(Adds business and consumer group response to vote in

paragraphs 10-11)

    By David Shepardson

       WASHINGTON, April 25 (Reuters) - The U.S. Federal

Communications Commission voted 3-2 on Thursday to reinstate

landmark net neutrality rules and reassume regulatory oversight

of broadband internet rescinded under former President Donald

Trump.

    The commission voted along party lines to finalize a

proposal first advanced in October to reinstate open internet

rules adopted in 2015 and re-establish the commission's

broadband authority.

    FCC Chair Jessica Rosenworcel said the agency "believes

every consumer deserves internet access that is fast, open, and

fair."

        "The last FCC threw this authority away and decided

broadband needed no supervision," she said.

        Net neutrality refers to the principle that internet

service providers should enable access to all content and

applications regardless of the source, and without favoring or

blocking particular products or websites.

    The FCC said it was also using its new authority to order

the U.S. units of China Telecom 0728.HK, China Unicom

0762.HK and China Mobile 0941.HK to discontinue broadband

internet access services in the United States.

    Rosenworcel noted the FCC has taken similar actions against

Chinese telecom companies in the past using existing authority.

    Reinstating the net neutrality rules has been a priority for

President Joe Biden, who signed a July 2021 executive order

encouraging the FCC to reinstate net neutrality rules adopted

under Democratic President Barack Obama.

    Democrats were stymied for nearly three years because they

did not take majority control of the five-member FCC until

October.

    Under Trump, the FCC had argued the net neutrality rules

were unnecessary, blocked innovation and resulted in a decline

in network investment by internet service providers, a

contention disputed by Democrats.

    The U.S. Chamber of Commerce criticized the FCC action

saying it was "imposing a flawed, pre-television era regulatory

structure on broadband" and "will only deter the investments and

innovation necessary to connect all Americans."

        Public interest group Free Press said the vote is a

"major victory for the public interest" saying it "empowers the

FCC to hold companies like AT&T T.N, Comcast CMCSA.O,

Spectrum and Verizon VZ.N accountable for a wide range of

harms to internet users across the United States."

    A group of Republican lawmakers, including House Energy and

Commerce Committee Chair Cathy McMorris Rodgers and Senator Ted

Cruz, called the plan "an illegal power grab that would expose

the broadband industry to an oppressive regulatory regime"

giving the agency and states power to impose rate regulation,

unbundle obligations and tax broadband internet providers.

    Democrats on the FCC say they will not set rate regulations.

    The Computer & Communications Industry Association, whose

members include Amazon.com AMZN.O, Apple AAPL.O, Alphabet

GOOGL.O and Meta Platforms META.O, back net neutrality,

arguing the rules "must be reinstated to preserve open access to

the internet".

    USTelecom, whose members include AT&T T.N, Verizon VZ.N

and others, called reinstating net neutrality "entirely

counterproductive, unnecessary, and an anti-consumer regulatory

distraction".

    Despite the 2017 decision to withdraw the requirement at the

federal level, a dozen states now have net neutrality laws or

regulations in place. Industry groups abandoned legal challenges

to those state requirements in May 2022.

(Reporting by David Shepardson

Editing by William Maclean, Peter Graff and Michael Erman)

((David.Shepardson@thomsonreuters.com; 2028988324;))