President Barack Obama's strong endorsement of tough new rules regulating US internet service providers sets the stage for a fierce ideological fight that will play out in federal court and Congress in the coming months.
Obama's plan, which calls for a strict approach to net neutrality, the principle that Internet service providers (ISPs) should treat all data equally, was greeted with relief and elation from Open Internet advocates, and anger and threats from powerful Republican lawmakers and the nation's largest cable and phone companies.
Obama's proposal, made less than a week after a bitter midterm election in which his fellow Democrats were battered at the polls across the country, intensifies an already contentious debate over the best way for the Federal Communications Commission to regulate powerful ISPs like Comcast, Verizon, and AT&T.
For Obama, an unpopular president entering the lame duck period of his second term, the proposal represents a clear attempt to make good on a key campaign promise from his first campaign—that he would "take a back seat to no one" in his defense of net neutrality.
In a White House video and accompanying statement, Obama urged the FCC to reclassify ISPs under the "common carrier" provisions of Title II of the Communications Act of 1934. Net neutrality advocates argue that such a move would allow the FCC to ensure that ISPs don't meddle with the internet's open, freewheeling nature.
"The time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do," Obama declared.
The strength and clarity of Obama's statement was highly unusual and caught many observers by surprise, because presidents usually don't take strong public positions on the work of FCC, an independent agency, when it comes to crafting regulatory policy. But the president left little doubt about the path he hopes the FCC pursues.
"Today's announcement was historic," said Stanford Law Professor Barbara van Schewick, one of the nation's leading experts on net neutrality. "President Obama has called upon the FCC to pursue the right legal path to keep the Internet free and open—reclassification of Internet service under Title II of the Communications Act, coupled with strong, bright line net neutrality rules."
Importantly, Obama called for the FCC to use its "forbearance" authority to refrain from applying certain aspects of Title II authority to regulate the ISPs. This means that the FCC would take a light-touch approach to Title II and avoid rate regulation and other aspects of this authority that have particularly incensed net neutrality opponents.
Powerful ISPs and their allies in Congress say Title II reclassification would stifle much-needed investment in US internet infrastructure and harm their businesses. Wall Street investors seemed to agree Monday, seeing battered cable company stocks. Comcast, Time Warner Cable, Cablevision, and Charter suffered steep stock price declines.
"This would be a radical reversal that would harm investment and innovation, as today's immediate stock market reaction demonstrates," David L. Cohen, Executive Vice President, Comcast Corporation, said in a company statement. "And such a radical reversal of consistent contrary precedent should be taken up by the Congress."
The FCC is an independent agency. Its commissioners are nominated by the president and confirmed by the Senate. Obama cannot direct the agency to pursue one path or another. But the president's unambiguous endorsement of Title II reclassification puts immense pressure on FCC chairman Tom Wheeler—an Obama loyalist who raised hundreds of thousands of dollars for the president's campaigns—to take a tough approach to ISP oversight.
Earlier this year, Wheeler proposed new rules that would stop short of reclassification and instead rely on the agency's existing authority under Section 706 of Telecommunications Act of 1996. This prompted howls of protest from Title II advocates, and a record-breaking four million public comments, most of them urging reclassification.
Recently, Wheeler has been trying to forge a compromise approach, one that involves relying on authority from both Section 706 and Title II for different parts of the internet's infrastructure. But that proposal was panned by both net neutrality supporters and industry giants alike. FCC officials seem to have realized that virtually any approach they take is bound to wind up in federal court.
Verizon, the nation's largest wireless provider, issued a statement saying that Title II reclassification "would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation. That course will likely also face strong legal challenges and would likely not stand up in court."
Congressional Republicans, newly emboldened by sweeping victories in last week's midterm election, might also try to pass legislation preventing the FCC from reclassification. In a sign of the impending showdown in Congress, several top GOP lawmakers reacted with anger on Monday to Obama's proposal.
"'Net Neutrality' is Obamacare for the Internet," Sen. Ted Cruz, the Texas Republican and possible GOP presidential candidate, wrote in a Twitter post. "The Internet should not operate at the speed of government." It's unclear what Cruz meant by that statement, but several top tech policy journalists ridiculed his post as political posturing and pandering.
House Speaker John Boehner, the Ohio Republican, issued a statement saying that Obama's approach "is a textbook example of the kind of Washington regulations that destroy innovation and entrepreneurship." He added that in the new Congress, "Republicans will continue our efforts to stop this misguided scheme to regulate the Internet."
Public interest groups and free speech advocates, meanwhile, hailed Obama's statement as a key step toward his campaign pledge and a strong affirmation of internet freedom.
Laura W. Murphy, director of the American Civil Liberties Union Washington Legislative Office, called Obama a "free speech champion" and said that the president deserves "an enormous amount of credit for unequivocally calling on the FCC to adopt rules that will finally allow the agency to protect the free and open internet."
His plan sends a strong signal to the agency, and is an attempt to make good on a campaign promise he made more than six years ago
Net neutrality is a regulatory puzzle that has sharply divided politicians, companies, and interest groups. Advocates call it a critical free speech policy that's necessary to preserve the internet economy. Opponents call it government overreach and a "solution in search of a problem." But for the FCC officials and ISP corporate lawyers that will inevitably have to litigate the issue in federal court, what matters most are the legal merits of the FCC's new rules.
President Obama's statement on Monday was a strong and unambiguous declaration of principles firmly supporting strict net neutrality protections. Although Obama can't direct the policy choices made by FCC chief Tom Wheeler and his colleagues, his plan sends a strong signal to the agency, and is clearly an attempt to make good on a campaign promise he made more than six years ago.
Now, Wheeler and his four colleagues at the FCC will have to decide about the path forward. One thing is certain: Whatever policy they choose will face legal action from the ISPs, and possibly hostile legislation from a newly emboldened GOP-controlled Congress. That means that, in all likelihood, the question of net neutrality, which has bedeviled federal policy makers for nearly a decade, is not going to be resolved anytime soon.