A divided Federal Communications Commission adopted Internet traffic rules on Tuesday, attracting warnings they would be rejected in the courts and threats from Republican lawmakers to overturn them.
The rules highlight a huge divide between those who say the Internet's openness needs guarding against the power of big high-speed Internet providers like Comcast Corp, and those believe the Internet will flourish without regulation.
Under the rules, the blocking of legal content would be banned but providers like Comcast and Verizon Communications will be allowed to reasonably manage their networks and charge consumers based on levels of Internet usage.
Wireless carriers like Sprint Nextel Corp, and Deutsche Telekom AG T-Mobile would get slightly more discretion to manage their networks but could not block access to websites, or to competing voice and video applications.
Approved by FCC Chairman Julius Genachowski and his two fellow Democrats, the rules were quickly condemned by Republicans and some companies as excessive and unnecessary.
Litigation will supplant innovation. Instead of investing in tomorrow's technologies, precious capital will be diverted to pay lawyers' fees, FCC Commissioner Robert McDowell warned at an open meeting of the FCC.
McDowell and Republican colleague Meredith Attwell Baker voted against the rules, and predicted they would be overturned in court.
The FCC's ability to regulate the Internet has been in doubt since an appeals court in April said the agency lacked the authority to stop Comcast from blocking bandwidth-hogging applications.
Several Republicans lawmakers, who will be in control of the U.S. House of Representatives come January and stronger in the Senate, vowed legislation to reverse the FCC action.
Even Verizon, which along with Google had proposed Web traffic rules in August, was highly critical of the plan.
Verizon said the rules' assertion of authority without solid legal underpinnings would lead to continued uncertainty for industry, innovators, and investors. In the long run, that is harmful to consumers and the nation.
Cable companies Comcast and Time Warner Cable were among the few companies to described the FCC rules as striking a balance between competing interests.
The rules could help cable companies in competition with plans by Microsoft Corp, Google and Amazon.com to deliver competing video content over the same Internet lines the cable companies run to customers' homes.
Charging consumers more for data-intensive tasks like downloading videos could tip the economics of Internet-delivered television back toward cable. The FCC has said it will monitor usage-based pricing for abuses.
Adoption of the measure had been expected after Copps and Clyburn had issued statements on Monday saying they would support the proposal despite some misgivings that it did not go far enough.
Genachowski told Tuesday's FCC meeting that the Internet was currently unprotected and he invoked the names of two Republican predecessors to argue for adoption of the rules.
The rules of the road we adopt today are rooted in ideas first articulated by Republican Chairmen Michael Powell and Kevin Martin, and endorsed in a unanimous FCC policy statement in 2005, said Genachowski.
(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)