FCC to vote on new 'net neutrality' proposal as protesters demand they 'keep the Internet free'

By Alina Selyukh

WASHINGTON (Reuters) - U.S. telecommunications regulators on Thursday were expected to vote in favor of formally proposing new "net neutrality" rules that may let Internet service providers charge content companies for faster and more reliable delivery of their traffic to users.

Federal Communications Commission Chairman Tom Wheeler has come under fire from consumer advocates and technology companies for proposing to allow some "commercially reasonable" deals where content companies could pay broadband providers to prioritize traffic on their networks.

Two Republican FCC commissioners are expected to vote against Wheeler's proposal. Wheeler's two fellow Democrats have both expressed misgivings about the plan, but were likely to vote to launch the process and open it up to public comment.

Critics worry the rules would create "fast lanes" for companies that pay up and mean slower traffic for others, although Wheeler has pledged to prevent "acts to divide the Internet between 'haves' and 'have nots.'"

More than 100 activists protested at the FCC on Thursday, with signs reading "Liberate the Internet" and "Keep the Internet Free" and three audience members were escorted out of the meeting room for standing and shouting protests.

"The Internet has become such an integral part of how we communicate," said one of the protesters, Jo Crane, a student from Virginia. "It seems incredibly unfair that big companies get to decide what we see."

Consumer advocates want the FCC to reclassify Internet providers as utilities, like telephone companies, rather than as the less-regulated information services they are now. That move is opposed by broadband companies and Republicans, both in Congress and at the FCC.

Opponents, including House of Representatives Speaker John Boehner and CEOs of major Internet providers, told Wheeler that stricter regulations would throw the industry into legal limbo, discourage investment in network infrastructure and still not prevent pay-for-priority deals.

House Democrats have come out on both sides of the reclassification issue in recent communications to Wheeler.

More than 100 technology companies, including Google Inc and Facebook Inc, have spoken out against allowing pay-for-priority, although have not called for reclassification.

Wheeler's proposal reaches the tentative conclusion that some pay-for-priority deals may be allowed, but asks whether the FCC should presume "some or all" such deals are illegal, according to an FCC official briefed on the proposal. It also asks whether the FCC should instead consider reclassification or other net neutrality proposals.

"He says he wants to get to the same place as us," said Marvin Ammori, who represented group Engine Advocacy at a meeting of reclassification advocates with Wheeler Thursday morning. "The legal path he's chosen just can't get him where he wants to go... But we're glad he's on his way to the same place."

The FCC will also vote on Thursday on rules for the sale of highly valuable low-frequency airwaves to wireless carriers. Those rules are expected to restrict how much the largest two providers, Verizon and AT&T, can buy.

(Reporting by Alina Selyukh. Editing by Ros Krasny, Andre Grenon and Andrea Ricci)