Why You Should Expect AT&T and Congress to Fight the FCC

By Markets Fool.com

Federal Communications Commission Chairman Tom Wheeler has made it clear that he intends to pursue using Title II of the Federal Communications Act as a way to create net neutrality, also known as "open Internet." Using this method would classify Internet service providers as utilities, allowing the federal agency broad powers in regulating them.

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Wheeler's proposal, due to be delivered to the FCC's commissioners on Feb. 26, has met with immediate outcry from some Republicans in Congress, andAT&T has already threatened to challenge whether using Title II is legal.

AT&T wastes no time

Even before Wheeler made his intent to use Title II fully known (he had previously hinted at it strongly), AT&T posted a lengthy blog post on one of its websites detailing two filings it made with the FCC. The post made it clear that the Internet provider and wireless company had major issues with the concept of regulating ISPs via Title II.

"Those who oppose efforts at compromise because they assume Title II rests on bulletproof legal theories are only deceiving themselves," wrote Hank Hultquist, AT&T's federal-regulatory vice president, in the post.

AT&T didn't directly threaten to take legal action, but it cited a number of court cases and past decisions that heavily imply that it will take legal steps should the FCC adopt Wheeler's proposal.

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Let's get political

One reason the Republican-controlled Congress may fight the FCC plan is that it matches President Obama's vision for an open Internet. The president released a statement and video earlier this year calling on the FCC, which is technically an independent agency, to protect net neutrality. He never specifically mentions Title II, but his statement laid out very specific requirements that Wheeler seems to have taken to heart. Here's part of what the President said:

Net neutrality has been built into the fabric of the Internet since its creation -- but it is also a principle that we cannot take for granted. We cannot allow Internet service providers to restrict the best access or to pick winners and losers in the online marketplace for services and ideas.

Since the recent political tone in the the United States has been for Republicans and Democrats to automatically be against anything the other side supports, it seems natural that congressional Republicans would be against the Wheeler proposal.

Sen. John Thune (R-S.D.) called on the FCC to postpone its vote to give Congress time draft a bipartisan bill,USA Todayreported. Thune, along with Republican Representatives Fred Upton of Michigan and Greg Walden of Oregon, have drafted legislation that would ban ISPs from offering paid prioritization for faster lanes and prohibit the blocking or deliberate slowing of content but would not reclassify the Internet as a utility, according to the paper.

"If the FCC goes down this path, it gets challenged, it ends up in court, (and) it chills investment," Thune said "So it not only hurts innovation and investment ... but it also clouds the picture for the future."

Source: YouTube.

The FCC is pressing ahead

While Congress is likely to grumble, it seems likely that Obama would veto any legislation that attempts to circumvent the FCC. AT&T, and perhaps other ISPs, are likely to sue, but Wheeler knew that before he announced his intentions.

In an opinion piece published in Wired, the chairman seemed resolute and unlikely to back down.

"The Internet must be fast, fair, and open," he wrote. "That is the message I've heard from consumers and innovators across this nation. That is the principle that has enabled the Internet to become an unprecedented platform for innovation and human expression."

It seems likely that Wheeler will move forward on Feb. 26 and the FCC will adopt his proposal. Congress may act after that, but it would face a likely veto. That leaves AT&T and the rest of the ISPs to go to court, which they almost certainly will.

The article Why You Should Expect AT&T and Congress to Fight the FCC originally appeared on Fool.com.

Daniel Kline has no position in any stocks mentioned. He supports an open Internet but is fine with extensive regulations for CB Radio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.