Tom Wheeler, chairman of the U.S. Federal Communications Commission, revealed significant details Wednesday about his long-awaited open-Internet proposal, including his support for reclassifying the Internet as a public utility through Title II of the Communications Act of 1934. In an op-ed published on the Wired magazine website, Wheeler said the proposal will ban paid prioritization -- and the blocking and throttling of legal content -- thereby preventing broadband providers from charging content companies for so-called Internet fast lanes. The basic principle of net neutrality is that all Internet data should be treated equally.
Cable, broadband and telecommunications companies oppose utility-like regulation, and have indicated they will sue if the FCC’s proposed rules include Title II reclassification. Companies argue that bogging down the industry under a regulatory framework written for a different era would grind broadband innovation to a halt and discourage future investment.
Despite the industry opposition, stocks for major cable companies jumped with news of Wheeler’s op-ed. Shares of Comcast Corporation, Time Warner Cable Inc. and were up a respective 2.8 percent, 4.5 percent and 7.9 percent in midday trading.
Wheeler said his plan will take a light-touch approach, tailoring Title II for the 21st century with a number of exemptions he said will preserve investment incentives for broadband providers. The exemptions, known as forbearance, were widely expected.
“For example, there will be no rate regulation, no tariffs, no last-mile unbundling,” Wheeler wrote. “Over the last 21 years, the wireless industry has invested almost $300 billion under similar rules, proving that modernized Title II regulation can encourage investment and competition.”
Net neutrality advocates and Internet firms like Google Inc. and Amazon.com Inc. say strong regulations are needed to prevent providers like Comcast from charging companies like Netflix Inc. for faster service, a process they say would hurt emerging players.
Republicans, meanwhile, oppose Title II reclassification and have introduced draft legislation that would undermine the FCC’s authority to impose its rules.
But Wheeler said it’s the FCC’s authority that has allowed the Internet as we know it to flourish. “The internet wouldn’t have emerged as it did, for instance, if the FCC hadn’t mandated open access for network equipment in the late 1960s,” he wrote. “Before then, AT&T prohibited anyone from attaching non-AT&T equipment to the network. The modems that enabled the internet were usable only because the FCC required the network to be open.”
Wheeler’s full proposal has not yet been made public, although it is expected to leak before the FCC votes on it on Feb. 26.
Read the full op-ed here.