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FCC Decision on Net Neutrality: What Does it Mean?

Image: FILE: FCC Proposes 'Net Neutrality' Rules

FILE - FEBRUARY 4, 2015: It was reported that FCC Chairman Tom Wheeler has proposed reclassifying the Internet as a Title II telecommunications utility paving the way to set formal rules and preventing providers from governing content February 4, 2014. WASHINGTON, DC - MAY 15: Federal Communications Commission (FCC) Chairman Tom Wheeler speaks during a news conference after an open meeting to receive public comment on proposed open Internet notice of proposed rulemaking and spectrum auctions May 15, 2014 at the FCC headquarters in Washington, DC. The FCC has voted in favor of a proposal to reform net neutrality and could allow Internet service providers to charge for faster and higher-quality service. Alex Wong / Getty Images

The battle over net neutrality is expected to reach a crucial milestone on Thursday as the FCC votes on whether the Internet should be regulated like a public utility.

The proposal unveiled earlier this month by Federal Communications Commission Chairman Tom Wheeler is expected to pass. It treats broadband providers as "common carriers" under Title II of the Telecommunications Act, like gas or electricity companies, instead of "information services," like Google or Facebook. The common carrier designation would give the FCC the authority to regulate Internet service providers (ISPs) to prohibit "fast lanes" that would grant faster access to companies that pay for the privilege.

It's a win for open Internet activists, but for the average consumer, it's not clear exactly what will change.

"The day after the FCC order, your broadband will still cost the same amount as it did before," said Kevin Werbach, a professor of legal studies and business ethics at the University of Pennsylvania's Wharton School.

"Since 2010, there has been a set of rules, but it was unclear if those rules were enforceable," he said. "All this ruling means is that there will be FCC jurisdiction to examine practices and hear complaints."

Who will come out on top?

The debate over net neutrality has often been cast as pitting ISPs like Verizon against Web companies like Google and Netflix. (Comcast, another major Internet service provider, is the parent company of NBCUniversal and NBC News.)

In reality, it's not easy to divide companies into winners and losers, since it's not clear exactly what actions the FCC will take.

Make the Case: Is Net Neutrality a Good Idea? 2:20

John Mayo, executive director of Georgetown University's Center for Business and Public Policy, thinks that "public utility-style regulations" could make life harder for cable and Internet companies.

"If you're a provider of the Internet infrastructure, this measure is going to create a tremendous amount of chaos," he told NBC News. "The natural response of companies faced with legal and regulatory uncertainties is to pull in and reduce risk-taking."

Meanwhile, Netflix, which campaigned hard for net neutrality rules, should feel reassured that it won't be charged more for the bandwidth it takes up. (Last year, research firm Sandvine estimated that Netflix streaming was responsible for nearly 35 percent of peak Internet traffic in the United States).

Net neutrality rules likes the ones expected to pass on Thursday have been supported in the past by Google, Facebook and Amazon, as well as smaller companies like Etsy and Reddit.

The FCC received 3.7 million comments from the public on net neutrality. At one point, 99 percent of them were in favor of regulations like the ones that are expected to pass, according to a study from the Sunlight Foundation, an open government advocacy organization.

The road ahead

Some Republicans in Congress have remained defiant, characterizing the proposal as government overreach.

It's possible that the Republican-controlled Congress could pass legislation that undermines the expected FCC ruling, but it's not clear that such a law could avoid President Barack Obama's veto pen.

In November, Obama pushed the FCC to institute stronger net neutrality rules, saying that Internet service providers shouldn't be able to "pick winners and losers in the online marketplace for services and ideas."

Regardless of legislative action, broadband providers could fight back with their lawyers.

"This set of rules will undoubtedly be challenged," Werbach said.

In the end, the new FCC rules mostly affect what could happen, not what is happening now, Werbach said, meaning that broadband providers and Web companies could see very little change in how they do business in the short term.

"Both sides in this debate tend to exaggerate this as an all-or-nothing decision that will transform the Internet."