Report: 'Net Neutrality' Set to Become New Reality

According to initial reports from the Wall Street Journal, the Federal Communications Commission (FCC) is set to approve chairman Julius Genachowski's proposed government regulations to implement a new "net neutrality" plan aimed at blocking internet providers from regulating web traffic:

The rules are expected to bar providers from discriminating against legal Internet traffic and require more transparency. They also would let broadband providers for the first time charge more to companies that want faster service for delivery of games, videos or other services.

Net neutrality has become a contentious issue as worries grow that large phone and cable companies are growing too powerful as Internet gatekeepers. Start-ups and small businesses that rely on the Internet to provide shopping, information or other services to consumers are particularly concerned.

The FCC has wanted to step in and act as an Internet traffic cop, but Congress has never given it clear authority to do so.

"We must take action to protect consumers against price hikes and closed access to the Internet—and our proposed framework is designed to do just that: to guard against these risks while recognizing the legitimate needs and interests of broadband providers," FCC Chairman Julius Genachowski said in a blog post this month.

The proposal has split the five-member FCC board. The two Republican members say the proposed rules impose an unneeded burden and will discourage broadband investment.

Mr. Genachowski's two Democratic colleagues said his plan didn't go far enough, particularly on rules covering wireless networks, but agreed to back it anyway.

Now that the proposed regulations are expected to pass, industry representatives and advocacy groups are expected to file a number of legal complaints.

In April, a federal appeals court tossed the FCC's first effort to enforce net neutrality rules, saying the agency hadn't justified its authority to act. The current proposal is expected to use a similar argument to the one used in the April case.

In May, the FCC's general counsel said using a variation on the same argument was "a recipe for prolonged uncertainty" but FCC lawyers now say upon further consideration, they believe their plan will withstand challenge.

In addition to legal challenges, expect a battle in Congress over the new regulations, led by Republican opponents.  GOP Senate leader Mitch McConnell, R-Ky., posted this video Monday, urging Americans to oppose the new regulations:

Additionally, Sen. Kay Bailey Hutchison, R-Texas, has suggested cutting off FCC funding needed to enforce the new rules and House GOP leaders have planned to hold hearings and propose legislation to block the agency's proposed new rules.

But Republicans won't be the only ones to oppose the FCC's new proposed rules. While many Republicans denounce the rules as an "interventionist over-reach by an activist federal regulator intent on asserting control over the internet," a number of Demcorats -- including Sen. Al Franken, D-Minn. -- complain that the proposed rules are inadequate and will likely continue pushing for more stringent industry regulations.