On 5-0 vote, agency moves ahead in push to regulate Internet

The Federal Communications Commission (FCC) unanimously voted to open a proceeding that could lead to Internet regulations, although the two Republican commissioners dissented on whether rules are warranted.

The approval of the notice to consider net neutrality rules comes after weeks of intense lobbying by the telecom industry and a flurry of letters from members of Congress. Network operators, including AT&T, Verizon and Comcast, say they need the flexibility to manage traffic, while application providers such as Google, Amazon, Skype and Facebook argue service providers should treat all traffic equally.

At the heart of the FCC proposal is a political debate over government regulations, with proponents saying they are needed in cyberspace to even the playing field while opponents say they would deter private investment.

With Thursday’s vote, the five-member panel began the process to move forward with the regulations announced last month by the agency’s chairman, Juilus Genachowski. His proposal would formally codify the FCC’s four existing principles, intended to prevent Internet service providers from giving preferential treatment to certain content and services. He also proposed two additional principles: one to ensure providers do not discriminate between applications; and another to require Internet companies to disclose their network management practices to consumers.

The vote only launches the beginning of the rulemaking process, and companies will have ample time to present their arguments to the FCC. But the agency will face stiff opposition from congressional Republicans, who argue against government intervention. Before the agency could complete its vote, Sen. John McCain (R-Ariz.) introduced legislation to block the FCC from enacting any Internet regulation.

Genachowski had the full support of Democratic Commissioners Michael Copps and Mignon Clyburn, as expected. Republican Commissioners Robert McDowell and Meredith Atwell Baker dissented on the idea that government regulation is needed to keep the Internet open, but supported the beginning of a fact-finding process to learn more about the technical and legal questions surrounding net neutrality.

“We face the dangerous combination of an uncertain legal framework with ongoing as well as emerging challenges to a free and open Internet,” Genachowski said. “Given the potentially huge consequences of having the open Internet diminished through inaction, the time is now to move forward with consideration of fair and reasonable rules of the road, rules that would be enforceable and implemented on a case-by-case basis.”

The draft rules are not perfect or set in stone, he said, but they serve as the basis for the beginning of the process. He also announced the development of a Technical Advisory Process, “so that the difficult engineering questions we face are fully informed by a broad range of engineers based on sound engineering principles and not on politics.”

Copps and Clyburn reiterated their positions that enforceable rules governing the flow of information over the Internet are essential to maintaining an even playing field, where no application or content has an advantage over another.

“Consumers are the deciders of which businesses thrive at the end of the day,” Clyburn said. “That’s what this is about — preventing barriers to entry and ensuring Americans have access to the most useful information.”

McDowell and Baker maintained their position that there is not sufficient evidence that the Internet needs regulation. Still, they both said they were in favor of a lengthy comment period and healthy debate on the issue.

“I do not share the majority’s view that the Internet is showing breaks and cracks and I do not agree the government should be the one to fix it,” McDowell said.

Last year, the FCC found Comcast in violation of its open Internet principles for throttling traffic to peer-to-peer sharing site BitTorrent. Comcast appealed on grounds that the FCC did not have authority to pass the sanctions, and the case is still locked up in court.

In response to Thursday’s vote, network operators AT&T, Verizon and Comcast said they are still concerned about placing regulations on the Internet, but said they are pleased that the draft rules appear to be flexible and that the FCC seems willing to engage in substantive discussions on the issue. Wireless carriers including Sprint Nextel say they are encouraged that Genachowski has said he recognizes the different network management needs between wireline and wireless networks.

On Wednesday evening, Verizon and Google said in a joint statement that, while they differ over whether government action is needed, they are working to find “common ground” in their mutual support of an open Internet.

“We appreciate that Chairman Genachowski has demonstrated that he is open to the industry’s concerns and wiling to address those he feels have merit,” said Jim Cicconi, AT&T’s senior vice president of external and legislative affairs.