FCC chairman Tom Wheeler on Wednesday said that he would seek new rules for net neutrality, after an appellate court last month overturned major provisions of its rules of the road preventing Internet providers from blocking or discriminating against certain types of web traffic.

Wheeler will open new proceedings to develop such rules that would prevent blocking or discrimination, in what could be a lengthy process that will involve a period of public comment. A docket will be opened where the public can comment on the D.C. Circuit's opinion.

But a question is how the FCC will find legal authority to impose such regulations. The DC Circuit found fault with the agency's regulation because they were passed without actually classifying the Internet as a "common carrier," akin to the way that it oversees utilities like phone service.

An FCC official said that they took the DC Circuit decision as an "invitation" to rewrite rules based on a provision of the 1996 Telecommunications Act that says that the agency has authority to promote broadband deployment, and by extension ensuring competition in the marketplace. The D.C. Circuit, while finding fault with the way that the FCC imposed the rules, nevertheless cited that 1996 provision, leading observers to suggest that it would be a way for the agency to proceed on firmer legal footing.

A possibility is that the new net neutrality would be written in a similar way that the agency wrote its data roaming rules, which have withstood legal scrutiny. Such rules provide more flexibility for telecom companies in negotiations in how they treat wireless traffic, but still leave a role for the agency in monitoring anticompetitive behavior.

Meanwhile, Wheeler said that the FCC would not appeal the D.C. Circuit's ruling.

A question has been whether the FCC would just merely classify the Internet as a "common carrier" service, something that is called "Title II" authority in regulatory parlance. Such a move would certainly put the FCC on solid legal footing, but it is viewed as politically untenable, as Wall Street and congressional Republicans have warned that it would slow the development of broadband with a wave of new regulation.

Nevertheless, an FCC official said that such a reclassification would continue to remain an option.

"In its Verizon v. FCC decision, the United States Court of Appeals for the District of Columbia Circuit invited the Commission to act to preserve a free and open Internet," Wheeler said in a statement. "I intend to accept that invitation by proposing rules that will meet the court's test for preventing improper blocking of and discrimination among Internet traffic, ensuring genuine transparency in how Internet Service Providers manage traffic, and enhancing competition."

Wheeler said that he also would seek to "enhance" the FCC's transparency rule, which the D.C. Circuit upheld. That rule requires Internet providers to provide some disclosure as to how they manage web traffic.

He also noted that, as the FCC devises new rules, major ISPs had indicated that they would continue to honor the net neutrality, and "we will take them up on their commitment."

Michael Powell, CEO of the National Cable and Telecommunications Assn., said that the cable industry "has always embraced the principles of an open Internet and remain committed to them.

"We look forward to working with Chairman Wheeler and the Commission on ensuring that American consumers will continue to enjoy a fast, robust and open Internet experience. We continue to believe that the values of an open Internet can be preserved, while avoiding a damaging move to heavier regulation."

Comcast exec VP David Cohen said that "with the direction announced today, FCC Chairman Wheeler has taken a thoughtful approach which creates a path for enforceable rules based on the appropriate authority outlined by the court's findings." Comcast has to abide by the net neutrality rules, regardless of the D.C. Circuit ruling, until 2018. That was among the conditions it agreed to as part of its acquisition of NBCUniversal in 2011.

Wheeler said that the FCC also will explore ways to build competition, including looking at ways that lift legal restrictions on the ability of cities and towns to offer the Internet to consumers.

"The FCC must stand strongly behind its responsibility to oversee the public interest standard and ensure that the Internet remains open and fair," Wheeler said. "The Internet is and must remain the greatest engine of free expression, innovation, economic growth, and opportunity the world has ever known. We must preserve and promote the Internet."

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