Obama and net neutrality: What it means (and what you need to know) by Peter Suciu @FortuneMagazine November 10, 2014, 4:50 PM EST E-mail Tweet Facebook Google Plus Linkedin Share icons On Monday, U.S. president Barack Obama called for the reclassification of the Internet as a utility. The notion that the Internet can have a paid “fast lane” and an unpaid “slow lane” is dangerous, he said, because it has become an essential part of communication today. “There are no toll roads on the information superhighway,” Obama said in a video. Obama’s plan would in essence allow the Federal Communications Commission to regulate the Internet much as it does landline phones. This would mean that the FCC would have far greater control and oversight of Internet Service Providers, or ISPs—a move that some say would help ensure an open Internet. Others claim would impair its growth and innovation. “Obama’s plan to reclassify broadband as a utility is something he’s supported for a very long time,” says Charles King, an analyst at Pund-IT. “In essence, for over a decade the FCC has considered broadband an ‘information service’ rather than a telecommunications, or utility, service. Under federal law, the FCC has far less oversight or ability to regulate the former than the latter.” And if Internet services are reclassified under Title II of the Telecommunications Act? “Broadband players will be classified as ‘common carriers’ like phone services—meaning that they must provide equal access to all customers, be regulated more closely by the FCC and be subject to punishment/fines for breaking the rules,” King adds. Obama didn’t actually suggest he would act by issuing an executive order; his statement was only a (highly public) proposal. Still, there could be some implications that such a reclassification could bring. Can’t block it In his statement, Obama suggested that there would be no blocking of content. So long as that content is legal, an ISP would not be permitted to block it. ISPs cannot block religious, political or other socially motivated content. It also means that an ISP, such as a cable provider, would not be able to block content that is provided by a competitor. Obama laid out that “every player—not just those commercially affiliated with an ISP—gets a fair shot at your business.” Can’t slow it down There would also be no “throttling”—the deliberate slow-down of Internet data transfer speeds—based on an ISP’s preference. “In practical terms today broadband companies have been free to create Internet ‘fast lanes’—’toll roads’ is a more accurate description—and to throttle the accounts of users they feel are consuming too much bandwidth,” King says. This is important to note because earlier this year Comcast essentially throttled the content streamed by Netflix NFLX , resulting in poor quality video for many of the streaming service’s subscribers. Under Obama’s proposal such throttling wouldn’t be allowed. Still, it remains unclear who would pay for the extra bandwidth that heavy content, such as video, demands. Can’t hide behind it Obama further called for increased transparency—and not just for the “last mile,” the term used to describe the part of the connection between the ISP and the consumer. His proposal also calls for net neutrality rules to be enforced at points of interconnection between the ISP and the rest of the Internet. This means that one ISP would not be allowed to slow down content from another provider. Again, the issue of who will pay for content that has a heavy bandwidth burden remains unresolved. Can’t charge extra for it The proposal levels the playing field for content creators by explicitly banning so-called paid prioritization by ISPs. Any type of gate-keeping activity that would require users to pay more for better service is not allowed. Opponents say this would merely lead to everyone paying for premium Internet service. The FCC becomes more powerful Open Internet advocacy groups have called for full Title II reclassification. Some opponents of the measure say that such a move could give the FCC greater power over who can and cannot provide a service and even define how ISPs provide broadband. Opponents also say the FCC could influence the price (in an escalating direction, naturally) of Internet service by driving up prices for consumers. On the other hand, a full reclassification could provide consumers with a more formal complaint system and, in turn, subject ISPs to increased scrutiny. “Comcast and Verizon want to scare the public and Congress by calling Title II ‘regulation of the Internet,'” says Evan Greer, campaign director of the advocacy group Fight for the Future. “Title II is about preventing a select few companies from regulating what people can and can see and do on the Internet.” The fight gets political Without question Obama’s proposal will reignite the net neutrality debate. His timing comes just a week after his Democratic Party faced its biggest election setback in more than a decade. A showdown could loom as Congress, now controlled by the Republican Party, faces off against the White House. “There’s a political angle to the president’s proposal,” King says. “In general, Republicans have sided with broadband carriers in resisting reclassification but continuing that course is likely to put them squarely at odds with consumers at a time the party is hoping to tune itself up for the 2016 presidential elections. It’ll be interesting to see which side of this argument the various politicians angling for a spot on the ticket support.” A bruising political battle will also rekindle general concerns about the government’s ability and willingness to regulate technology. “This move by President Obama would be a complete reverse-course from the path the industry has been on since the 1990’s,” says Jeff Kagan, a telecommunications industry analyst. “The Internet is a brand new and rapidly changing technology. The government cannot expect to play a role simply because it does not move fast enough.” Kagan added: “If we want to see the Internet continue to grow and change, we must not completely destroy and reinvent the policy. This is a matter of companies and their investments into bringing this amazing technology to reality. We have been doing a pretty darn good job of that so far.” Next, read: “Is municipal broadband more important than net neutrality?” by Andrew Zaleski.