Obama’s Favorite Internet Provider Hates His Net-Neutrality Plan

An Iowa utility fears it will face burdensome federal regulations.

President Obama speaks in Cedar Falls, Iowa on efforts to increase access to high-speed Internet service. 
National Journal
Feb. 3, 2015, 2:02 p.m.

A city-owned In­ter­net pro­vider touted by Pres­id­ent Obama for its blaz­ing-fast speeds is now lob­by­ing against his plan for net-neut­ral­ity reg­u­la­tions.

Last month, Obama traveled to Ce­dar Falls, Iowa, to pro­mote the city’s pub­lic util­ity, which de­liv­ers In­ter­net speeds up to 100 times faster than the na­tion­al av­er­age.

“What you’re show­ing is that here in Amer­ica, you don’t have to be the biggest com­munity to do really big things,” Obama said. “You just have to have some vis­ion, and you have to work to­geth­er.

He urged the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to strike down state laws that lim­it loc­al gov­ern­ments from build­ing their own net­works. If cit­ies want to com­pete with private pro­viders to of­fer the best In­ter­net ser­vice, they should be able to, Obama ar­gued.

“In some states, it is vir­tu­ally im­possible to cre­ate a com­munity net­work like the one that you’ve got here in Ce­dar Falls,” he said. “Enough is enough. We’re go­ing to change that so every com­munity can do the smart things you guys are do­ing.”

Ce­dar Falls Util­it­ies was thrilled that Obama chose to single it out as one of the best In­ter­net pro­viders in the coun­try. But the pro­vider is much less ex­cited about his plan for net-neut­ral­ity reg­u­la­tions.

In a fil­ing made pub­lic Tues­day, Ce­dar Falls Util­it­ies ar­gued that Obama’s net-neut­ral­ity plan would bur­den the com­pany with un­ne­ces­sary fed­er­al reg­u­la­tions.

Betty Ze­man, an ex­ec­ut­ive for Ce­dar Falls Util­it­ies, along with rep­res­ent­at­ives from oth­er small In­ter­net pro­viders, met with FCC staff last week, ac­cord­ing to the fil­ing, which was pre­pared by the Amer­ic­an Cable As­so­ci­ation, a lob­by­ing group for small pro­viders.

They ar­gued that small In­ter­net pro­viders wouldn’t be able to get big Web com­pan­ies to pay for spe­cial In­ter­net “fast lanes” even if they wanted to. Only the big pro­viders have that kind of clout, they claimed.

“Net­flix would laugh us out of the room if we asked for money,” Ze­man said, ac­cord­ing to the fil­ing.

The pres­id­ent’s net-neut­ral­ity plan would hurt the fin­ances of small pro­viders and hamper their abil­ity to ex­pand their ser­vices, the in­dustry rep­res­ent­at­ives said in the meet­ing.

Obama has urged the FCC to re­clas­si­fy broad­band as a “tele­com­mu­nic­a­tions ser­vice” un­der Title II of the Com­mu­nic­a­tions Act, which would grant the agency broad new au­thor­it­ies. Net-neut­ral­ity ad­voc­ates say the step is the only way the FCC can en­act rules that will hold up in court.

The small In­ter­net ser­vice pro­viders warned that the move could also em­power the FCC to en­act oth­er reg­u­la­tions, such as price con­trols.

“We’re big sup­port­ers of net neut­ral­ity,” Ze­man said in an in­ter­view. “Small ISPs don’t have any in­cent­ive or abil­ity to pose a threat to net neut­ral­ity.”

The FCC should con­sider ex­empt­ing small pro­viders from its rules, she ar­gued.

The com­mis­sion is ex­pec­ted to vote on Obama’s plan for net-neut­ral­ity rules on Feb. 26. At the same meet­ing, the FCC is set to con­sider pe­ti­tions to strike down laws in Ten­ness­ee and North Car­o­lina that lim­it the abil­ity of cit­ies to of­fer In­ter­net ser­vice.

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