FCC chief tips hand on utility rules for Internet

Tom Wheeler all but confirmed on Wednesday that new federal regulations will treat the Internet like a public utility.

During a chat at the Consumer Electronics Show in Las Vegas, the Federal Communications Commission (FCC) chairman reportedly hinted that the new rules will take the controversial step to enact tough Internet regulations under Title II of the Communications Act, though he refrained from saying so explicitly.

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The model for new rules, Wheeler said, would be the wireless industry.

He added that there are several sections of the law that the agency might not apply if it did hand down utility-style rules for the Internet, to avoid restricting competition online.

“There are many parts of Title II that are inappropriate and would thwart investment, but a model has been set in the wireless business that has billions of dollars of investment” and is thriving in other ways, Wheeler said.

“We ought to take a look at how that fits together with ... making sure that we have open access,” he added. “You walk the floor [of the electronics trade show] and that’s the message that comes across to me.”

He also confirmed that the vote would be held on Feb. 26 and that his new rules would be circulated to the other four commissioners on Feb. 5.

The FCC has been working on new regulations for months, after a top appeals court tossed out the old rules last January.

Currently, the Internet is classified as an “information service” under the law, different than a “telecommunications service” such as traditional phone lines.

In November, President Obama called for the agency to change course and reclassify the Internet as a “telecommunications service” so that it could extend tough new rules to the Web, similar to those that it uses for public utilities.

The president’s call had a major impact at the FCC and may have helped to push Wheeler toward embracing reclassification more eagerly.

On Wednesday, however, he said there was no pressure from the president’s announcement.

“There was an effort to say Wheeler and the president are pulling at opposite directions on this, which made for good headlines but wasn’t exactly reality because we’re both pulling in the same direction, which is no blocking, no throttling of applications, no paid prioritization and transparency,” he said.

The anticipated move is sure to face backlash among Republicans on Capitol Hill and from major Internet service companies, who have said that the utility-style regulations would choke off growth on the Internet.

Congressional Republicans have already started work on legislation to pre-empt the agency from applying those tough rules for the Internet. 

Critics also fear that the integrity of the FCC could be at stake if it bends too much to Obama's will, since it is a legally independent agency.

“Looks like FCC's days as an ‘independent’ agency are numbered,” tweeted Matthew Berry, the chief of staff to Republican FCC Commissioner Ajit Pai. “White House issues YouTube! video; FCC leadership flip-flops.” 

Democrats, meanwhile, are already cheering the evolution. Last month, three-dozen Democratic lawmakers wrote the FCC urging it to reclassify the Internet “without delay.”

Sen. Ed Markey (D-Mass.), who helped spearhead the December letter, called reclassification “the best way to prevent the broadband behemoths from erecting online tollbooths and undermining the openness of the Internet,” in a statement shortly after Wheeler’s remarks on Wednesday. 

Sen. Ron Wyden (D-Ore.) added that he was "glad to hear" Wheeler is listening to "consumers, innovators" and businesses by embracing reclassification.

This story was updated at 6:35 p.m.