Internet providers welcomed Tuesday's FCC announcement.
"In the absence of a market failure, the constitution doesn't permit the FCC to treat the information superhighway or any other institution of the press like a public utility", Fred Campbell, director of the think tank Tech Knowledge, said in a statement.
"This proposal undoes almost two decades of bipartisan agreement on baseline net neutrality principles that protect Americans' ability to access the entire internet", Michael Beckerman, president and CEO of the Internet Association, said in a statement.
NCTA-the Internet & Television Association, a trade group with members including top US cable provider Comcast and No. 2 Charter Communications Inc., said it welcomed Pai's proposal.
"Strong net neutrality rules are vital to consumers' everyday lives and essential to preserving the internet as we know it today - an open marketplace where websites large and small compete on equal terms and where information and ideas move freely", said Jonathan Schwantes, the advocacy group's senior policy counsel.
"This is ridiculous and offensive to the millions of Americans who use the internet every day", said FCC Commissioner Jessica Rosenworcel, a Democrat.
One major beneficiary of the rule-change may be AT&T, which is embroiled in a landmark legal dispute with the Justice Department over an $85 billion purchase of the entertainment conglomerate Time Warner. Gutting net neutrality will have a devastating effect on free speech online. A vote on the proposal is set for December 14.
Terrell McSweeny tweeted "So many things wrong here, like even if @FCC does this @FTC still won't have jurisdiction".
"The administration is moving to destroy the openness and dynamism of the internet", Pelosi said in an email message.
FCC Chairman Ajit Pai circulates a draft of a rulemaking to consider retaining, modifying or eliminating the cap that, with the restoration of the UHF discount earlier this year, now enables TV station groups to reach as many as 78% of TV homes. "We agree that internet users should have the freedom to go anywhere on the internet or to run any application with confidence that internet traffic will in no way be blocked or throttled", the organization said in a statement.
The FCC's proposal puts additional pressure on Capitol Hill, where some lawmakers have called for federal legislation that would supersede any FCC rules.
Pai said his plan would return to a "light-touch regulatory approach" which has allowed the internet to flourish. In its latest proposal, the commission is ready to reduce its own powers that ensure that internet providers don't block or interfere with the web traffic. Those who criticize the rules say undoing them is good for investment in broadband networks.