The president's statement is a massive blow to Comcast and other Internet providers who fear they will be regulated like utilities.
President Obama leapt directly into the net neutrality fight Monday, urging the Federal Communications Commission to claim expansive new powers over the Internet to enact the "strongest possible" regulations.
"'Net neutrality' has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted," Obama said in a video posted on the White House website. "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."
Under his plan, the FCC would classify broadband Internet as a "telecommunications service" under Title II of the Telecommunications Act, a provision the agency already uses to regulate telephone companies. His statement is a huge win for Internet activists, who have been warning the future of the Internet could be at stake unless the FCC invokes stronger authority to prevent abuses by Internet providers.
But broadband providers like Comcast and Verizon have been lobbying fiercely against applying the provision to the Internet, warning it would strangle their industry with utility-style regulations. Shares of major broadband providers sunk early Monday following the announcement. Verizon issued a statement saying it supports an "open Internet," but warned that Obama's plan would face "strong legal challenges."
It's also a confrontational move against congressional Republicans, who just won control of the Senate last week. They consider Title II an archaic provision designed for a time when a single monopoly controlled all telephone service. They warn that using the provision on the Internet would destory jobs and mean slower Internet for everyone. The new GOP Congress will be sure to try to repeal any net neutrality rules the FCC enacts.
Obama noted that the FCC is an independent agency and that the ultimate decision will be up to Chairman Tom Wheeler and the four other commissioners. But his statement puts tremendous pressure on the Democratic appointees to seize the controversial new powers.
Wheeler thanked Obama for his input Monday, but didn't explicitly say he would follow the president's directions. The various net neutrality proposals raise "substantive legal questions," Wheeler said, and he'll need more time to develop rules that can hold up in court. The FCC chief had previously said he wanted new rules on the books by the end of the year.
Under Obama's plan, the FCC ban Internet providers from blocking websites, throttling Internet service, or striking any deals for special Internet "fast lanes" for websites that pay more. The rules would apply equally to a home Internet connection and mobile devices.
He also said the FCC should consider apply regulations to the interconnection points on the backend of the Internet, which would help Netflix deliver large video files without having to pay Internet providers for the best access possible.
Title II would give the FCC a slew of new powers over the Internet, including the ability to control prices and determine which customers a company has to serve. Obama said the FCC should waive the rate regulation requirements and "other provisions less relevant to broadband services."
Net neutrality advocates argue that Title II is the only way to enact rules that can survive in court. The FCC first enacted net neutrality regulations in 2010, but a federal court struck them down earlier this year.
Wheeler proposed new rules in May that wouldn't use Title II and would allow for Internet "fast lanes" in some cases, but his proposal prompted a massive backlash and more 3.7 million people filed comments.