The FCC has for some time favored Net neutrality in principle, but it has never turned those principles into enforceable rules. But in October, Julius Genachowski, the new chairman of the FCC, proposed to codify the four existing principles and added two more. (Here's a complete list of the six pending rules.)
Most significantly, rule no. 5 says broadband service providers "would be required to treat lawful content, applications, and services in a nondiscriminatory manner." The other new rule would make ISPs disclose relevant information concerning network management and other practices.
It's probably easier to understand what Net neutrality means by looking at its opposite. Suppose AT&T decided that customers who want to reach their Gmail accounts would get slower connection speeds than customers who were using its own U-verse service or its partner's Yahoo Mail. Or what if AT&T had a partnership with say, Amazon.com, and allowed its transactions to move faster than those on the Barnes & Noble site? Talk about anticompetitive. If rule no. 5 takes effect, those scenarios are illegal.
Two years ago, Comcast tried to throttle peer-to-peer networking traffic and backed down only when the FCC started making noises about new rules. Comcast may indeed have been experiencing network issues because of the heavy BitTorrent traffic. But instead of acting openly, it acted like a hacker, using a technique called packet forgery to slow the traffic. Such behavior would be stopped by rule No. 6.
When AT&T, Verizon, and other carriers say they want the Internet to be free and competitive, what they really want to do is maintain the status quo: They want to be free of regulation so that they can set the rules, not let you be free to do what you want. As long as Net neutrality is upheld by unenforceable "principles" instead of actual rules with consequences for violation, life is good -- for them.
At the same time and in the same misleading ads, AT&T trumpets its desire to extend broadband to everyone in the country. Sure, that sounds great, but read the fine print. AT&T is asking asking the government to define broadband as anything over 768Kbps downstream and 200Kbps upstream. That low-speed level hasn't been considered "broadband" in years. Comcast reportedly set the bar even lower, defining broadband as 256Kbps upstream or downstream. So much for VoIP, streaming video, or any new applications that may need relatively high speeds. And did I mention there would likely be a whopping subsidy to carriers that provide this crippled version of "broadband" service?