'Heavy-handed' Internet rules hurt US: FCC's Pai

Internet regulation endorsed by the Obama administration would hinder innovation and increase costs for consumers, an FCC commissioner said on Thursday.

"I'm opposed to President Obama's plan for Internet regulation precisely because it is going to make for slower broadband for Americans, will increase their Internet bills and ultimately will reduce competition and innovation in the broadband marketplace," Commissioner Ajit Pai told CNBC's "Squawk Alley."

Ajit Pai, Federal Communications Commission
Andrew Harrer | Bloomberg | Getty Images
Ajit Pai, Federal Communications Commission

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.

Read MoreFCC boss plans sweeping new net neutrality rules

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.

Read MoreFCC changes broadband definition to 25 Mbps

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)