UPDATE 3-U.S. regulators to propose new net neutrality rules in May

Wed Apr 23, 2014 4:46pm EDT

(Adds order will not address interconnection deals, details of court ruling)

By Alina Selyukh

WASHINGTON, April 23 (Reuters) - U.S. regulators are expected to vote on May 15 on a new set of so-called "net neutrality" rules aimed at making certain that broadband providers do not slow down or block consumers' access to legal Internet content.

Federal Communications Commission Chairman Tom Wheeler on Wednesday said he plans to circulate his proposed rules among other commissioners on Thursday, teeing them up for a vote at the FCC's May 15 meeting. The draft rules will then be formally proposed and available for public comment.

The rules are expected to ensure that network operators disclose exactly how they manage Internet traffic and do not restrict consumers as they surf the Web. Wheeler has also said he planned to take a case-by-case approach to reviewing the practices adopted by Internet providers.

However, the rules are not expected to address the issue of interconnection, or agreements in which content companies pay network providers for faster access to their sites or services.

That issue was recently brought into the spotlight by a tussle between video streaming service Netflix Inc and cable company Comcast Corp.

Wheeler in the past has reaffirmed that net neutrality rules would not regulate deals between businesses on connections before they reach the user as the scope of the rules is limited to the last leg of the network that reaches the consumer.

Virtually all large Internet service providers, such as Verizon Communications Inc and Time Warner Cable Inc , have pledged to abide by the principles of open Internet reinforced by these rules.

But critics have raised concerns that, without a formal rule, the voluntary pledges could be pulled back over time and also leave the door open for deals that would give unequal treatment to websites or services.

The U.S. Court of Appeals for the District of Columbia Circuit in January for the second time struck down the FCC's previous version of the open Internet order.

However, the court did affirm that the FCC had authority to regulate broadband, giving the agency new legal opportunity to bring back non-discrimination and no-blocking regulations for Internet service providers.

Comcast, through conditions placed on its 2011 merger with NBC Universal, is the only Internet provider still bound by the earlier FCC net neutrality rules through 2018.

Comcast has now proposed to buy its biggest rival Time Warner Cable Inc and Netflix has come out in opposition of the $45.2 billion merger, arguing that the Internet provider should be banned from charging fees for delivering its content.

Comcast has said that Netflix's opposition was "based on inaccurate claims and arguments."

Netflix, which accounts for much of Internet traffic during peak hours, in February struck a deal to pay Comcast for faster online delivery of its movies and TV shows.

Some companies pay Internet service providers or other firms that serve as intermediaries to better deliver traffic to users. (Reporting by Alina Selyukh; Editing by Ros Krasny, Jonathan Oatis and Lisa Shumaker)

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