The Federal Communications Commission approved strict new rules Thursday that regulate Comcast Corporation and other Internet service providers, treating them more like utility companies.
The net neutrality regulations limit Comcast and other ISPs from controlling download speeds and creating fast lanes that expedite access to websites that pay a fee.
The shift also gives the FCC more authority to police various types of deals between providers and content companies such as Netflix Inc. to ensure they are just and reasonable for consumers and competitors. The FCC voted 3-2 along party lines, with Democrats in support, to set the new so-called net neutrality rules.
Philadelphia-based Comcast — the largest ISP in the country — supported the net neutrality principles but disagreed with the reclassification of broadband providers as a telecommunications service.
"We know that our business has grown and thrived because consumers want access to everything that the Internet makes possible, and we want to meet that demand,"
Executive Vice President David L. Cohen wrote in a blog post. "This is why we have no issue with the principles of transparency and the no blocking, no throttling, and no fast lanes rules incorporated in today’s FCC order. But we remain deeply concerned that implementing those principles through (reclassification) will do more harm to the vibrant Internet ecosystem than good."
Cohen predicted the reclassification will spark "years of litigation and regulatory uncertainty" and may harm innovation and investment. The best way to avoid that, he wrote, is for Congress to take action.
"We are confident this can be done in a bi-partisan manner with a consensus approach that accomplishes the common goals of stakeholders on all sides of the open Internet debate without the unnecessary focus on legal jurisdiction and the unnecessary regulatory overhang from 80 year-old language and provisions that were never intended to be applied to the Internet," Cohen wrote.
Verizon Communications, a competing broadband provider, released a statement Thursday opposing the FCC ruling.
Senior Vice President Michael E. Glover said ISPs are now subjected to "badly antiquated regulations" that were written in the era of the steam locomotive and telegraph. His statement was released in a smeared, type-written font for effect.
"Over the past two decades, a bipartisan, light-touch policy approach unleashed unprecedented investment and enabled the broadband Internet age consumers now enjoy," Glover said. "The FCC today chose to change the way the commercial Internet has operated since its creation. Changing a platform that has been so successful should be done, if at all, only after careful policy analysis, full transparency, and by the legislature, which is constitutionally charged with determining policy."
Republicans have argued the broad scope of the FCC rules represents government overreach. But President Barack Obama on Thursday praised new rules, thanking Americans who wrote to the regulator to weigh in on the issue.
Salil K. Mehra, a professor at Temple University’s Beasley School of Law, said the basis for the FCC ruling can be traced to the federal government’s regulation of the Bell System telephone monopoly. The ruling, Mehra said, protects “downstream players" from being thwarted by larger competitors using paid prioritization.
“At this point, what net neutrality and these regulations are dealing with is a recognition that the communications structure isn’t just about voice communications and regulating reasonable rights for that,” Mehra said. “This is really about the idea that the network has become a kind of infrastructure upon which other innovation takes place.”
The vote had little impact on the stock prices of the country's largest ISPs. Time Warner Cable fell 1.44 percent while Comcast dropped a 0.79 percent. Verizon and AT&T each posted gains of less than 1 percent.
The vote came after a year of jostling by cable and telecom companies and net neutrality advocates, which included web startups. It culminated in the FCC receiving a record-setting 4 million public comments and a call from Obama urging them to adopt the strongest rules possible.
The vote also starts a countdown to lawsuits expected from the industry, which contends regulations will burden their investments and stifle innovation, potentially hurting consumers. It's unclear if Comcast or Verizon will sue to stop the new regulations.
The FCC sought new net neutrality rules after a federal court rejected their previous version in January 2014. The ruling confirmed the agency's authority over broadband but said it had improperly regulated Internet providers as if they were similar to a public utility. That contradicted their official classification as "information services" providers, which are meant to be more lightly regulated.
The agency's new policy would reclassify broadband as more heavily regulated "telecommunications services," more like traditional telephone service.
