President Obama pushes for net neutrality. What does the FCC do now?

President Obama released a statement on Monday calling for the Federal Communications Commission to reclassify broadband Internet service as a public utility. How should the FCC respond to his request?

To say the Federal Communications Commission is in a delicate position would be to put it lightly. For months, FCC chairman Tom Wheeler has been considering a “hybrid” approach to Internet regulation, one in which the government would regulate the relationships between content companies (such as Netflix) and Internet service providers (such as Verizon), but in which the consumer side of things would be essentially left alone. Then on Monday, President Obama came out strongly for full net neutrality on Monday, issuing a statement that calls on the Federal Communications Commission to reclassify wired and wireless broadband Internet as a “common carrier” service subject to strict government oversight.

The FCC is an independent agency, so Mr. Wheeler and the other Commissioners aren’t required to go along with the President’s plan. But how might the FCC balance such a strong statement in favor of net neutrality with the more cautious plans it has been exploring for the past several months?

Mr. Wheeler released a response on Monday that provides some insight. First, he says, the President and the FCC agree on the basics: the Internet should be an open platform in which no players are advantaged over others (this means no “fast lanes” for those able to pay for content to be delivered more quickly). And the FCC agrees with the President that Internet companies shouldn’t be able to block content or degrade its delivery.

However, the FCC doesn’t seem to share Mr. Obama’s enthusiasm for reclassifying Internet providers as “common carriers.” This classification would give the government the power to ensure that companies such as Comcast and Verizon treat all traffic that flows across their networks with evenhandedness. But, industry groups say, it would also threaten the entrepreneurial spirit that led to the growth of the Internet in the first place, since government regulation could choke out innovation.

Wheeler noted in his statement that common-carrier reclassification “brings with it policy issues that run the gamut from privacy to universal service to the ability of federal agencies to protect consumers.” Translation: the FCC needs more time to consider whether reclassifying Internet providers -- including mobile providers such as T-Mobile -- as common carriers, subject to increased government regulation, is really in the best interest of consumers.

The FCC also wants to make sure its case is legally airtight before it announces any rule changes. The Commission’s 2010 Open Internet Rules made demands on Internet providers that were very similar to what’s on the table now -- no blocking, no prioritization, an obligation to be transparent about how traffic is handled -- but were struck down by the D.C. Circuit Court in January because the FCC wasn’t able to prove it had the authority to impose those requirements.

Reclassifying broadband providers as common carriers would be one way to establish that authority, but the Commission would need to prove that this change will benefit consumers and the Internet as a whole. Wheeler wants to make sure he can make that case, and says that the FCC needs “more time to examine these to ensure that whatever approach is taken, it can withstand any legal challenges it may face.”

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