Net Neutrality: FCC Approves Regulation of Internet Providers

WASHINGTON, Dec. 21, 2010— -- A narrowly divided Federal Communications Commission today approved bold new rules aimed at preventing broadband service providers from censoring how individuals and organizations can surf the Internet's fastest pipes.

The so-called "net neutrality" regulations prohibit the suppliers of Internet connections to millions of American homes and offices from blocking access to certain websites, applications or services so long as they are legal.

Companies will also be required to publicly disclose information on their practices, performance characteristics and commercial ties.

"Today, for the first time, we are adopting rules to preserve basic Internet values," said FCC chairman Julius Genachowski. "For the first time, we'll have enforceable rules of the road to preserve Internet freedom and openness."

But the rules do allow Internet providers to engage in "reasonable network management," meaning they can take steps to regulate traffic and congestion over their connections.

Critics warn those steps could include implementation of useage-based pricing for accessing the Internet at home and preferential treatment for companies that pay extra for "fast-lanes." They say service providers could also begin to pick and choose which websites can run faster than others over their networks.

The rules focus on wired broadband connections offered by providers like Time Warner Cable and Comcast. They largely don't apply to mobile Internet networks provided by wireless carriers and accessed on smartphones.

"They haven't put the protections in place that would prohibit an AT&T or a Verizon from discriminating, from picking and choosing, which sites and services are going to work better and which aren't," said Craig Aaron, managing director of Free Press, a nonpartisan advocacy group. "It changes the nature of the Internet so consumers aren't in control of that online experience and it locks in the dominant position of the providers."

For example, Aaron said, mobile Internet providers won't be allowed to block access to Skype -- a popular Internet phone service -- from your iPhone, Android or Blackberry. But they could significantly slow down bandwidth to the program or charge more for people who use it.

"We are concerned that if these companies are allowed to block the applications consumers can access over their iPhones or BlackBerry devices, there's nothing to keep them from censoring political speech," said Bob Edgar, president of Common Cause. "The commission should look to ensure that net neutrality is fully extended to the wireless world."

Net Neutrality Vote Split on Party Lines

President Obama, who vowed during the 2008 campaign that he would "take a backseat to no one in my commitment to network neutrality," hailed the FCC's decision Tuesday.

The new rules will "help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and defending free speech," Obama said in a statement. "This decision is an important component of our overall strategy to advance American innovation, economic growth, and job creation."

The FCC vote followed months of lobbying by the most powerful media and communications companies in the world and by Genachowski's opponents on the political right, who have called the measures an alarming government intrusion into private industry.

"Every time the government has examined the broadband market ... it concludes the broadband market is competitive and that we should be wary of new rules," said Commissioner Robert McDowell, a Republican, who opposed the plan.

"Preserving the open Internet is non-negotiable. It is open today," said Meredith Attwell Baker, the other Republican commissioner on the panel. "Government action is not needed to preserve it. This decision is being made because we want to, not because we need to."

The plan had also been derided from the left for being too watered down, amounting to a giveaway to corporations. But both of Genachowski's Democratic colleagues on the five-member FCC supported the plan, despite reservations.

Commissioner Michael Copps, a Democrat, said the new rules "could represent an important milestone in the ongoing struggle to safeguard the awesome opportunity-creating power of the open Internet."

One quirk of the FCC is that the agency does not release to the public exactly what is being brought to a vote. The full text of the new rule won't be available to the public for several more days.

But Genachowski outlined his principles in a speech earlier this month, declaring the coming rule "an important milestone in our effort to protect Internet freedom and openness."

"The FCC is moving the ball forward," said Consumers Union policy counsel, Parul P. Desai, said in a statement.

ABC News' Brian Hartman contributed to this report.