FCC to Propose New ‘Net Neutrality’ Rules

Proposal Would Allow Broadband Providers to Give Preferential Treatment to Some Traffic.

Regulators are proposing new rules on Internet traffic that would allow broadband providers to charge companies a premium for access to their fastest lanes.

The Federal Communications Commission plans to put forth its rules on Thursday. The proposal marks the FCC’s third attempt at enforcing “net neutrality”—the concept that all Internet traffic should be treated equally.

Developed by FCC Chairman Tom Wheeler, the proposal is an effort to prevent broadband Internet providers such as Comcast Corp. CMCSA, Verizon Communications Inc., VZ and Time Warner Cable TWC from blocking or slowing down individual websites served up to the consumer. The idea is that consumers should be able to access whatever content they choose, not the content chosen by the broadband provider.

But it would also allow providers to give preferential treatment to traffic from some content providers, as long as such arrangements are available on “commercially reasonable” terms for all interested content companies. Whether the terms are commercially reasonable would be decided by the FCC on a case-by-case basis.

This latest plan is likely to be viewed as an effort to find a middle ground, as the FCC has been caught between its promise to keep the Internet open and broadband providers’ desire to explore new business models in a fast-changing marketplace. It likely won’t satisfy everyone, however. Some advocates of an open Internet argue that preferential treatment for some content companies inevitably will result in discriminatory treatment for others.

The proposal would open the door to new products from companies such as Apple Inc., AAPL which has explored the idea of offering a video service that would rely on a dedicated portion of the broadband pipe. Like the FCC’s previous open Internet rules, the proposal wouldn’t apply to wireless carriers, which aren’t governed by any net-neutrality rules.

The FCC will circulate the proposal on Thursday ahead of a vote to move forward with the proposal at its May 15 meeting. Moving forward would represent a milestone in the long fight over rules governing how service providers treat different kinds of content.

Net neutrality was a key part of President Barack Obama’s campaign platform in 2008. The U.S. Court of Appeals, District of Columbia Circuit threw out the FCC’s last two attempts to implement an open Internet rule after challenges from broadband providers.

On a consumer level, the plan would probably not affect users’ Internet experience immediately but over the long term it could spawn new products that use broadband connections in a variety of ways for home and business communications—for an additional fee.

If the rule is adopted, winners would be the major broadband providers that would be able to charge both consumers and content providers for access to their networks. Companies like Google Inc. or Netflix Inc.

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