updated 5/5/2010 6:55:56 PM ET 2010-05-05T22:55:56

Federal regulators plan to change how they govern broadband services to ensure they can pursue their plan to bring high-speed connections to all Americans — and can require phone and cable companies to treat all Internet traffic equally.

Federal Communications Commission Chairman Julius Genachowski on Thursday plans to lay out a roadmap for regulating broadband. This step has been eagerly anticipated since a federal court ruling last month cast doubt on the agency's authority over high-speed Internet access.

The FCC now regulates broadband lightly as an "information service." It had maintained that this gave it the authority to implement a sweeping national broadband plan it released in March. Among other things, the plan includes a proposal to use federal subsidies for telephone service to help pay for Internet connections.

The FCC also said its existing regulatory framework gave it ample authority to impose so-called "network neutrality" rules prohibiting broadband providers from favoring or discriminating against any traffic flowing over their networks.

But the U.S. Court of Appeals for the District of Columbia rejected this argument. It ruled last month that the FCC had overstepped when it imposed net neutrality obligations on cable giant Comcast Corp.

Seeking 'third way'
Since then, the FCC has been trying to decide whether to reclassify broadband as a telecommunications service, which would be subject to heavier regulation and "common carrier" obligations to share networks and treat all traffic equally.

Late Wednesday, the agency said it will seek a "third way" — a balance between the "weak" rules for information services and "needlessly burdensome" rules for telecommunications services. This approach, the FCC said, would apply a "small handful" of telecommunications regulations to broadband providers and set "meaningful boundaries to guard against regulatory overreach."

The commission is trying to satisfy both big phone and cable companies that oppose additional rules and public interest groups that have been calling on it to regulate broadband as a telecommunications service.

The FCC said the new approach also will "restore the status quo as it existed prior to the court decision."

Net neutrality principles
Last month's ruling centered on Comcast's interference in 2007 with the online file-sharing service BitTorrent, which lets people swap movies and other big files. The FCC, then led by Republican Kevin Martin, ordered Comcast to stop blocking subscribers from using BitTorrent.

The agency based its decision on net neutrality principles it adopted in 2005.

Comcast argued the order was illegal because the agency was seeking to enforce principles and not regulations or laws.

Genachowski, a Democrat, is now pushing the FCC to adopt formal net neutrality rules that would apply across the industry.

Comcast also argued the FCC lacks authority to mandate net neutrality because it deregulated broadband by classifying it as an information service, a decision the Supreme Court upheld in 2005.

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