Federal Communications Commission Chairman Tom Wheeler on Wednesday proposed a net neutrality policy that would reclassify broadband as a public utility. Obama has championed the rules, which would stop cable companies from restricting access to certain data and prioritizing content based on payment.
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The rules would fall under Title II regulation, which Pai argued was made to protect against monopolies. The FCC's five commissioners will vote on the proposal in the next few weeks.
Pai believes politics have pressured the agency into addressing a "problem that doesn't exist." He called the proposed regulation "heavy handed," adding that it would add barriers for Internet entrepreneurs.
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However, the wireless industry, which has been governed under Title II rules for more than 20 years, has supported an investment and competition, an FCC spokesman told CNBC. He added that cable stocks moved broadly higher on Wednesday, showing a positive reaction to the proposal's effect on business.
(Disclosure: CNBC is a unit of NBC Universal, whose parent company is Comcast Corp)