New 'net neutrality' rules mean conflict, court battles for big telecom

Elections have consequences.

That's the message new Federal Communications Commission Chairman Julius Genachowski will deliver Monday morning during a highly anticipated speech at the Brookings Institution on national broadband policy. Genachowski will outline the Obama's administration's position on "net neutrality," the bitterly contested principle that broadband carriers should not be able to discriminate against legal Internet traffic on their networks.

The proposed FCC rules could mark a major victory for consumers and internet companies, and deal a blow to powerful broadband interests including AT&T, Comcast and Verizon. But Genachowski's speech is merely the opening salvo in what is sure to be a lengthy and contentious conflict.
Genochowski's speech represents the fulfillment of a key Obama campaign promise as well as a marked policy shift beyond the era of George W. Bush, whose FCC essentially let telecom and cable companies dictate -- or at least heavily influence -- broadband policy. The new rules are expected to formalize existing FCC network neutrality "principles," which would bar Internet service providers like Comcast, Time Warner Cable and Verizon, from interfering with or blocking the flow of traffic on their networks.

A commission spokesperson declined to comment ahead of Genchowski's speech, as did representatives for AT&T, Comcast and Verizon. Adoption of new rules strengthening the commission's regulatory power would require several rounds of public comment, and would likely be challenged in federal appellate court.

"The big telecom and cable companies are very worried about this," said Art Brodsky, communications director for Public Knowledge, a pro-net neutrality group. "They don't spread all of that money around Capitol Hill for nothing, you know."

Ben Scott, policy director of Free Press, another pro-net neutrality group, said it would be "a big win for consumers if the FCC delivers strong Net Neutrality rules that apply across all technologies."

Consumer rights groups and internet content companies have long pushed for such rules, which they say are needed to maintain the "open" nature of the internet and to foster innovation. Pro-net neutrality groups have warned that without the rules, giant telecom and cable companies could block or slow down internet content, such as video, that competes with their own broadband offerings, like cable television.

Comsumer groups have warned that without strict net neutrality rules, broadband companies could transform the internet -- today largely free and unfettered -- into a tiered info-highway, with an expensive "fast line" for top-paying customers or content providers, and a cheaper "slow lane" for less important traffic.

Many industry advocates have opposed network neutrality, arguing that telecoms like Comcast should be able to engage in "reasonable network management" for the benefit of all of their users. Such language is expected to be included in Genchowski's proposal, which aims to delineate the rules of the road for broadband network management.

"Having rules in place will bring a degree of certainty that will help both carriers and consumers alike," said Gigi B. Sohn, president and founder of Public Knowledge, in a statement. "Carriers will know what is allowed and what is not; consumers will be relieved to know they will be able to have access to any content and service on a non-discriminatory basis."

In 2005, the FCC -- under the leadership of Kevin Martin, adopted four internet policy "principles" designed to foster net neutrality, as part of the Bush administration's push to deregulate the internet service industry. But Martin was hesitant to actually push for formal rules which would enforce the principles. Net neutrality opponents, including Comcast, have argued that the FCC lacks the legal authority to enforce the principles. They maintain that only Congress can set such binding rules.

The current FCC, led by Genachowski, is expected to announce a fifth principle, which would prohibit broadband providers from discriminating against legal web traffic and services.

Last week, House Commerce Committee Chairman Henry Waxman, a Democrat of Cailfornia, announced he would co-sponsor legislation that would make net neutrality federal law. "I think that the time is right to formally establish, through legislation if required, the rules of the road with respect to net neutrality," said Rep. Waxman, adding, "Industry will benefit from clarity, consistency and predictability with regard to net neutrality."

Ben Scott, of Free Press, welcomed the bill. "There is strong support in Congress, the Administration, and from the public to protect the open Internet -- the time is now to take action and make net neutrality law once and for all," he said in a statement.

With the rapid advance of mobile broadband, the next battlefront is likely to be whether the FCC's network neutrality rules should be extended to wireless networks -- as consumer advocacy groups and internet giants like Google have pushed for -- or whether mobile companies can maintain the ability to discriminate against certain traffic or strike exclusive deals like AT&T's controversial pact with Apple making it the only U.S. carrier allowed to offer the wildly popular device.

"We are concerned about the unintended consequences that net neutrality regulation would have on investments from the very industry that's helping to drive the U.S. economy," said CTIA, the wireless industry group, in a statement.

Pro-network neutrality groups dismiss industry concerns that the new rules would stifle innovation or business activity.

"We are confident that Net Neutrality rules will not hamper investment, as some critics have charged," said Sohn, of Public Knowledge. "Rather, as in the past, they will encourage investment in the kinds of innovation and technology that will help move our economy forward."

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