Henry Waxman, the chair of the House Energy and Commerce Committee, just released a statement announcing that he would drop controversial net neutrality legislation, and call on the FCC to use their authority to reclassify broadband as a telecommunications service. This is a major victory for net neutrality advocates and a loss for the telecoms.

Waxman had been negotiating with industry groups on what he called an “interim measure,” with a sunset date of 2012, that would have mirrored the noxious Google-Verizon policy of differentiating between the wireline and the wireless Internet, while not extending anti-discrimination protections to the wireless sphere. Open-internet advocates had grown restless in recent days about the legislation, which would have delayed the ability for the FCC to reclassify broadband for two years and also capped fines for non-compliance at $2 million dollars.

Waxman frames his decision to scrap the proposal as necessary because he could not secure bipartisan support for a broad solution:

This legislative initiative was predicated on going forward only if we had full bipartisan support in our Committee. We included the Republican staff in our deliberations and made clear that we were prepared to introduce our compromise legislation if we received the backing of Ranking Member Barton and Ranking Member Stearns.

With great regret, I must report that Ranking Member Barton has informed me that support for this legislation will not be forthcoming at this time.

This development is a loss for consumers and a gain only for the extremes. We need to break the deadlock on net neutrality so that we can focus on building the most open and robust Internet possible.

I do not close the door on moving legislation this Congress. Cooler heads may prevail after the elections. But I want my position to be clear: my goal is the best outcome for consumers. If our efforts to find bipartisan consensus fail, the FCC should move forward under Title II. The bottom line is that we must protect the open Internet. If Congress can’t act, the FCC must.

You can dream up whatever motivations you want for Waxman’s actions – and Joe Barton’s – but the point is that Congress will not give the FCC cover anymore. And the leading members of the President’s party advises the head of the main regulatory agency for the Internet to reclassify. That’s the key here.

I certainly raised the alarm about Waxman’s proposal, and I’m glad it failed. I guess I’m on one of the “extremes” with my extreme views that telecom companies shouldn’t be allowed to set up toll booths and privilege content on the Internet. But ultimately, I want the same thing Waxman wants – for the FCC to be empowered to do its job and protect both consumers and content producers. If Julius Genachowski had no reason to delay action before, he really has no reason now.