As expected, the Federal Communications Commission voted along party lines 3-to-2 to approve Chairman Ajit Pai's Restoring Internet Freedom proposal, which rolls back the 2015 Obama-administration ruling on net neutrality that Pai says overreached. 

"The internet wasn't broken in 2015; we were not living in some digital dystopia," Pai said on Thursday before the vote. "Not only was there not a problem, this solution hasn't worked."

The debate over Pai's proposal, dubbed Restoring Internet Freedom, has been intense. Pai even had to take a brief recess at the request of FCC security. The Commission did not explain the reason for the recess; however, reports said that Homeland Security officers with bomb-sniffing dogs entered the meeting room. 

Pai's rules undo prohibitions against throttling traffic or setting up fast lanes that give priority to some traffic. It also kills a "general conduct" clause that gave the FCC broad ability to review ISPs behavior. 

On a more technical note, Pai's rule reclassifies broadband as an information service, and thus under Title I of the Communications Act of 1996, rather than as a telecommunications service, under Title II of the Act. Previous FCC Chairman Tom Wheeler had classified broadband as a telecom service to strengthen the Commission's authority over broadband and its ability to prevent blocking or throttling. 

In a statement, Comcast (CMCSA)  said the vote returns the internet "to a regulatory environment that allowed the Internet to thrive for decades by eliminating burdensome Title II regulations and opening the door for increased investment and digital innovation." 

Stocks of broadband providers were mixed following the vote. Comcast gained 1.8% to $39.26. However, AT&T (T) dropped 0.3% to $37.92, Verizon (VZ) fell 0.7% to $52.49 and Charter Communications (CHTR) declined 0.4% to $350.28.

The repeal of net neutrality has faced significant opposition from consumer groups.
The repeal of net neutrality has faced significant opposition from consumer groups.

Democratic Commissioner Mignon Clyburn, in her dissent, said the ruling equated to the FCC "[pulling out] its own teeth, abdicating responsibility to protect the nation's broadband consumers," at the meeting. 

Under Pai's rules, the Federal Trade Commission will now take the lead in policing ISPs.

Clyburn said "a Cheshire cat version of net neutrality" remains, in which "all that is left is a broadband provider's toothy grin and those oh so comforting words: we have every incentive to do the right thing."

Pai called the rhetoric of net neutrality proponents "apocalyptic" and unfounded, and said that lessening the regulations on ISPs would increase investment in broadband. 

Republican Commissioner Michael O'Reilly said that many of the public comments on the proposal were "simply obscenity-laced tirades," noting that one even said he looked like a potato. 

"The legend of a cable company trying to break the internet may make a scary bedtime story for the children of telecom geeks, but it isn't reality," O'Reilly said. 

Comcast is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells CMCSA? Learn more now.

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