Many online firms including Google, Amazon.com, and Facebook have signed a joint letter to the U.S. Federal Communications Commission to oppose a new "net neutrality" plan that would regulate how Internet providers manage Web traffic. The companies warned of "grave consequences" if FCC fails to protect the openness of the Internet.

The letter cites reports that the FCC plans to propose Net neutrality rules next week that will allow cable and phone companies to charge online firms fees to prioritize their traffic on the Internet.

The companies claim that those rules would create a two-tier Internet that penalizes smaller firms and allows companies that are able to pay to offer better services. "If these reports are correct, this represents a grave threat to the Internet," says the letter, addressed to Chairman Tom Wheeler and the other FCC commissioners.

The proposed rules would "enable phone and cable Internet service providers to discriminate both technically and financially against Internet companies and to impose new tolls on them," the letter says.

Instead of permitting "individualized bargaining and discrimination," the FCC should protect users on fixed and mobile platforms against "blocking, discrimination, and paid prioritization." The letter highlights the apps and services created by "American innovators" used around the world, and says tougher rules are needed to ensure America "continues to lead the world in technology markets."

The FCC is expected to officially propose its new rules on May 15, which will be followed by a lengthy approval process.

The FCC insists its rules won't upend fairness of the Internet. ISPs (Internet service providers) won't be able to act in a "commercially unreasonable manner," it says, or block any legal content.