(Recasts throughout with additional details of FCC proposal)
By Alina Selyukh
NEW YORK, April 24 The U.S. communications
regulator on Thursday sought to tame an outcry over its plan to
allow "fast lanes" for some content on the Internet, insisting
that the agency will monitor and punish broadband providers that
treat Web traffic "unreasonably."
The Federal Communications Commission is weighing rules that
would ban Internet providers from blocking access to websites or
applications, but would allow content companies to pay for
faster Internet speeds delivering their traffic as long as such
deals are deemed "commercially reasonable."
Consumer advocates assailed the proposal from FCC Chairman
Tom Wheeler, saying it would let certain content providers pay
for access to fast lanes and discourage consumers from going to
competitors' sites where videos or other content may load more
slowly by comparison.
The five-member FCC will negotiate the rules before they
vote on May 15 to formally propose them and seek public comment.
"This move is likely to favor the companies with the deepest
pockets and hurt the scrappy start-ups," Delara Derakhshani,
policy counsel for Consumers Union, said in a statement.
The debate is over the principle known as open Internet or
net neutrality, which establishes that owners of networks that
deliver online content should treat all of that content equally.
"There are reports that the FCC is gutting the Open Internet
rule. They are flat-out wrong," Wheeler said in a statement late
on Wednesday. In a blog post on Thursday, he said the rules,
which he intends to finalize by year-end, would not change the
FCC's "underlying goals of transparency" or harm consumers.
The FCC for years has struggled to set rules that would
prohibit Internet providers from restricting how consumers surf
the Web but would also withstand legal challenges from broadband
providers who have said they, as owners of the networks, should
be able to manage them or charge for their use without what they
see as regulatory overreach.
In January, U.S. Court of Appeals for the District of
Columbia Circuit for the second time struck down the FCC's
previous anti-discrimination and anti-blocking rules after a
challenge from Verizon Communications Inc. But the judges
did affirm the agency's authority to regulate broadband, giving
the FCC new legal opportunity to rewrite the rules.
It was the court's direction that guided Wheeler's proposal
to allow commercially reasonable preferential treatment of
traffic, senior FCC officials said on Thursday.
The agency will seek public comment before determining how
to define "commercially unreasonable" behavior or a violation of
"net neutrality," but it will focus on whether broadband
companies' treatment of traffic hurts competitors or consumers,
hurts free speech or is done in good faith, the officials said.
The FCC would have the authority to go after companies that
violate the commercially reasonable standard on a case-by-case
basis. The review would be prompted by formal or informal
complaints as well as the FCC's own monitoring of how broadband
providers treat online traffic, the officials said.
One of the ideas the FCC is considering would be to have a
commission ombudsperson to monitor the industry with consumers
and content providers in mind, one FCC official said.
In striking down the FCC's old rules, the court said the
agency had improperly treated Internet service providers as
regulated public utilities providing telecommunications
services, like telephone companies, while they were actually
classified as information service providers.
Consumer advocates have called on the FCC to reclassify
Internet providers as more heavily regulated telecommunications
services, an idea that has faced tremendous pushback from the
broadband industry and Republican lawmakers who have urged the
FCC to tread lightly.
Virtually all large Internet providers, such as Verizon,
AT&T Inc and Time Warner Cable Inc, pledged after
January's ruling to continue abiding by the principles of open
Internet and have not weighed in since then.
The fees that content providers pay for faster access to
their sites or applications recently grabbed the spotlight after
video streaming service Netflix Inc struck a deal known
as an interconnection agreement with cable provider Comcast Corp
However, such deals are struck on the back end of the
network that gets content from a server to the broadband network
and so are outside of the scope of the FCC's net neutrality
rules. The rules have only applied to deals related to traffic
going over the "last mile" of broadband networks, where content
moves directly to the user.
(Reporting by Alina Selyukh,; Editing by Doina Chiacu, Richard
Chang and Tom Brown)