President Barack Obama's statement on net neutrality and Title II reclassification that he issued on Monday is stirring up more heat as FCC Chairman Tom Wheeler is proposing a compromise on the proposed laws.
As a result of this new political challenge, Wheeler has decided the best course of action is to delay making a final decision until next year.
"There will not be a vote on open internet rules on the December meeting agenda. That would mean rules would now be finalized in 2015," FCC Press Secretary Kim Hart told the Daily Dot.
In a statement responding to Obama's call for tighter net neutrality regulations, Wheeler said the commission needs more time to examine all of the legal implications of his proposed hybrid approach and Title II reclassification.
"The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do," Wheeler wrote. "The reclassification and hybrid approaches before us raise substantive legal questions. We found we would need more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face. For instance, whether in the context of a hybrid or reclassification approach, Title II brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers, as well as legal issues ranging from the ability of Title II to cover mobile services to the concept of applying forbearance on services under Title II."
One of the key divisions between Obama and Wheeler is their approach to net neutrality. Obama's call to reclassify consumer broadband service under Title II of the Telecommunications Act as a common carrier service is in contrast to Wheeler's call to take a "hybrid" approach that would only reclassify parts of the broadband ecosystem as common carriers.
Under Wheeler's proposed plan, Wheeler is considering separating broadband into two parts: a retail element where consumers would pay service providers like Comcast (NASDAQ: CMCSA) or Verizon (NYSE: VZ) for their broadband service and a back-end or wholesale element where broadband providers would serve as a backbone for content providers like Netflix (NASDAQ: NFLX) or Amazon (NASDAQ: AMZN) to distribute content.
According to a Washington Post report, Obama's statement has frustrated Wheeler, who pointed out to executives from major Web companies, including Google (NASDAQ: GOOG), Yahoo and Etsy during a meeting at the FCC that "I am an independent agency."
Wheeler reportedly reiterated his desire to come to compromise on net neutrality that both protects Internet traffic from discrimination while acknowledging the concerns of both incumbent service telcos and cable operators like Verizon Communications, AT&T (NYSE: T) and Time Warner Cable (NYSE: TWC).
At the same time, there are a number of political implications that could stem from Obama's statement. The Washington Post reported that Obama could use the net neutrality debate to drive a wedge against the Republicans, who are largely against additional government regulation. Obama and the Democratic party could get support from Silicon Valley companies like Google that favor strong net neutrality rules. Wheeler, who has decades of experience in the cable and traditional telecom industry sectors, could use that knowledge "to split the baby."
Regardless of the ultimate outcome, this latest development is having a rippling effect in the telecom industry, particularly for large incumbent telcos that want to invest in next-gen fiber and IP-based network infrastructure.
AT&T Chairman and CEO Randall Stephenson said during the Wells Fargo Technology, Media & Telecom Conference that it will halt its fiber deployments until the net neutrality issue is resolved.
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