In net neutrality victory, FCC classifies broadband Internet service as a public utility

WASHINGTON - The Federal Communications Commission voted Thursday to regulate broadband Internet service as a public utility, a milestone in regulating high-speed Internet service into U.S. homes.

The new rules, approved 3-2 along party lines, are intended to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else. Those prohibitions are hallmarks of the net neutrality concept.

Mobile data service for smartphones and tablets is being placed under the new rules. The order also includes provisions to protect consumer privacy and to ensure Internet service is available for people with disabilities and in remote areas.

Alberto Ibargüen, president of the Miami-based John S. and James L. Knight Foundation, which supports digital journalism initiatives, applauded the outcome.

"We believe the free flow of reliable information is essential for self-government, so we’re heartened by the FCC decision. The devil’s in the details, of course, but the direction toward an open internet is sound," said Ibargüen.

The FCC is taking this regulatory step by reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. The Title II classification comes from the phone company era, treating service as a public utility.

But the new rules are an à la carte version of Title II, adopting some provisions and shunning others. The FCC will get involved in pricing decisions or the engineering decisions companies make in managing their networks.

Opponents of the new rules, led by cable television and telecommunications companies, say adopting the Title II approach opens the door to regulatory meddling in the future and will deter investment and ultimately harm consumers. They plan to challenge the FCC order in court.

Supporters of the Title II model include the major Internet companies, public interest groups and startups including Miami’s Senzari, a music recommendation data company.

"As a Big Data startup, net neutrality is critical to our survival. We depend on the Internet for everything we do,” said Demian Bellumio, COO of Senzari, a music recommendation big data company in Miami. “From how we communicate with our clients, to how we move data across our servers for constant analysis, Internet bandwidth is the glue that connects everything we do. If we are forced to do things slower or more expensively, our entire business could be jeopardized, especially when competing with the deep-pocketed players that can afford to pay to play.

“A transparent and fair Internet is good for all startups, for innovation, for our local tech community and for our country’s ability to remain competitive against the rest of the world," said Bellumio.

The FCC’s yearlong path to issuing net rules to ensure an open Internet precipitated an extraordinary level of political involvement for a regulatory ruling from grass-roots populism to the White House. The FCC received more than 4 million comments, about a quarter of them generated through a campaign organized by Fight for the Future, a nonprofit advocacy group. The overwhelming majority of the comments supported common-carrier style rules, like those in the order the commission approved Thursday.

In November, President Barack Obama cited the flood of comments when he took the unusual step of urging the FCC, an independent agency by law, to adopt the “strongest possible rules” on net neutrality.

Obama specifically called on the commission to classify high-speed broadband service as a utility under Title II. His rationale: “For most Americans, the Internet has become an essential part of everyday communication and everyday life.”

And fully securing open access will take more work, cautioned the Knight Foundation’s Ibarguen. "The debate about net neutrality and commerce should not obscure the other central question: Do we have a digital public square that is accessible and open to all, or do we have a digital public square to which citizens are able to participate depending on their wealth? In other words, do we believe in equality or do we believe in a digital version of 'separate but equal' that we, as a country, left behind decades ago?" he said.

Republicans in Congress were slow to react and initially misread the public mood. Sen. Ted Cruz of Texas portrayed the FCC rule-making process as a heavy-handed liberal initiative, “Obamacare for the Internet.”

In January, Sen. John Thune, R-S.D., began circulating legislation that embraced the principles of net neutrality, banning paid-for priority lanes and blocking or throttling any Web content. But it would also prohibit the FCC from issuing regulations to achieve those goals. This week, the Republicans pulled back with too little support to move quickly.

At the Thursday meeting, the FCC also approved an order to pre-empt state laws that limit the build-out of municipal broadband Internet services. The order focuses on laws in two states, North Carolina and Tennessee, but it would create a policy framework for other states. About 21 states, by the FCC’s count, have laws that restrict the activities of community broadband services.

The state laws unfairly restrict competition to cable and telecommunications broadband providers from municipal initiatives, the FCC said. This order, too, will surely be challenged in court.

Miami Herald Staff Writer Nancy Dahlberg contributed to this report.