Obama's net neutrality push cheers some, riles others

President Obama's call for net neutrality could drive the Federal Communications Commission to regulate broadband service like a utility as a way to protect consumers' ability to access all content without a threat of connectivity being throttled.

The FCC is an independent agency that will establish its own rules. But Obama's public prodding could push the agency to adopt a new set of regulations that will allow greater oversight of Internet service providers.

Obama walked into the fray Monday, seeking more clarity on the hot-button issue. His unequivocal support for "net neutrality" – the notion that any and all content should be treated equally by Internet providers – could add fervor to a fight that has already gone on for years.

"We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas," Obama said in a statement released by the White House. "I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online."

Specifically, Obama called for prohibiting ISPs from blocking or deliberately slowing any legal content. His proposals also include a recommendation to mostly ban paid-for "fast-lane" access, in which a content provider refusing to pay extra would be subject to slower Internet transmission.

His support for the FCC to reclassify consumer broadband Internet service and regulate it as if it's a utility – like electricity and water – rallied many consumer advocacy groups that have asked for a similar strategy to protect unfettered access. The reclassification would give the FCC "much greater authority to address consumer problems," says John Bergmayer, an attorney at technology policy advocacy group Public Knowledge. "It's a source of authority that the FCC can draw on for many broadband problems."

"This is the critical infrastructure of our 21st century," said Michael Copps, a former FCC commissioner and special adviser to Common Cause. "This is how we communicate with each other. This is our news and our information, our journalism, our innovation and entrepreneurship. This really demonstrates that the president understands how important this issue is."

However, industry groups that represent ISPs criticized the plan. "Such a move would set the industry back decades, and threaten the private sector investment that is critically needed to ensure that the network can meet surging demand," the Telecommunications Industry Association in a statement.

Sen. Ted Cruz, R- Texas, compared the plan to Obamacare on Twitter, saying that "the Internet should not operate at the speed of government."

The FCC has been recasting new net neutrality rules because the previous set were tossed out by a federal court in January. The court agreed that the agency could regulate the Internet but first must enact rules that establish its authority. The agency got nearly 4 million responses during its public comment period on potential rules.

While the FCC had been expected to vote on new rules by the end of the year, that is unlikely. "The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," FCC Chairman Tom Wheeler said in a statement after the president's was made public.

Net neutrality supporters have criticized early drafts of the rules saying they could allow ISPs to create "fast lanes" that would cost consumers more. Meanwhile, ISPs have told the FCC that they would abide by open Internet rules, to not prioritize certain content, without such a utility-based regulatory approach.

"This would be a radical reversal that would harm investment and innovation, as today's immediate stock market reaction demonstrates," said Comcast Corp. executive vice president David Cohen in a statement.

Shares of ISPs fell Monday morning following the announcement. Comcast fell 3.75% to $53.07.

Cohen argued that Congress should be the body to enact new net neutrality rules. "The Internet has not just appeared by accident or gift – it has been built by companies like ours investing and building networks and infrastructure. The policy the White House is encouraging would jeopardize this engine for job creation and investment as well as the innovation cycle that the Internet has generated," he said.

During his initial campaign, the president promised to fight for an open Internet, in which free speech was protected and content flowed equally. Still, his public statement "is a dramatic move. It's unprecedented for the Oval Office to issue a statement so forcefully and clearly," said Richard Doherty of industry consulting firm The Envisioneering Group.

With the midterm elections behind him, Obama wants clarity on the agency's direction, he says. Still, Doherty expects any regulation to allow some market forces to work organically, allowing competition and prioritization for critical functions such as remote health care monitoring. "I think we will see what America is best at .. (a) competitive marketplace at work."