Open-Internet Rules Opposed by AT&T, Comcast Released by FCC

The Federal Communications Commission released the net-neutrality regulations it adopted last month on a party-line vote, as Republican lawmakers critical of the decision prepared to question the agency at hearings next week.

In 400 pages posted on its website, the FCC cited online innovation since earlier Web traffic rules were adopted in 2010. It listed streaming video initiatives by Dish Network Corp., CBS Corp. and Time Warner Inc.’s HBO, and Inc.’s winning two Golden Globe awards for its online series “Transparent.”

“The lesson of this period, and the overwhelming consensus on the record, is that carefully tailored rules to protect Internet openness will allow investment and innovation to continue to flourish,” the agency said.

The agency’s rules that bar Internet service providers from interfering with Web traffic have been decried by cable and telephone companies as needlessly intrusive, and welcomed by Democrats and Internet companies as protecting online content from being blocked or slowed. The FCC wrote the new rules after a U.S. court last year voided the earlier version, saying the agency lacked legal authority.

Pai Objects

Republican Commissioner Ajit Pai, in a dissent, said the FCC was replacing Internet freedom with government control. “It seizes unilateral authority to regulate Internet conduct,” Pai said.

Since the Feb. 26 vote, the text has undergone final edits to respond to the dissents of the two Republicans on the five-member agency led by Chairman Tom Wheeler, a Democrat. Wheeler said in his statement the rules preserve incentives for private investment while ensuring networks “are fast, fair, and open for all Americans.”

Next steps include publication in the Federal Register, which sets the stage for expected lawsuits by companies that say the regulations are an unfair restriction that could lead to rate regulation.

The rules prohibit fixed and wireless Internet service providers led by AT&T Inc., Verizon Communications Inc. and Comcast Corp. from interfering with online traffic, or offering faster service in return for payment.

Editing the document after the FCC’s vote makes sure the agency addresses opposing views as courts have demanded, Jonathan Sallet, the agency’s general counsel, said in a March 2 blog post.

‘Unnecessarily Opaque’

The procedure is “unnecessarily opaque,” Michael O’Rielly, an FCC Republican commissioner, said in a March 9 blog post.

FCC commissioners are to testify next week in the Republican-led Congress on the Internet regulations.

Hearings have been called by Representative Greg Walden, an Oregon Republican who has said the FCC action is “a mistake” that will depress investment, and Senator John Thune, a South Dakota Republican who has said the rules will discourage innovation.

President Barack Obama welcomed the rules, saying they will protect innovation and “create a level playing field for the next generation of entrepreneurs.”

Before it's here, it's on the Bloomberg Terminal.