Obama wants more web regulation
Barack Obama has embraced a radical change in how the US government treats internet service, coming down on the side of consumer activists who fear slower download speeds and higher costs but angering US cable giants who say the plan would kill jobs.
The US president called on the Federal Communications Commission to more heavily regulate internet providers and treat broadband much as it would any other public utility.
He said the FCC should explicitly prohibit internet providers from charging data-heavy sites like Netflix extra to move their content more quickly. The announcement sent cable stocks tumbling.
The FCC, an independent regulatory body led by political appointees, is nearing a decision on whether broadband providers should be allowed to cut deals with content providers but is stumbling over the legal complexities.
"We are stunned the president would abandon the long-standing, bipartisan policy of lightly regulating the internet and calling for extreme" regulation, said Michael Powell, president and chief executive of the National Cable and Telecommunications Association, the primary lobbying arm of the cable industry, which supplies much of the nation's internet access.
This "tectonic shift in national policy, should it be adopted, would create devastating results", added Mr Powell, who chaired the FCC during the Bush administration until 2005.
Netflix swung behind Mr Obama, posting to its Facebook page that "consumers should pick winners and losers on the internet, not broadband gatekeepers".
"Net neutrality" is the idea that internet service providers should not block, slow or manipulate data moving across its networks. As long as content is not against the law, such as child pornography or pirated music, a file or video posted on one site will load generally at the same speed as a similarly sized file or video on another site.
In 2010, the FCC embraced the concept in a rule, but last January, a federal appeals court struck down the regulation because the court said the FCC did not technically have the legal authority to tell broadband providers how to manage their networks.
Mr Obama said the FCC should explicitly ban any "paid prioritisation" on the internet. The president also suggested that the FCC reclassify consumer broadband as a public utility under the 1934 Communications Act. That would mean the internet would be regulated more heavily in the way phone service is.
This approach is what industry lobbyists have spent months fighting against. While web providers say they support the concept of an open internet they want flexibility to think up new ways to package and sell services. And, given the billions spent to improve network infrastructure, some officials say it is only fair to make data hogs like Netflix bear some of the costs of handling heavy traffic.
AT&T threatened legal action if the FCC adopted Mr Obama's plan, while Comcast said reclassifying broadband regulation would be "a radical reversal that would harm investment and innovation, as today's immediate stock market reaction demonstrates".
Similar statements were released by Time Warner, Cox Communications and several industry groups including CTIA-The Wireless Association, USTelecom, the Telecommunications Industry Association and Broadband for America.
White House spokesman Josh Earnest said the president "felt this was an appropriate time" to make his views known because of the FCC's regulatory timeline, and that the timing was not related to Mr Obama's trip this week to Asia and Australia.