Tom Wheeler, the Chairman of the Federal Communications Commission, announced today that he will reclassify broadband internet providers as Title II utilities under the 1996 Telecommunications Act. The proclamation, written for Wired, dances back and forth between his specific plans and lots of bluster for a public that is hungry for more ISP regulation. One rather surprising note is that mobile broadband will also be included in this move, which was not nearly as expected or precedented.

What is this all about?

After a lawsuit filed by Verizon a year ago, a federal court ruled that the FCC did not have legal standing to enforce their net neutrality rules. The key question at hand was how much internet providers can tamper with the traffic on their networks. In an open internet, the provider cannot interfere with data that moves on their networks. However, Verizon and others wanted to have the right to boost the speed of some data and possibly slow down other kinds.

After losing the lawsuit, the FCC's current rules could not prevent that sort of tampering. After a great deal of debate and public posturing, we have arrived at this measure. Classifying ISPs as Title II utilities gives the FCC broad power to regulate them, the same way they do telephones. The reason not to do this, according to opponents, was that it would stifle investment.

What now?

Well, first, there will be lawsuits. There is some chance that the conservative Supreme Court could eventually decide that it is unconstitutional to regulate internet providers in this way. If that is to happen, it will be a while as the machinations of law tend to be rather slow.

The main consequence of this move will be to retain the status quo, more or less. ISPs cannot throttle Netflix to force them to pay for faster access. They cannot boost their own content's speeds over anyone else. Rather than get too nitty-gritty, here's the long and short of it:

The Good

No throttling Nothing you try to access on the internet can be intentionally slowed down by the provider.
No paid "fast lanes" or "paid prioritization" Providers cannot increase the speed of any particular service, whether or not they have paid one another to do so. Increase the speed of all connections or none of them, basically.
Legal content cannot be blocked This felt like a less imminent threat, but it's the final aspect of net neutrality to be considered. Providers cannot arbitrarily block any legal content.
No tariffs/fees Title II utilities usually are required to charge myriad fees and the like to manage their administration and tinker with pricing. That won't be part of the reclassification, for now.

The Not So Good

No price controls The FCC could legally mandate maximum or minimum prices for internet, but declined doing so. This is an olive branch to the industry, but would also have been very difficult to implement.
No last-mile unbundling Like price controls, this is now something the FCC could legally do. Unbundling means forcing ISPs to share their infrastructure with the competition. This is how landline telephones work already. Basically, without unbundling provisions, the new policy will do nothing to increase the options for broadband in your area.

The bit about last-mile unbundling is important because Wheeler talks in his article for Wired about how his 1980s start-up would have succeeded if he were allowed to use his competitors' equipment. He says this experience informed his decision, but he left that aspect of Title II out of his enforcement of the agency's new policy. Like I said, there's some pandering mixed into his announcement.

Verizon has already issued a statement, claiming this move by the FCC was "unnecessary" and "radical." Similar statements from other mobile and cable providers are expected. The truth of the matter is that their promises are empty; their actions are exactly what made the reclassification necessary.

One thing to look out for from mobile providers is that this could be the end of T-Mobile's Music Freedom offering. Allowing unlimited amounts of one kind of data - music - and not others would seem to cut against the provisions put forth today. Keep an eye out for how that feature fares in the near future.

The FCC has released a formal statement describing the decision as well.