FAQ: What is net neutrality and what is the FCC's plan for the Internet?

(Reuters) - The U.S. Federal Communications Commission is collecting public comments until Sept. 10 on new "net neutrality" or "open Internet rules" that may let service providers charge content companies for faster and more reliable delivery of their traffic to users.

Below are some details about the concept of "net neutrality" and the FCC's work to regulate Internet traffic.

WHAT IS NET NEUTRALITY?

Net neutrality is a principle that says Internet service providers should treat all traffic on their networks equally. That means companies like Comcast Corp or Verizon Communications Inc should not block or slow down access to any website or content on the Web - for instance, to benefit their own services over those of competitors.

HOW IS NET NEUTRALITY REGULATED?

The FCC, which regulates telephone and cable companies that provide broadband service in the United States, has several times adopted rules aimed at ensuring Internet providers abide by the net neutrality principle.

In 2010, FCC passed an order that prohibited Internet providers from blocking traffic. It allowed "commercially reasonable" discrimination of traffic, but rejected potential "pay-for-priority" deals that may have allowed content companies to pay for faster delivery of their traffic.

But a U.S. appeals court in January ruled against the FCC in a case brought by Verizon, effectively striking down the agency's net neutrality regulations.

Comcast is the only Internet provider that has to abide by the older version of those rules until 2018, because of a condition placed on its acquisition of NBC Universal. All other major Internet providers have said they support an open Internet.

WHY DID THE COURT REJECT THE RULES?

In setting the 2010 rules, the FCC treated Internet providers like utilities similar to telephone companies, which are more heavily regulated. The U.S. Court of Appeals for the District of Columbia Circuit ruled that treatment improper because broadband providers were actually classified as less-regulated information service providers.

WHAT IS THE FCC'S NEW PLAN?

The court did affirm the FCC's authority to regulate broadband, indicating that the agency could use another section of the communications law to restore some of the rules.

Based on that guidance, the FCC has proposed new rules that would ban Internet providers from blocking users' access to websites or applications and would require them to disclose exactly how they manage traffic on their networks.

Under the proposal, some "commercially reasonable" deals to give priority to certain Web traffic may be allowed, although the FCC also seeks comment on whether "some or all" pay-for-priority deals should be presumed illegal.

The proposal also asks questions about potentially reclassifying broadband providers and how the FCC may address so-called "interconnection" deals that are currently outside the scope of net neutrality rules, but which have been in spotlight in Netflix Corp's recent spat with Comcast and Verizon.

WHY ARE CONSUMER ADVOCATES OPPOSED?

Consumer advocates say Wheeler's proposal would create "fast lanes" for companies willing to pay while leaving startups and others behind, which would potentially harm competition.

More than 100 technology companies including Google Inc, Facebook Inc and Amazon.com Inc have warned of a "grave threat to the Internet."

However, consumer advocates are pushing for reclassification of broadband providers as public utilities, while tech companies in their opposition to pay-for-priority have not supported reclassification.

WHAT DO OPPONENTS OF REGULATION SAY?

Internet providers say stricter net neutrality regulations could discourage investment in the expensive network infrastructure. Verizon, in its case against the FCC, argued that the rules amounted to government overreach into companies' business dealings.

Past efforts to regulate broadband providers more like telephone companies have drawn backlash from the cable and wireless industries and Republican lawmakers. Companies have argued that reclassification would create prolonged regulatory uncertainty without preventing pay-for-priority deals.

(Reporting by Alina Selyukh; editing by Andrew Hay and Cynthia Osterman)