The clear winners from the move would be the giant companies that provide internet access to phones and computers, which have fought for years against broadband regulations. A repeal of the rules would allow the companies to exert more control over the online experiences of American consumers.
Big online companies like Amazon say that the telecom companies would be able to show favoritism to certain web services, by charging for accessing some sites but not others, or by slowing the connection speed to some sites. Small online companies say the proposal would hurt innovation. Only the largest companies, they say, would be able to afford the expense of making sure their sites received preferred treatment.
And consumers, the online companies say, may see their costs go up to get quality access to popular websites like Netflix. The action “represents the end of net neutrality as we know it and defies the will of millions of Americans,” said Michael Beckerman, chief executive of the Internet Association, a lobbying group that represent Google, Facebook, Amazon and other tech firms.
But Mr. Pai said the internet rules were adopted to stop only theoretical harms. He said the old rules limited consumer choice and stifled investment in network expansion and upgrades. He has also argued that the existing internet rules stop internet service companies from experimenting with new business models that could help them compete with online businesses like Netflix, Google and Facebook.
The plan to repeal the existing rules, passed in 2015, also reverses a hallmark decision by the agency to declare broadband as a service as essential as phones and electricity. That move created the legal foundation for the current rules and underscored the importance of high-speed internet service to the nation. It was put in place by Tom Wheeler, an F.C.C. chairman under President Obama. Mr. Pai signaled his intention to dismantle the existing rules in April. The action on Tuesday by Mr. Pai, who was appointed chairman by President Trump, is the centerpiece of a deregulatory agenda that has also stripped television broadcasters, newspapers and telecom companies of a broad range of regulations meant to protect the public interest.
The telecom companies on Tuesday cheered Mr. Pai’s proposal. “The removal of antiquated, restrictive regulations will pave the way for broadband network investment, expansion and upgrades,” said Jonathan Spalter, the chief executive of USTelecom, an industry lobbying group. But consumer advocacy groups and Democratic lawmakers said the move would harm consumers and internet businesses that have relied on the rules to ensure all content is equally available, and to make sure that speech is not stifled by broadband companies putting up barriers to certain internet sites.
Consumer groups say broadband companies have been incredibly profitable under the net neutrality rules and have expanded their networks into new communities and with faster speeds, despite complaints the rules hamper their businesses. “Your internet service provider will be free to make online fast lanes and favor the content of its choice,” said Gigi Sohn, a former senior adviser to Mr. Wheeler at the F.C.C. “That it will take away your control of your internet experience and give it to Comcast, AT&T and Verizon.”