October 22, 2009 11:03 AM PDT

FCC sets Internet regulation in motion

by Marguerite Reardon
News.com

http://news.cnet.com/8301-30686_3-10381355-266.html?tag=mncol


The Federal Communications Commission voted unanimously Thursday to get the 
ball rolling on creating regulation that will keep the Internet open.

All five commissioners voted in favor of advancing the rule-making process 
for a proposal that was put forth by FCC Chairman Julius Genachowski during 
the agency's open meeting Thursday.

With three Democrats on the commission, it was no surprise that 
Genachowski, who was appointed by President Obama, would have enough votes 
to push the measure through. But it was somewhat surprising that the two 
Republicans on the commission, who have each expressed disapproval of such 
regulations, also voted in favor of moving the process forward.

Despite their vote in favor of opening the rule-making process, the two 
Republican commissioners, Meredith Attwell Baker and Robert McDowell, also 
said they dissented on "facts" of the proposal. The commissioners said 
their votes are for the beginning of a data-gathering process, but they 
didn't say whether they would vote in favor of regulation that will 
ultimately be proposed.

In her comments, Baker said she didn't think there was a need for specific 
rules because she doesn't see a threat to Internet openness. McDowell said 
he doesn't think the FCC has the legal authority from Congress to impose 
such regulation.

The views of the two Republican commissioners are shared by some large 
Internet service providers. And in the days leading up to the FCC vote, 
debate heated up to a fever pitch with Net neutrality advocates, Internet 
companies (like Google), and venture capitalists all arguing for the need 
for rules to keep the Net open, while broadband service providers lobbied 
against over-reaching regulation.

As a general rule of thumb, broadband providers do not like being 
regulated. But the two biggest phone companies, AT&T and Verizon 
Communications, have conceded that if regulation is to be adopted, they'd 
be fine with it being limited to existing FCC open Internet principles, 
which can be summarized this way: network operators cannot prevent users 
from accessing lawful Internet content, applications, and services of their 
choice, nor can they prohibit users from attaching nonharmful devices to 
the network.

But the companies have taken issue with the newly proposed fifth principle, 
which would prevent Internet access providers from discriminating against 
particular Internet content or applications, while allowing for reasonable 
network management. They have also been concerned with the chairman's 
insistence on applying any new regulation to wireless networks as well as 
wireline networks.

At a high level, it appears that the phone companies got at least some of 
what they had asked for. The proposal that was presented during the FCC 
meeting allowed for "reasonable" network management as part of the 
nondiscrimination principle. Genachowski announced that the commission was 
creating 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." He said this group, 
along with comments from experts in the process, would help the commission 
define "reasonable" network management.

The proposal already identifies blocking child pornography and blocking 
illegal copyrighted content as a legitimate network management. And the 
proposal also allows service providers to manage their networks and create 
new business models built on different tiers of service.

Genachowski's proposal also recognizes that wireless networks have 
different management requirements than wireline networks. And he promised 
that the commission would gather information on how best to craft rules 
that would not hamper innovation in the wireless market.

"Broadband providers must be allowed meaningful latitude to solve the 
difficult challenges of managing their networks and providing their 
customers with a high-quality Internet experience," Genachowski said in his 
statement. "We recognize that there are real congestion and other 
network-management issues, especially with respect to wireless broadband."

This seems to have satisfied Verizon to some degree.

"The Notice of Proposed Rulemaking announced today appears to be a 
substantial improvement from what we understand was in earlier drafts," Tom 
Tauke, executive vice president of public affairs for Verizon, said in a 
statement. "This is a better starting point for the discussion of the 
policies that will govern the Internet."

AT&T's top lobbyist also seemed relieved by what the FCC presented.

"Today's action by the FCC has allayed a number of our concerns, and while 
there are crucial issues remaining, we are encouraged by the Commission's 
action," said Jim Cicconi, senior executive vice president at AT&T. "In 
particular, we appreciate that Chairman Genachowski has demonstrated that 
he is open to the industry's concerns and willing to address those he feels 
have merit."

Comcast, which was reprimanded by the FCC for violating its open Internet 
principles when it was caught throttling Bit Torrent traffic, said it 
doesn't believe regulations are needed, but it also appreciates how the 
process is being handled. Comcast is currently challenging the FCC's 
enforcement authority of its open Internet principles in court.

AT&T and Verizon also said they didn't think regulation was necessary, and 
Verizon's Tauke expressed concern that new regulation could unwittingly 
harm Internet innovation.

"After listening carefully to comments from all of the advocates of 
regulation, one thing remains clear: the Internet ecosystem is serving 
consumers very well, and there is no problem that requires new government 
regulation," Tauke said. "As we engage in this process, we remain concerned 
that the unintended consequences of regulation could bring substantial harm 
to consumers and the ability of the Internet sector to innovate, contribute 
to economic growth and productivity, create new jobs, and deliver social 
benefits to our nation."

As expected, advocacy groups, such as the Open Internet Coalition, Public 
Knowledge, and Free Press, were happy with the vote.

The comment period on the proposal will last 120 days or about six months, 
at which point the FCC's staff will sift through the comments and begin 
crafting the rules that will be debated among and voted on by the five FCC 
commissioners.

--------------------------
Marguerite Reardon has been a CNET News reporter since 2004, covering cell 
phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as 
well as the ongoing consolidation of the phone companies.


=================================================
George Antunes                    Voice (713) 743-3923
Associate Professor               Fax   (713) 743-3927
Political Science                    Internet: antunes at uh dot edu
University of Houston
Houston, TX 77204-3011         

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