Questions and answers about Obama's open Internet plan

UPDATE: Since President Obama's speech in November, FCC Chairman Tom Wheeler has also come out in favor of tough Net neutrality rules.

In his pronouncement on the open Internet Monday, President Obama called for the most stringent option among rules being contemplated – treating Internet providers like public utilities such as electricity companies and subjecting them to tight regulations.

The Federal Communications Commission has been recasting net neutrality rules because the previous set was tossed by a federal court in January. Tom Wheeler, the agency's chairman, has given signals that he favors options less stringent than Obama's recommendations.

Here are some questions to consider as Wheeler's juggling act continues.

Q: President Obama is in favor of regulating the Internet as a public utility to ensure net neutrality? What does that mean exactly, and what's in it for consumers?

A: Consumer activists who are most fervently for net neutrality favor this approach primarily because it gives the Federal Communications Commission broad enforcement powers to ensure that all Internet traffic is treated equally. Public utilities, such as water, sewer service and electricity providers, are regulated a lot more tightly than broadband services are.

Internet service providers such as Comcast, AT&T and Verizon have fought vigorously against the idea of using Title II of the Communications Act of 1934 to regulate their businesses.

Net neutrality proponents say Title II is the best, most tightly woven regulatory blanket to ensure ISPs behave in the true spirit of net neutrality. "The FCC would have much greater authority to address consumers' problems under Title II," says John Bergmayer, senior staff attorney at consumer technology advocacy group Public Knowledge. "It's a source of authority that the FCC can draw on for many broadband problems."

It would have the most solid legal grounds to ban "paid prioritization" deals, ones in which ISPs get payments to offer "fast-lane" Internet connections to deep-pocketed content providers that can afford them while others get to deal with slower speeds.

"They have to be standing on legal authority," says Susan Crawford, a visiting professor in intellectual property at Harvard Law School.

Q: Why do net providers vigorously oppose this?

A: Such a move is a nightmare scenario for ISPs because Title II, which has more than 100 pages of text outlining dos and don'ts, would give the FCC immense regulatory power that opponents say could stifle innovation and prevent further investment.

Among the potential pitfalls, opponents say, are allowing the FCC to dictate pricing that ISPs charge consumers and content providers; obligating ISPs to open their back-end networks to content providers and third-party content delivery companies; requiring ISPs to sell portions of their networks to resellers; and requiring them to regularly file reams of documents and report cards on their quality of service and pricing structures.

"The law is obsolete," says Scott Cleland, a tech consultant and chairman of NetCompetition, an online broadband forum.

Obama said he's not after such strict interpretation of Title II. He wants to apply Title II but wants regulators to "forbear" – or refrain — from "rate regulation and other provisions less relevant to broadband services."

Q: Will the FCC go along with President Obama's recommendations?

There are mixed signals about this. FCC spokeswoman Kim Hart says, "All options remain on the table."

Obama's recommendations come at an awkward time for the FCC, which has been looking at "hybrid" options that could appease – or upset – all parties.

The FCC is an independent agency and its commissioners – who were nominated by Obama – can decide on their own what they think is the best course. In late October, Wheeler tipped his hand on his thinking. "People familiar with" his plan told The Wall Street Journal that he wants to take a dual-pronged approach: a more stringent set of broadband-as-utility rules for Internet connections between ISPs and content providers and less heavy-handed rules for ISPs' connection to end-users.

"We think there is more than one way to do it," says Nuala O'Connor, president of the Center for Democracy and Technology. "Title II is arguably heavy-handed."

Officials at the FCC were mulling over legal implications of these options when Obama made his announcement. The FCC says its lawyers would have an easier time defending this hybrid approach in court – and any result will probably result in legal challenges – than an outright reclassification of ISPs as public utilities.

This year, Wheeler triggered the ire of net neutrality activists when he said he's willing to hear public comments on the possibility of allowing ISPs to strike some fast-lane deals with content providers. Wheeler's hybrid approach would be a means to allow such fast-lane deals as long as the FCC can be assured that they are "commercially reasonable" on a case-by-case basis.

If the FCC adopts this case-by-case approach, the issue of who has the burden of proof on whether a fast-lane deal is valid has to be settled, says Hal Singer, senior fellow at the Progressive Policy Institute think-tank.

Q: Why should consumers care about the arguments for and against paid prioritization?

The option that net neutrality proponents advocate – an outright ban on fast lanes – would embrace the spirit of the open Internet in its most unadulterated form. It would theoretically mean ISPs wouldn't be able to throttle, or deliberately slow down, Netflix movie streams even if they are hogging bandwidth and Netflix refuses to pay extra for faster for connections, as it does now.

The let's-find-a-compromise crowd, to which Wheeler seems to belong and whose argument is gaining momentum, maintain that some prioritized fast lanes are in the public interest. Dallas Mavericks owner and tech investor Mark Cuban responded via Twitter to a tweet calling for all Net traffic to be treated equally: "You wouldn't think that if the 4K (ultra-high definition) video of your surgery that a consulting doctor is watching starts to buffer."

And of course, ISPs would argue that any regulations on paid prioritization are unnecessary since market forces will work themselves out.