(Updated) Over Comcast’s Objections, Obama Urges FCC to Reclassify Internet

Philly company says move could stifle innovation.

[Update 12:20 p.m.] Comcast has issued a response to the president’s announcement, from Executive Vice President David Cohen:

“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.”

[Original 10:30 a.m.] Here’s some federal news with big local implications: President Obama today urged the Federal Communications Commission to classify Internet service as a utility — a move that would give the agency power to enforce “net neutrality” principles.

Philly-based Comcast has long said it supports an “open Internet,” but has opposed the FCC’s move to reclassify broadband service as Obama proposes — saying utility-style rules for Internet service might stifle innovation. (Read the President’s full statement here.)

Obama doesn’t have the final word. The FCC, led by Chairman Tom Wheeler, is expected to make its final decision on the matter next year. Still: We wonder if Comcast’s David Cohen will be hosting any more fund-raising dinners for the president.

Now for some explanations:

The Verge:

“The time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do,” Obama writes in a statement this morning. “To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services.”

Internet providers are highly opposed to this kind of heavy regulation, which would largely turn their service into pipes that the internet flows through — rather than allowing them to treat it as a special type of service and make decisions about what you can and can’t do online.

National Journal:

Under his plan, the FCC would classify broadband Internet as a “telecommunication service,” a provision the agency uses to regulate telephone companies. Broadband providers like Comcast and Verizon have been lobbying fiercely against the same classification for Internet service, warning it would strangle their industry with utility-style regulations.

Under his plan, the FCC would ban Internet providers from blocking websites, throttling Internet service, or striking any deals for special Internet “fast lanes” for websites that pay more. The rules would apply equally to a home Internet connection and mobile devices.

Re/Code says Comcast may head to Congress to prevent such action:

Obama’s move Monday is likely to upset broadband providers, many of whom have been campaign donors, but given the president isn’t running for office again their ire may have little impact. Verizon Communications, Comcast and other providers are likely to turn to the new Republican-controlled Congress for help with the rules, although it would be hard for lawmakers to do much about it.

Broadband providers have fought having their lines regulated under Title II because they don’t want regulators setting the rates they can charge to consumers and business customers. The rules would also open up the prospect of requiring them to sell wholesale access to their networks to rivals. In the statement, the president basically said that he thinks the FCC should rule that those sorts of provisions shouldn’t apply to modern broadband networks.

More to come on this story, for sure.