The people have spoken. According to the Federal Communications Commission (FCC), it has received more than 677,000 comments regarding the proposed rules for how broadband providers can treat content traveling over their networks.

Not surprisingly, views have been mainly negative, as the proposed rules would allow a “fast lane,” whereby content providers could make special arrangements to receive preferential treatment.

According to WSJ.com, FCC staffers are sifting through the comments and sending weekly summaries to FCC Chairman Tom Wheeler, who wrote the proposed rules.

Mr. Wheeler and his allies say the rules, formally proposed May 15, reflect the hand the FCC has been dealt by the courts. The last two times the agency has tried to implement net neutrality, its rules were struck down in federal court. Wheeler claims his proposal is the fastest way to get some sort of structure in place, so that the FCC can look at the deals one by one to make sure they don’t put competitors at an unfair disadvantage or harm consumers.

The idea of case-by-case enforcement isn’t overly popular with Silicon Valley companies and consumer groups, who want clear, strict rules. They are pushing the FCC to reclassify broadband Internet access as a utility under communications law, a move that would subject it to greater regulation.

Realistically, though, reclassification of the Internet as a utility seems highly unlikely. Comcast (CMCSA), Verizon (VZ), AT&T (T) and the other major broadband providers say reclassification would be the death knell for investment and innovation in the nation’s broadband infrastructure.

The proposal also asks whether the FCC should consider banning paid deals outright, but doing so would inevitably lead to legal challenges. As a result, according to the WSJ article, a more likely option would be for the FCC to adopt a presumption against such deals, putting the burden on the companies to prove that such agreements are commercially reasonable.

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Wayne Thorp
ABOUT THE AUTHOR:

Wayne A. Thorp, CFA, is editor of Computerized Investing and a vice president and the senior financial analyst at The American Association of Individual Investors (AAII). He is also the program manager for AAII's Stock Investor Pro fundamental stock screening and research database program and is on the advisory boards of AAII's Stock Superstars Report and Dividend Investing newsletters. He holds the Chartered Financial Analyst (CFA) designation and is a 1997 honors graduate of DePaul University in Chicago. Wayne's interests include stock screening, technical analysis and charting, social media and tech gadgets. However, in the summer he'd prefer to be hip-deep in northern Michigan's Manistee River fly-fishing for rainbow trout.

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