President Obama Wants To Reclassify The Internet As A Utility

It's a significant policy position, allowing the FCC to enforce more robust regulations that would help secure a "free and open internet" and reject plans to allow internet service providers to charge websites in order to deliver higher-quality content to consumers.

The core principle of net neutrality is that government and private entities have to treat all data on the internet equally and not slow down or block access for those who don't pay a premium. For example, Comcast wouldn't be allowed to demand payment from a streaming service, such as Netflix, for full access to its broadband network.

"An open Internet is essential to the American economy, and increasingly to our very way of life. 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," Obama said in a statement.

The ultimate decision is up to the Federal Communications Commission, which is independent from the president.

Obama's statement laid out his plan to the commission:

I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online. The rules I am asking for are simple, common-sense steps that reflect the Internet you and I use every day, and that some ISPs already observe. These bright-line rules include:

-No blocking. If a consumer requests access to a website or service, and the content is legal, your ISP should not be permitted to block it. That way, every player — not just those commercially affiliated with an ISP — gets a fair shot at your business.

-No throttling. Nor should ISPs be able to intentionally slow down some content or speed up others — through a process often called "throttling" — based on the type of service or your ISP's preferences.

-Increased transparency. The connection between consumers and ISPs — the so-called "last mile" — is not the only place some sites might get special treatment. So, I am also asking the FCC to make full use of the transparency authorities the court recently upheld, and if necessary to apply net neutrality rules to points of interconnection between the ISP and the rest of the Internet.

-No paid prioritization. Simply put: No service should be stuck in a "slow lane" because it does not pay a fee. That kind of gatekeeping would undermine the level playing field essential to the Internet's growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect.

The issue of net neutrality is complex – the FCC has been working on rules that can stand up to legal scrutiny, delaying their release until 2015, The Wall Street Journal reported.

FCC Chairman Tom Wheeler said the president's statement was "important and welcome."

"Like the President, I believe that the Internet must remain an open platform for free expression, innovation, and economic growth. We both oppose Internet fast lanes. The Internet must not advantage some to the detriment of others. We cannot allow broadband networks to cut special deals to prioritize Internet traffic and harm consumers, competition and innovation," Wheeler said.

In January, he said, "a federal court struck down rules that prevented Internet Service Providers from blocking and discriminating against online content" and that the FCC is trying to find a way to codify the rules.

"The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," Wheeler said, "We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face."

President Obama's position is sure to upset major internet service providers. Verizon is criticizing the position.

Comcast Executive Vice President David L. Cohen released a statement Monday saying "full-blown Title II regime now" would be a "radical reversal" of precedent.

"Comcast fully embraces the open Internet principles that the President and the Chairman of the FCC have espoused -- transparency, no blocking, non-discrimination rules, and no "fast lanes", which is the way we operate our network today. We continue to believe, however, that section 706 provides more than ample authority to impose those rules, as the DC Circuit made clear.

Comcast and cable companies (along with the telcos) have led the broadband revolution, being the first to roll out America's fastest broadband speeds across the country. As the White House itself acknowledged in its broadband report in 2013, this only happened because we were not subject to the intrusive regulatory regime designed for a different era.

To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper. This would be a radical reversal that would harm investment and innovation, as today's immediate stock market reaction demonstrates. And such a radical reversal of consistent contrary precedent should be taken up by the Congress.

The internet has not just appeared by accident or gift -- it has been built by companies like ours investing and building networks and infrastructure. The policy the White House is encouraging would jeopardize this engine for job creation and investment as well as the innovation cycle that the Internet has generated."

And Gene Kimmelman, president of Public Knowledge, which advocates for net neutrality, said Obama's policy demonstrates "world leadership to promote freedom of expression."

But FreedomWorks, which advocates for small government, said, "we have seen the messes created by federal bureaucrats trying to micromanage industries they know nothing about."

Reaction on Capitol Hill fell largely along partisan lines.

House Democratic Leader Nancy Pelosi added, "the Internet cannot belong to the wealthy and well-connected."

But Senate Republican Leader Mitch McConnell – who will likely be the new Senate majority leader in 2015 – called Obama's position "a terrible idea."

McConnell said the policy was "in favor of more heavy-handed regulation that will stifle innovation and concentrate more power in the hands of Washington bureaucrats.: He added, "the Commission would be wise to reject it."

House Speaker John Boehner said "net neutrality is a textbook example of the kind of Washington regulations that destroy innovation and entrepreneurship."