Obama Calls For Tough 'Net Neutrality' Rules

Barack Obama has said internet service providers should be regulated like public utilities to make sure they grant equal access to all content providers.

The US President said the Federal Communications Commission (FCC) should explicitly prohibit internet providers like Verizon (NYSE: VZ - news) and AT&T (Sao Paolo: ATTB34.SA - news) from charging data hogs like Netflix (Xetra: 552484 - news) extra to move their content more quickly.

"Simply put, no service should be stuck in a 'slow lane' because it does not pay a fee," Mr Obama, who is currently in Asia, said in a "net neutrality" statement released by the White House.

"That kind of gatekeeping would undermine the level playing field essential to the internet's growth."

"Net neutrality" is the idea that internet service providers should not block, slow or manipulate data moving across its networks.

As long as content is not against the law, such as child sex abuse images, a file or video posted on one site will load generally at the same speed as a similarly sized file or video on another site.

In 2010, the FCC embraced the concept in a rule.

But last January, a federal appeals court struck down the regulation because the court said the FCC did not technically have the legal authority to tell broadband providers how to manage their networks.

And in May FCC chairman Tom Wheeler proposed new internet traffic rules that would allow content companies to strike "commercially reasonable" deals to ensure their websites and applications load smoothly and swiftly.

Although Mr Wheeler had pledged to police any such paid-prioritisation deals that would harm consumers, public interest groups worried that his proposed rules would create "fast lanes" for the companies that pay up and relegate others to "slow lanes".

Nearly four million comments flooded the FCC.

Consumer groups and content providers hailed Mr Obama's move, while some major players were not very pleased.

Netflix posted to its Facebook (NasdaqGS: FB - news) page that "consumers should pick winners and losers on the internet, not broadband gatekeepers".

Michael Powell, president and CEO of the National Cable and Telecommunications Association (NCTA), said it was "stunned" by the President's comments.

The NCTA is the primary lobbying arm of the cable industry, and it supplies much of the nation's internet access.

Many Republicans including House Speaker John Boehner sided with industry in denouncing the plan as government overreach.

Senator Ted Cruz wrote on Twitter (Xetra: A1W6XZ - news) that net neutrality is "Obamacare for the internet".

On Monday, as the Standard & Poor's 500 index edged up slightly, stock prices fell for big cable companies, including Time Warner Cable (NYSE: TWC - news) , Comcast, Cablevision and Charter Communications (NasdaqGS: CHTR - news) .