- The Washington Times - Monday, November 10, 2014

President Obama on Monday endorsed an aggressive federal role in setting traffic rules for the Internet, sparking sharp criticism from congressional Republicans and leading telecommunications firms that his embrace of “net neutrality” will stifle innovation and investment to improve the Web.

But Internet activists hailed the president’s move, arguing it will preserve the Web’s democratic spirit and prevent Internet providers from creating a class system favoring deep-pocketed users who can afford to pay for faster service.

The president’s move also sparked one of the first partisan policy clashes since the GOP domination of last week’s midterm elections, with Sen. Ted Cruz of Texas calling Mr. Obama’s proposal “Obamacare for the Internet.”

“It puts the government in charge of determining Internet pricing, terms of service and what types of products and services can be delivered, leading to fewer choices, fewer opportunities and higher prices for consumers,” Mr. Cruz said. “The Internet should not operate at the speed of government.”

Mr. Cruz was joined by House Majority Leader John A. Boehner and Senate Republican leader Mitch McConnell in slamming Mr. Obama’s stance, while a top official for AT&T said the Obama administration could expect a lawsuit from the leading Internet service providers if the Federal Communications Commission adopts the president’s recommendation.

In his statement, Mr. Obama said the FCC should treat broadband Internet as a public utility, which would mean, among other things, that service providers such as Verizon and Comcast have to provide the same level of access on such matters as data speed to all content providers.

“It is common sense that the same philosophy should guide any service that is based on the transmission of information — whether a phone call or a packet of data,” he said.

Michael Powell, president and CEO of the National Cable & Telecommunications Association, the primary lobbying arm of the cable industry, said Mr. Obama’s statement would constitute a “tectonic shift in national policy” that could have “devastating results.”

The decision on how to address the situation lies with the FCC, an independent agency that regulates the nation’s airwaves, radio waves and Internet. The FCC has been debating how best to address the issue of net neutrality since its previous attempt to regulate telecom companies was overturned in court earlier this year.

Though the president’s statement does little to address the legal and economic intricacies of the case, it draws attention to the issue when Democrats are trying to find a rallying cry following Election Day’s heavy losses to the GOP.

Internet companies that live or die on people’s access to the service — like Google and Amazon.com — have also started lining up in supporting net neutrality.

Many liberal organizations lauded the president’s statement, saying it will help garner support for net neutrality regulation that would police telecom companies that, liberal and free speech groups fear, could try to censor or block access to some websites.

“Today, President Obama is a free speech champion,” said Laura Murphy, director of the Washington Legislative Office for the American Civil Liberties Union.

“Preventing ‘fast lanes’ and discrimination against some content producers on the Internet is one of the most important free speech issues of the digital age,” she said. “Large broadband providers should not be allowed to slow or block content from their competitors or because the content may be controversial.”

“Net neutrality” is the name given to a brewing fight over how people will use and pay for Internet in the future.

By providing access to certain speeds and websites, users could pay for the level they want, and telecommunication companies such as AT&T and Comcast could offer premium services of higher Internet speeds to those who can afford to pay. In addition, the companies could charge extra to sites that take up a disproportionate share of the Internet bandwidth, like Netflix.

The revenue is needed to pay for continued upgrades to broadband Internet service as files get bigger and better, and more people worldwide use it.

But opponents say the move could destroy the free flow of information that has become a hallmark of the Internet. If allowed strict control of the World Wide Web, telecommunications providers could deliberately slow service for certain groups of people, or potentially stop service altogether to some websites for any reason they choose, thereby eliciting cries of censorship from free speech advocates.

One of the nation’s largest Internet providers, Verizon, called the president’s plan a move that could “threaten great harm to open Internet.”

“Verizon supports the open Internet, and we continue to believe that the light-touch regulatory approach in place for the past two decades has been central to the Internet’s success,” the company said in a press release.

Investors took Mr. Obama’s statement as bad news for the major Internet service providers, sending some of the major telecommunications stocks tumbling following his announcement. On a day when the S&P 500 index posted a small gain, Time Warner Cable Inc. fell $7.10, or 4.9 percent, to $136.50, Comcast Corp. lost $2.20 (4 percent) to $52.95, and Charter Communications Inc. lost $9.75, or 6.2 percent, to $146.62.

The issue is likely to remain on investors’ minds as Comcast pursues the acquisition of fellow communications giant Time Warner Cable.

Mr. Obama and net neutrality supporters are pushing for a reclassification of the Internet under Title II of the 1934 Communications Act.

Instead of placing the Internet in the largely unregulated “information” category, where it has been, the move would instead consider it to be a telecommunication service, an area where the government has much more leeway to regulate pricing practices among businesses.

Congress, meanwhile, split down the aisle in picking sides.

“The Internet cannot belong to the wealthy and well-connected,” said House Minority Leader Nancy Pelosi, California Democrat.

“It must be an open space for innovation, entrepreneurship and communication — a level playing field where success is founded on the best ideas, not the deepest pockets,” Mrs. Pelosi said.

But Mr. McConnell said a hands-off approach to Internet regulation has allowed innovation and job creation.

“The growth of the Internet and the rapid adoption of mobile technology have been great American success stories, made possible by a light regulatory touch,” the Kentucky Republican said. “The president’s decision today to abandon this successful approach in favor of more heavy-handed regulation that will stifle innovation and concentrate more power in the hands of Washington bureaucrats is a terrible idea.”

In his statement, Mr. Obama argued that protections for consumers don’t have to come at the expense of the companies.

“An open Internet is essential to the American economy and, increasingly, to our very way of life,” Mr. Obama said in a statement released by the White House.

“By lowering the cost of launching a new idea, igniting new political movements and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known,” he said.

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