ROBERT SIEGEL, HOST:
As President Obama was talking last night about further improving the U.S. economy, he nodded to the role the Internet plays in the economic development.
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PRESIDENT BARACK OBAMA: I intend to protect a free and open Internet, extend its reach to every classroom and every community and help folks build the fastest networks.
SIEGEL: Those seem like goals everyone can support, but there's deep disagreement over how to achieve them, and those few words hint at looming clashes between the White House and the big phone and cable companies. Here's NPR's Joel Rose.
JOEL ROSE, BYLINE: President Obama has picked a couple of fights with the powerful telecom industry lately. Last week, he traveled to Iowa to show his support for municipal broadband.
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OBAMA: Hello, Cedar Falls.
ROSE: Twenty years ago, Cedar Falls, Iowa, decided to build its own high-speed internet network, which is now among the fastest in the country. There are towns that would like to do the same because their other broadband options are too slow or too expensive or simply don't exist. But some cities find themselves blocked by state laws.
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OBAMA: In too many places across America, some big companies are doing everything they can to keep out competitors. Today in 19 states we've got laws on the books that stamp out competition.
ROSE: The president is urging the Federal Communications Commission to preempt state laws that restrict municipal broadband, but not everyone thinks the commission has the legal authority to do that.
BERIN SZOKA: That's a complete legal fantasy.
ROSE: Berin Szoka is president of TechFreedom, a market-oriented think tank in Washington. He says President Obama's speech in Iowa was a missed opportunity to encourage more private investment in broadband networks.
SZOKA: And instead not only did he call for government-run broadband as the first answer, he called for the FCC to do something that is unconstitutional that is going to lose in court.
ROSE: The president's supporters and at least one federal judge would dispute that. What the FCC can or cannot do is a hot topic these days. The fight over municipal broadband is just the beginning. The main event is the battle over open Internet rules. The president is urging the Commission to protect the the principle of net neutrality, the idea that Internet service providers should treat all of the traffic on their pipes equally. He's asking the FCC to do it in the strongest possible way.
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CONGRESSMAN GREG WALDEN: The commission is preparing to invoke net neutrality's nuclear option.
ROSE: Congressman Greg Walden is a Republican from Oregon. He's also the chair of the House subcommittee on communications and technology, which held a hearing today on its own plan to protect the open Internet. Walden and others think it would be a mistake for the FCC to reclassify broadband as a communications service like the federally regulated telephone companies. Michael Powell is a lobbyist for the cable TV industry. He says that kind of heavy-handed approach could lead to less investment.
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MICHAEL POWELL: We want every American to have access to Internet, and we're impatient about that. It's simply common sense to understand, increasing regulatory cost, increasing uncertainty, certainly will slow the magnitude or the pace.
ROSE: Powell says it's Congress, not the FCC, that should write new rules of the road for the Internet. Republicans on the subcommittee offered some. They say their proposal would, among other things, prevent broadband providers from charging Internet companies more for special fast lanes. But Chad Dickerson, the CEO of the online marketplace Etsy, testified that the proposal is full of loopholes.
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CHAD DICKERSON: Etsy is a low-margin business. We couldn't afford to pay for priority access to consumers, yet we know that delays of even milliseconds have a direct and long-term impact on revenue.
ROSE: Critics of the draft rules think their real intent is to strip the FCC of its power to regulate broadband providers. Democrat Anna Eshoo of California is the subcommittee's ranking member.
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CONGRESSMAN ANNA ESHOO: What is abundantly clear in the majority's proposal is to purposely tie the hands of the FCC by prohibiting them from reclassifying broadband.
ROSE: Reclassification is what the president wants, and it's what the FCC is expected to vote on next month. Joel Rose, NPR News, New York.