The Federal Communications Commission said it will propose rules on Thursday that could give high-speed Internet providers more power on what content moves the fastest on the Web based on which firms pay the most.
The move could dramatically reshape the Web experiences of consumers, where videos for ESPN.com, Facebook or YouTube might be delivered more smoothly because of payments to broadband providers such as Comcast, AT&T and Verizon. The streaming videos of a smaller competitor could be halted with buffering and low-quality images if those firms aren't able to pay ISPs access to faster Internet lanes into American homes.
In a proposal to be voted on May 15, the chairman of the FCC said new so-called net neutrality rules would prohibit broadband providers from straight out blocking sites and slowing down content in an anticompetitive manner. In a press briefing Thursday, the FCC is expected to outline criteria for its determination of unfair and anticompetitive business practices.
The move represents a retreat from the agency's position in past years on the net neutrality principle, in which Internet providers must treat all web content equally.
"Broadband providers would be required to offer a baseline level of service to their subscribers, along with the ability to enter into individual negotiations with content providers," an FCC official said on the conditional of anonymity. "In all instances, broadband providers would need to act in a commercially reasonable manner subject to review on a case-by-case basis."
The draft proposal will not be publicly released until it is brought to a vote next month, but news of the rules drew an immediate outcry Wednesday from consumer advocates who said the practice would give Comcast, Verizon and Time Warner Cable too much power over the experience of Web users.
"With this proposal, the FCC is aiding and abetting the largest ISPs in their efforts to destroy the open Internet," said Free Press president Craig Aaron.
Another concern is that under the system being proposed by the FCC, large Web companies like Facebook and Google would have an unfair advantage over startups that can't afford to pay for priority access into U.S. homes.
"If the FCC embraces this reported reversal in its stance toward net neutrality," said American Civil Liberties Union policy advisor Gabe Rothman, "barriers to innovation will rise, the marketplace of ideas on the internet will be constrained, and consumers will ultimately pay the price."
Late Wednesday, FCC Chairman Tom Wheeler responded to interest group criticism over the proposal.
"There are reports that the FCC is gutting the open Internet rule. They are flat out wrong," Wheeler said in a statement. "There is no 'turnaround in policy.'"
The FCC's proposed rules would not allow telecom firms to block Web sites. On a case-by-case basis, the agency would watch for practices that are anti-competitive; for instance, if Verizon threatened to slow down Netflix, which competes with Verizon's Redbox Instant video and FiOS television service, the FCC could potentially weigh in. Broadband firms could begin to strike deals for preferential treatment on their networks, according to the source, as long as agreements between the firms are considered "commercially reasonable."
The news of the proposal's content was first reported by the Wall Street Journal.
A spokeswoman for Wheeler declined to comment specifically on the proposal. But she said it will be "consistent with the framework laid out in February," when Wheeler announced his plans to create new so-called net neutrality rules.
Wheeler is also expected to ask in his draft if the agency should pursue a reclassification of broadband Internet services under monopoly telecom rules. That portion of the plan is expected to evoke wide protest, particularly among Republican lawmakers and businesses who say the agency should not strap new rules onto broadband providers.
If the five-member commission approves the draft of the new net neutrality rules, the FCC will then receive public comments. It is expected to come up with final regulations by the end of summer.