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After losing a court case last month at the DC Court of Appeals the Federal Communications Commission is planning to issue a new set of rules for Net Neutrality. Though the court claimed Net Neutrality rules the FCC had previously offered were illegal, it did acknowledge the FCC’s authority to regulate broadband company practices under a section of the 1996 Telecommunications Act.

The FCC says it will not challenge the court ruling but will instead use a section of the Telecommunications Act to propose new rules this year.

“The FCC must stand strongly behind its responsibility to oversee the public interest standard and ensure that the Internet remains open and fair,” FCC Chairman Tom Wheeler said in a statement. “The Internet is and must remain the greatest engine of free expression, innovation, economic growth and opportunity the world has ever known.”

The court said in January that the FCC could impose a “no blocking” rule if it found a different legal justification. Mr. Wheeler’s statement indicates the FCC will do just that, by establishing a minimum standard for how broadband companies treat content. The rules would likely outline expectations and unacceptable practices for broadband providers, and provide for case-by-case enforcement when websites complain of unfair discrimination.

Despite the FCC Chairman’s stated commitment to regulating the broadband providers in order to stop them from withholding content many reformers are crying foul.

The best way for the FCC to regulate the internet according to many public interest advocates is for the FCC to classify broadband as a public utility as many other countries have done. This would give the FCC broader powers that would also likely fare better in court.

Andy Schwartzman, a telecom lawyer and adviser to the anti-media consolidation group Free Press, said not reclassifying broadband “would be repeating the biggest mistake” made during prior efforts by former FCC Chairman Julius Genachowski.

Broadband providers have argued that reclassification would be disastrous for the industry because it would subject them to regulations designed for the landline phone system. “We think reclassification would probably be the ultimate death of the broadband market,” Comcast Executive Vice President David Cohen said in an interview last week. “We think it would dry up private investment and destroy all the gains made in the broadband market in the U.S.”

It is worth noting that classifying broadband as a public utility is not completely off the table but given industry opposition and the FCC’s cowardice so far it seems less and less likely.

Comcast’s claim that making broadband a public utility would “prevent investment” is ironic for a number of reasons, first and probably foremost being that America has one of the most primitive and underdeveloped broadband systems in the developed world. This is partly the fault of telcom monopolies like Comcast which suck out capital to pay executives profits instead of reinvesting revenue to further develop broadband infrastructure.

If the internet is as vital and important as FCC Chairman Wheeler says, there’s no good reason for it not to be a public utility.