U.S. FCC raises schools' Internet subsidy amid net neutrality protests

By Alina Selyukh WASHINGTON (Reuters) - U.S. communications regulators on Thursday held the year's last public meeting, where they voted to increase the largest U.S. education technology subsidy and protesters interrupted with calls for stricter regulations for Internet service providers. The Federal Communications Commission voted 3-2 to raise funding for the E-Rate program, which helps connect schools and public libraries to high-speed Internet by $1.5 billion to $3.9 billion. But the meeting was overshadowed by another issue that has become a focal point for the FCC's work this year: the rules the agency will set to regulate Internet service providers, or ISPs, aimed at ensuring they do not discriminate against any content in ways harmful to competition or consumers. The FCC had been expected to set new rules before the end of the year but the process was delayed after President Barack Obama stepped in. Obama last month urged the FCC to set the strictest rules possible to protect net neutrality, the principle that all Internet traffic should be treated equally. Moreover, he specifically suggested a legal pathway long promoted by consumer advocacy groups that would reclassify Internet service so it could be regulated like a utility. ISPs vehemently oppose the idea, and some experts argue it may not ultimately prevent so-called paid prioritization deals, where ISPs could charge content companies to ensure smooth and reliable delivery of their traffic. One protester on Thursday shouted, "We're sorry we're interrupting your meeting but this is a very important issue for the American people. We want the Internet kept neutral." He was escorted out of the meeting after helping unfurl a "Reclassify now!" flag behind the dais holding five FCC commissioners. FCC Chairman Tom Wheeler responded, "There are a lot of students here in the audience right now, you've just seen the First Amendment at work." Ignoring several such disruptions, Democratic FCC commissioners voted to lift the years-old $2.4 billion cap on the E-Rate subsidy program's budget. Republicans dissented over the way the program's finances are structured and allocated, calling for more reforms. E-Rate is funded through fees Americans pay on their telephone bills. The FCC has estimated that the bigger budget means an increase of 16 cents a month, or $1.92 a year, per telephone line. E-Rate, created in 1996, has helped connect many classrooms and public libraries to the Internet, but some, especially in rural and low-income urban areas, remain without access to high-speed connections. (Editing by Jonathan Oatis)