FCC Approves Net Neutrality Rules

Personal Finance
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FCC net neutrality

The Federal Communications Commission on Thursday approved what was hailed as a historic new set of rules for the Internet designed to ensure equal and open access for all.

The 3-2 vote in favor of  “net neutrality” gives the commission the ability to police Web access as a public utility, as it has done historically for services like radio, telephone and cable.

Under the rules, the service providers who control access to the Web may not ban legal content, block legal traffic or create “fast lanes” that provide faster traffic to some websites than others.

“The American people reasonably expect and deserve an Internet that is fast, fair and open,” commission Chairman Tom Wheeler said. “Today, they get what they deserve: strong, enforceable rules that will ensure the Internet remains open, now and in the future.”

The vote was along party lines, with Wheeler and two fellow Democrats voting in favor of the rules and the commission’s two Republican members voting against.

The rules are almost certain to be challenged in court, where their fate would be unclear. A more limited set of net-neutrality rules that the commission had approved previously was thrown out by a federal appeals court last year.

“The courts will ultimately decide this order’s fate,” said Commissioner Ajit Pai, a Republican. “Litigants are already lawyering up.”

Some of those litigants may be major cable and telecom companies — like Comcast, Verizon, Time Warner Cable, AT&T and Charter — which also act as Internet service providers and which spent millions of dollars lobbying against the new FCC rules.

Opponents argued that there is no need for the commission to oversee a free Internet and that service providers have the right to offer faster service for higher pay if they want to in a free economy.

Pai argued that government oversight of the Web could lead to higher prices, slower speeds, less innovation and few options for consumers. He and others also have said that making Internet service a utility could lead to a whole host of new state and federal taxes and fees, although the rules state that they are not intended to “impose, suggest or authorize any new taxes or fees.”

In his State of the Union address, President Barack Obama called for a “free and open Internet.” Last year, he recommended strong net neutrality rules to the FCC that included classifying Web access as a utility.

The rules will apply equally to use of the mobile Web.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter @doug_gross and on Google+.


Image via iStock.