FCC head outlines net neutrality rules

His proposal on net neutrality, which is expected to be approved by the agency’s other two Democratic commissioners, is bad news for Internet and wireless companies that say they need the flexibility to manage their networks.

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The FCC has four guidelines for how Internet service providers can manage their networks, such as prohibiting network operators from blocking access to lawful content or preventing consumers from attaching non-harmful devices to the Internet.

But public interest groups and companies such as Google and Skype have complained that those principles do not go far enough. Key lawmakers, including Reps. Edward Markey (D-Mass.) and Henry Waxman (D-Calif.), have also called for more concise provisions that would ensure consumers could access any service or content on the Web.

Genachowski, speaking at the Brookings Institution, outlined two additional guidelines for providers and proposed that they be adopted by the agency in a formal rulemaking. Under his proposal, broadband providers could not discriminate against particular Internet content or applications, “nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider.”
Internet service providers also would have to disclose network management practices to customers.

“Today, broadband providers have the technical ability to change how the Internet works for millions of users — with profound consequences for those users and content, application and service providers around the world,” he said. “We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation and a vibrant marketplace of ideas.”

Genachowski said his proposals are not intended to bog the Internet down with regulations, but rather to “set the rules of the road to protect and open and free [the] Internet.”

House Speaker Nancy Pelosi (D-Calif.) applauded Genachowski for initiating the rulemaking process.

“With health IT and smart grid technologies, we have seen the profound role that the Internet can play in addressing national issues such as healthcare and climate change,” she said in a statement. “The more the Internet encourages investment, innovation and consumer choice, the more effective it will be to tackle these other challenges.”

Republican lawmakers have strongly cautioned against governmental interference with the Internet. Sen. Kay Bailey Hutchison (R-Texas), ranking member of the Senate Commerce Committee, introduced an amendment to the Interior Appropriations bill that would prohibit the FCC from spending funds to develop and implement new regulatory mandates.

The amendment is co-sponsored by Sens. John Ensign (R-Nev.), Sam Brownback (R-Kan.), David Vitter (R-La.), Jim DeMint (R-S.C.) and John Thune (R-S.D.).

“Even during a severe downturn, America has experienced robust investment and innovation in network performance and online content and applications,” Hutchison said. “For that innovation to continue, we must tread lightly when it comes to new regulations ... The case has simply not been made for what amounts to a significant regulatory intervention into a vibrant marketplace. “

Wireless carriers have taken a similar stance, arguing that imposing net neutrality regulations would stifle innovation and reduce investment. Chris

Gutman-McCabe, vice president of regulatory affairs for the CTIA, the wireless industry’s trade group, said placing requirements on wireless networks discourages companies from investing in their expansion. He also said the rules could have adverse effects on emerging wireless technologies.

“How do the rules apply to the single-purpose Amazon Kindle?” he asked. “How about the efforts from Apple to Android, BlackBerry and Nokia, Firefly and others to differentiate the products and services they develop for consumers? Should all product and service offerings be the same?”

Walter McCormick, president of trade group USTelecom, said he is encouraged that Genachowski said the FCC would address any violations of the principles on a case-by-case basis, but said the proposal may go too far.

“We will proceed with an open mind, but we also believe the bar needs to be set very high when it comes to additional government intervention that could potentially disrupt the tremendous innovation and investment that have defined U.S. broadband for the past several years under the FCC’s existing open-Internet principles.”

But the public interest groups that have been pushing for net neutrality rules for more than three years cheered Genachowski’s announcement. Ben

Scott, policy director for Free Press, called the proposal the “elixir of consumer choice and confidence we’ve been waiting to see.”

Gigi Sohn, president and co-founder of Public Knowledge, pointed out that net neutrality was a key priority of President Barack Obama’s campaign.

“This is not heavy-handed government regulation,” she said. “As the chairman said, his proposal is just the opposite. It lifts the heavy hands of private-sector regulation in favor of openness and freedom.”

Genachowski is expected to set formal plans for the rulemaking process at the FCC’s October meeting.

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There is still some debate over whether the FCC has the authority to adopt such rules. Comcast is fighting an FCC ruling that said the company violated the principles by blocking a video service. Comcast and other service providers argue the FCC did not have legal rights to issue sanctions.

Verizon Vice President of Regulatory Affairs David Young said the company supports an open Internet, but argued that placing formal rules over network operations could lead “to unintended consequences.”

“We certainly don’t want to see the Internet locked in stone as it is today,” he said. “The Internet needs to be free to continue to evolve. … I’m pleased to hear the chairman intends to do only what was needed and not more.”

The FCC also launched www.OpenInternet.gov to allow the public to participate in the rulemaking process.