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TODAY'S TOP PARAGRAPH: News leaked out Wednesday that the FCC's new net-neutrality rules will allow Internet service providers to charge websites for special "fast lanes." Consumer advocacy groups and liberal lawmakers are going ballistic, fearing the FCC is about to turn over control of the Internet to a few massive providers. Wheeler issued a statement late Wednesday to try to control the damage.
THE NEW NET-NEUTRALITY RULES: Under Wheeler's proposed new rules, Internet providers would still be required to offer a fundamental level of service, effectively keeping in place the anti-blocking requirement, an official said. But instead of the discrimination ban, the new rules will allow Internet providers to offer websites varying speeds as long as the arrangements are "commercially reasonable."
Free Press President Craig Aaron said the proposal is an "insult to those who care about preserving the open Internet." Michael Weinberg, a vice president at Public Knowledge, claimed the FCC is "inviting ISPs to pick winners and losers online."
The proposal is also beginning to prompt a backlash from Hill Democrats. Sen. Cory Booker called the news "deeply disturbing" and Sen. Ron Wyden warned that "monopolist interests cannot be allowed to pick winners & losers."
Wheeler tried to get the situation under control with a statement late Wednesday. He said that any reports that the FCC is "gutting" the net neutrality rules are "flat out wrong."
"There is no 'turnaround in policy.' The same rules will apply to all Internet content. As with the original Open Internet rules, and consistent with the court's decision, behavior that harms consumers or competition will not be permitted," he said.
Wheeler will circulate the new rules with the other commissioners today for a vote on May 15.
The truth is that as long as the FCC doesn't reclassify broadband as a "telecommunications service," Wheeler has few other options. NJ reported in February that this was the direction the FCC planned to take. The federal courts would block the FCC from just reinstating the old rules. Although the option for reclassification will remain on the table, Wheeler seems to be uninterested in the political fight with Republicans and business groups it would spark. (Sasso, NJ)
FEC DELAYS DECISION ON BITCOIN POLITICAL DONATIONS: Officials agreed to push back a decision on allowing bitcoin contributions to the Federal Election Commission's next open meeting. Commissioner Ellen Weintraub expressed concerns about bitcoin's anonymity, and some speculated that allowing bitcoin donations could be at odds with its IRS classification as property, not currency. For an overview of the proposal, read here.
FCC APPROVES BROADBAND AND SPECTRUM ITEMS: The FCC approved two items at its monthly meeting Wednesday. The first was a framework to move ahead with Phase II of the Connect America Fund, which will ultimately provide nearly $10 billion to expand broadband in rural areas. Under the plan, the FCC will consider raising the required speed for subsidized networks from 4 Mbps to 10 Mbps.
In the second vote, the agency proposed to allow some commercial use of 150 MHz of spectrum in the 3.5 GHz band. The proposal would set rules to allow government agencies and commercial groups to share the spectrum.
AT&T AND FCC ARE PLAYING CHICKEN: Wheeler accused the wireless carrier of bluffing that it would sit out the spectrum auction. (Sasso, NJ)
CTIA HIRES MEREDITH ATTWELL BAKER AS NEW CEO: Baker, a Republican and former member of the FCC until 2011, is leaving her gig as a lobbyist for Comcast to join the wireless group. (Sasso, NJ)
FACEBOOK EARNS APPROVAL TO BUY OCULUS ... The FTC gave the go-ahead for Facebook to purchase the virtual reality company for $2 billion, its second-largest acquisition.
... AND TRIPLES PROFIT IN THE FIRST QUARTER ... The social media network say it's just starting to cash in on its huge swath of users that long on regularly. (Vindu Goel, NYT)
... AS CFO DAVID EBERSMAN STEPS DOWN: After five years with Facebook, Ebersman is leaving to "move back into health care." His replacement is David Wehner, the company's current vice president for corporate finance and business planning, who will start on June 1. (Julian Hattem, The Hill)
SHARES DROPPING AS WIRELESS COMPANIES FIGHT DISCOUNT WAR: AT&T is among wireless companies that have seen share values decline as providers cut their prices in order to woo in clients in a close-to-saturated market. (Marina Lopes, Reuters)
BRAZIL PASSES INTERNET BILL OF RIGHTS: In the wake of U.S. surveillance revelations, Brazil's Senate unanimously passed legislation that protects Brazilians' privacy and access to the Internet. (Anthony Boadle, Reuters)
AMAZON'S HBO WIN: Amazon Prime users will soon be able to stream some of HBO's older shows like The Sopranos, the first time HBO has given a video-streaming service access to its shows. (Peter Kafka, Re/Code)
THE DAY AHEAD
NETMundial goes into its second and final day of discussions.
- Reps. Jared Polis and Kristi Noem will join the Congressional E-Learning Caucus for a lunchtime discussion on data privacy in education at noon.