FCC to take more time on net neutrality following Obama's position

Obama's recommendations are far-reaching, affecting cable and phone companies, including wireless providers

Following President Obama's statement today backing net neutrality rules, the Federal Communications Commission said it won't consider the issue at its December meeting and will put off rules changes until 2015.

"It has become plain that there is more work to do," FCC Chairman Tom Wheeler said in a statement. FCC spokeswoman Kim Hart added via email that "open Internet rules will not be on the December agenda, [which] means rules would not be finalized until 2015."

Wheeler said he agreed with the president that the Internet "must remain an open platform for free expression, innovation and economic growth ... We both oppose Internet fast lanes."

The FCC chairman said he would incorporate Obama's views into the record of the Open Internet proceeding, which has so far received more than 4 million comments on net neutrality from carriers, average Internet users and legal experts since May.

Industry executives said they had expected the FCC to take up the matter at its December meeting. Obama's statement this morning came as a surprise since it occurred on the same day that Wheeler planned to brief congressional leaders on his views.

Obama made four far-reaching rules recommendations to the FCC that would affect cable and phone companies, including wireless carriers which act as Internet service providers. "The FCC should make these rules fully applicable to mobile broadband" as well as to wired, or fixed, broadband service, Obama said.

Obama's rules recommendations called for no blocking of a website or service; no throttling, or slowing down or speeding up of services; and no paid prioritization that sticks an Internet service in a slow lane because it doesn't pay a special fee. The fourth proposed Obama rule calls for applying net neutrality to what is called "points of interconnection" between where an ISP operates and the rest of the Internet.

Obama was more explicit than in the past in his opposition to carriers taking payments for priority service. "I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect," Obama said.

The FCC is an independent agency, and the president has no direct authority to force the agency to act.

The legal approach that Obama asked the FCC to use in enforcing his recommendations could be the biggest stumbling block. Obama wants the FCC to reclassify consumer broadband service under Title II of the Telecommunications Act, while Wheeler said that FCC staff had begun using an alternative hybrid approach of using both Section 706 and Title II to keep the Internet open.

Various groups have already taken positions on the correct legal approach. The CTIA, a trade group for the wireless industry, said it "strongly opposes" Obama's reclassification to Title II as an "antiquated" approach on the "vibrant wireless ecosystem." Verizon Communications, which has recently said it opposes even the hybrid approach, said Obama's reclassification would not hold up in court.

Reactions among member of Congress to Obama's net neutrality position fell along party lines, with U.S. Sen. Ed Markey (D-Mass.) commending Obama. Meanwhile, U.S. Sen. John Thune (R-South Dakota) said using Title II rules would "turn the Internet into a government-regulated utility and stifle our nation's dynamic and robust Internet sector with rules nearly 80 years ago for plain old telephone service."

Digital rights groups such as Fight for the Future, MoveOn and the government accountability group Common Cause applauded Obama's position to enforce an open Internet through Title II common carrier provisions.

However, the Internet Innovation Alliance, an organization that supports broadband expansion, said using Title II would inhibit high-speed broadband deployment. The alliance's position comes as a surprise since last week the group proposed expanding the nation's Lifeline program, which subsidizes telephone and mobile service to the poor, to include broadband Internet service.

Alliance Chairman Richard Baucher, who was a U.S. congressman for 28 years, said using Section 706 instead of Title II to keep the Internet open would be a more "surgical" approach that has been endorsed by the U.S. Court of Appeals in Washington. "All the [reasons] to use Title II can be addressed with Section 706 but won't retard investment and will keep the Internet open," he said in a telephone interview.

Obama's net neutrality statement comes at a time when Internet services are undergoing immense changes.

Two pending mergers, one between Comcast and Time Warner, and the other between AT&T and DirecTV, could be affected by any FCC action, said Gartner analyst Bill Menezes in an email.

Further, he questioned, "Would net neutrality hinder a carrier's ability to prioritize its voice over LTE traffic over, say, Neflix? That's unclear right now."

Copyright © 2014 IDG Communications, Inc.

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