The move sets the stage for a crucial vote next month at the Federal Communications Commission that could reshape the entire digital ecosystem.
"The FCC's net neutrality rules are working well for consumers, and we're disappointed in the proposal released today", said Google in a statement. Lawmakers are expected to vote on the repeal of the net neutrality rules on December 14. It is expected to pass, with the GOP controlling three of the commission's five seats.
"Under my proposal, the federal government will stop micromanaging the Internet", Pai said in a statement. "Instead, the FCC would simply require Internet service providers to be transparent about their practices".
Under the measure, internet service providers would have to inform customers about issues including blocking, Politico reported Monday.
"This proposal undoes almost two decades of bipartisan agreement on baseline net neutrality principles that protect Americans' ability to access the entire internet", it said. The Obama-era rule that says all internet traffic has to be treated equally.
"He said the FTC will once again "police" service providers, protect consumers and promote competition like before 2015".
The FCC's plan has sparked outrage across the internet, with numerous businesses, celebrities, Democratic politicians and regular consumers taking to Twitter and other social media outlets to vent about the impending repeal.
Senator Brian Schatz also shared his thoughts on the plan saying, "If adopted, the FCC's plan will change the way every American gets information, watches movies, listens to music, conducts business and talks to their families".
Thanks to the repeal of net neutrality, the average internet user is likely to see their broadband access become more expensive, with their browsing experience likely slowing.
Internet providers welcomed Tuesday's FCC announcement.
Supporters of net neutrality have argued that an end to the regulations will prompt big internet service providers to raise prices for favored, revenue-generating content such as new movies while slowing or eliminating access to less-favored and typically free material.
The FCC received more than 22 million comments.
Matt Wood, policy director for the advocacy group Free Press, likened the proposed system to the way that many companies design their privacy policies.
"The administration is moving to destroy the openness and dynamism of the internet", Pelosi said in an email message. However, Chairman Pai doesn't want the American user to fall for this "fearmongering". Consumers often don't have much choice in which ISP they can use, unlike the choice they have in picking a brand of soda or clothing.
The new FCC may not be a fan of net neutrality rules, but Pai is expecting to face strong fight from the public.