pushing for Title II since 2002, when the FCC wrongly classified broadband, I am thrilled. Now the FCC must show the same kind of leadership and courage.”
Demand Progress, which has led a vocal campaign for reclassification, also praised Obama’s announcement.
“This is a huge victory for the millions of Americans who have called for Title Ii reform, and a huge blow for the cable companies that seek to establish fast and slow lanes on the Internet,” said David Segal, executive director of Demand Progress.
In a statement, Wheeler called Obama’s statement “an important and welcome addition to the record of the Open Internet proceeding.
“As an independent regulatory agency we will incorporate the president’s submission into the record of the Open Internet proceeding,” he said. “We welcome comment on it and how it proposes to use Title II of the Communications Act.”
Wheeler has been working on a “hybrid” approach to net neutrality — which would reclassify the so-called “back end” of broadband service while applying a lighter regulatory touch to retail service. News of the proposal was greeted with skepticism by public interest groups, who argued that it still wouldn’t prevent Internet providers from giving priority to certain types of content, like big media companies that pay for speedier access to the consumer.
“The reclassification and hybrid approaches before us raise substantive legal questions,” Wheeler said. “We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face.”
Wheeler’s original proposal in April set out to establish rules that would survive legal challenges yet still would not reclassify the Internet. Public interest groups sounded the alarm over such an approach, saying that they would be too weak to prevent so-called “fast lanes,” or paid prioritization by Internet providers.
After the outcry, Wheeler asked for public comment on his proposal as well as other approaches, like reclassification or banning paid prioritization outright.
The FCC has been inundated with more than 3.7 million comments, a record for an agency proceeding, with groups like the Writers Guild of America calling for reclassification. But there also has been a counter campaign by groups urging the FCC to take a lighter approach to regulation.
In his statement, Obama also said that the FCC should ban paid prioritization, saying that “kind of gatekeeping would undermine the level playing field essential to the Internet’s growth.” “No service should be stuck in a ‘slow lane’ because it does not pay a fee.” he said. Wheeler also has said that he opposes Internet “fast lanes.”
Obama also said that the rules should apply to mobile services as well. The previous set of net neutrality rules, passed in 2010, spared such services from some of the more significant restrictions.
Here is President Obama’s video on net neutrality:
