The relationship between President Obama and Silicon Valley is about to get even more awkward.
Already on the defensive over National Security Agency surveillance techniques, the White House is facing a new revolt from the tech community following a new federal proposal that would redefine how the Internet is regulated.
The Federal Communications Commission on Thursday voted to advance a plan that would potentially allow Internet providers to charge websites for faster service. Though the independent agency will take months to review the policy before its final ruling, Obama is being pressured from web giants to live up to his previous pledges to preserve so-called net neutrality.
The fear in Silicon Valley is that telecommunications companies, such as AT&T and Verizon, will charge Netflix, Facebook and other websites higher rates for better service, essentially creating a “fast lane” and “slow lane” on the Internet -- and potentially passing on costs to consumers.
Obama, who has publicly lamented the Democrats' lack of enthusiasm heading into November's midterm elections, can ill afford to lose any more support among progressives. Some party insiders say his current actions on net neutrality are eroding his standing with those most likely to fill Democrats' campaign coffers.
“Yeah, it's a huge deal,” said one California Democratic strategist. “What we're seeing from the FCC completely undermines everything the president has said on the issue.
“I don’t think they’re going to all start donating to Republicans,” the veteran consultant added of online titans, “but it’s certainly giving them less of a reason to write checks for Democrats.”
Politically speaking, the White House is in a no-win situation. On one side of the net-neutrality issue is Silicon Valley, and on the other are deep-pocketed service providers such as Comcast, which stand to benefit from the FCC's proposal.
Obama last week traveled to Silicon Valley for fundraisers, even as the CEOs of those companies were raising concerns about the FCC’s plan.
So far, the White House has reminded critics that the FCC is an independent agency and insisted the president’s commitment to an open Internet has not wavered.
“We will be watching closely as the process moves forward in hopes that the final rule stays true to the spirit of net neutrality,” White House press secretary Jay Carney said Thursday. “The president is looking at every way to protect a free and open Internet, and will consider any option that might make sense.”
However, others said Obama needed to do more to clarify his stance on a FCC proposal they believe will harm Internet users.
“We’re surprised by his silence, given every indication that the rule being proposed would allow the kind of pay-for-prioritization practices Obama spoke against in the past,” said Timothy Karr, senior director of strategy for Free Press, a Washington-based media and technology public interest group.
“[Obama] said he had full confidence in his [FCC] chairman to propose a new rule that represented his support for net neutrality,” Karr added. “This proposal decides what sorts of sites and services succeed and which ones fail.”
As a presidential candidate, Obama left himself little wiggle room on the issue of net neutrality.
“What you've been seeing is some lobbying that says that the servers and the various portals through which you're getting information over the Internet should be able to be gatekeepers and to charge different rates to different websites,” he said in Iowa in 2007. “And that I think destroys one of the best things about the Internet -- which is that there is this incredible equality there."
The question now becomes whether Obama will address the issue more forcefully in the face of growing complaints from the tech industry.
Under the FCC proposal, the government will examine whether broadband Internet should be regulated as a public utility. Consumer advocates have long pushed for such a measure.
However, most of Silicon Valley was dubious of the FCC's attempt to downplay the controversy.
And Obama won't receive political cover from his Democratic allies if early reactions to the proposal are any indication.
“Today's vote,” said Sen. Al Franken, D-Minn., “could spell the beginning of the end of the Internet as we know it, plain and simple.”