By Heather Clancy
February 5, 2015

After weeks of telegraphing his intentions, FCC chairman Tom Wheeler officially confirmed the commission’s plan to push for stronger regulation of Internet service providers. Basically, he wants to treat them more like utilities.

The proposed rules (which the full commission will consider and vote on at a Feb. 26 meeting) are meant to discourage policies that would favor certain types of traffic over others—in exchange for payment.

Wheeler explains his decision in a Wired editorial:

“These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.”

There have been many twists and turns in the “net neutrality” saga, but here are three things to consider regarding this latest development.

1.) Cisco, IBM, and Qualcomm are in “strong opposition.” Back in mid-December, they were among more than 60 companies that flooded every branch of the government with a letter” arguing against Title II regulation. Theirs is an economic argument: “As some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband buildout, because if you don’t know what you can recover on your investment, you won’t make it.” Interestingly, another topic the FCC intends to discuss later this month is a plan that would make it easier for cities to build their own municipal broadband services.

2.) Verizon is really steamed, and a suit is likely if the rules pass. Michael Glover, the telecommunications company’s principal executive for public policy and government affairs, voiced his company’s displeasure in strong terms:Heavily regulating the Internet for the first time is unnecessary and counterproductive. It is unnecessary because all participants in the Internet ecosystem support an open Internet, and the FCC can address any harmful behavior without taking this radical step. Moreover, Congress is working on legislation that would codify open Internet rules once and for all. It is counterproductive because heavy regulation of the Internet will create uncertainty and chill investment among the many players—not just Internet service providers—that now will need to consider FCC rules before launching new services.

3.) Expect the requisite Congressional fight. The FCC’s proposal is at odds withRepublican-backed legislation calling for a middle ground. The bill calls for “Internet openness” but explicitly prohibits the FCC from using the telecommunications act to regulate service. “Regulating the Internet through ill-suited and antiquated authorities that were designed for the monopoly phone era will ultimately make the Internet more rigid and less innovative,” warned Senator John Thune (R-S.D.), one of the bill’s sponsors, in response to Wheeler’s proposal.

This item first appeared in the Feb. 5 edition of Data Sheet, Fortune’s daily newsletter on the business of technology. Sign up here.


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