Hurdles remain as FCC ponders Internet data rules

Hurdles remain as FCC ponders Internet data rules (AP)
FILE - In this June 16, 2009 file photo, then Federal Communications Commission Chairman nominee Julius Genachowski testifies on Capitol Hill in Washington. The FCC is set to vote the week of Oct. 19, 2009, on a proposal by the agency's chairman, Julius Genachowski, to begin crafting rules intended to guarantee that Internet users can go to any legal Web site and access any legal online service that they want.(AP Photo/Harry Hamburg, file)

(AP) -- With Democrats in charge in Washington, supporters of so-called "net neutrality" rules seem poised to finally push through requirements that high-speed Internet providers give equal treatment to all data flowing over their networks.

These rules - at the heart of a five-year policy debate - are intended to guarantee that Internet users can go to any Web site and access any online service they want. Phone and cable companies, for instance, wouldn't be able to block subscribers from using cheaper Internet calling services or accessing online video sites that compete with their core businesses.

Yet making that happen is proving thorny - and it's likely that the courts and perhaps even Congress will ultimately get involved.

The is set to vote Thursday on a proposal by the agency's chairman, Julius Genachowski, to begin crafting regulations to prohibit broadband providers from favoring or discriminating against .

Although Genachowski has the support of the other two Democrats on the five-member commission, his proposal has run into strong opposition from the large phone, cable and wireless companies that provide the bulk of U.S. high-speed Internet connections.

Broadband providers such as AT&T Inc., Verizon Communications Inc. and Comcast Corp. argue that after pouring billions of dollars into their networks, they should be able to operate those networks as they see fit. That includes offering premium services over their lines to differentiate themselves from competitors and earn a healthy return on their investments.

Genachowski's proposal has also encountered misgivings among Republicans on the FCC and in Congress, who fear network neutrality rules could discourage broadband providers from continuing to expand and upgrade their systems.

"The risk of regulation really inhibits investment," said Republican Commissioner Robert McDowell. Noting the agency's estimated price tag of up to $350 billion to bring broadband connections to all Americans, he added: "How do we pay for all that?"

One thing everyone agrees on is that the FCC will have to sort through some tricky issues as Genachowski's plan moves forward.

One question is how much flexibility broadband providers should have to keep their networks running smoothly by ensuring that high-bandwidth applications such as YouTube videos don't hog too much capacity and impede other traffic like e-mail and online searches. In other words, when does legitimate network management cross the line to become discrimination?

Lawrence Spiwak, president of the Phoenix Center for Advanced Legal & Economic Policy Studies, a think tank that promotes free-market approaches, fears the FCC could hurt small, rural carriers that face higher costs to build out their systems. Without the ability to manage traffic, he said, these companies could be forced to make expensive network upgrades they cannot afford.

The FCC also needs to sort out how the rules would apply to wireless systems, which have less bandwidth capacity than wire-based networks and might have greater need for traffic management. AT&T, the exclusive U.S. carrier for Apple Inc.'s iPhone, already is running into capacity challenges given the popularity of the gadget and its scores of bandwidth-consuming applications.

"There could be unintended consequences of applying to wireless," said Christopher Guttman-McCabe, vice president of regulatory affairs for CTIA-The Wireless Association, an industry trade group.

Genachowski's plan calls for the agency to formally adopt four broadband principles that have guided the FCC's enforcement of communications laws on a case-by-case basis. Those principles state that network operators must allow subscribers to access all online content, applications, services and devices as long as they are legal.

The FCC relied on those guidelines last year when it ordered Comcast to stop blocking subscribers from using an online file-sharing service called BitTorrent, which is used to transfer large files such as online video. Comcast is challenging the FCC ruling in court.

Genachowski also wants the FCC to adopt two more principles. One would make it clear that broadband providers couldn't discriminate against particular content or applications, either by blocking them completely or by letting other traffic jump ahead in the queue. The other would require providers to disclose network management practices.

He is also seeking to extend all six principles to wireless systems, which have been largely unregulated.

Thursday's vote will launch a proceeding to draft rules based on those principles and open them to public comment. The agency would likely adopt formal regulations by next summer.

Supporters of net neutrality regulations want to prevent broadband companies from becoming online gatekeepers by abusing their control over Internet networks. They warn that a startup like YouTube or Facebook might never have a shot if broadband providers can prioritize their own online services or those of business partners.

"If bandwidth is disproportionately consumed by those who can pay, it would destroy the Internet as a level playing field," said Ben Scott, policy director for the public interest group Free Press.

Colin Crowell, a senior counselor to Genachowski, described regulations as "sensible rules of the road to preserve a free and open Internet, which has been an economic and innovation engine for the nation."

But the service providers, along with many Republicans and even some Democrats in Congress, say the FCC chairman has not shown a need for more regulation given the few known examples of discrimination.

Besides Comcast's actions last year, the other major incident occurred in 2005, when a small telecom company in North Carolina blocked subscribers from accessing Vonage Holding Corp.'s Internet phone service. The company reversed course after the FCC stepped in.

"The FCC has a responsibility to prove a market failure before intervening in the market," said Rep. Cliff Stearns of Florida, the top Republican on the House subcommittee that oversees communications and technology. "I don't think they have proven that."

McDowell, the Republican commissioner, argues that antitrust laws - which aim to prevent companies from abusing their market power - already provide a clear framework to handle such incidents.

Meanwhile, looming over the entire FCC proceeding are questions of jurisdiction. In challenging the BitTorrent ruling, Comcast argued that based on the FCC's deregulation of Internet service in 2002 - a move the Supreme Court upheld three years later - the agency doesn't have authority to mandate nondiscrimination rules.

A decision in the Comcast case is expected next year and if the court rules in the company's favor, it could undermine the net neutrality proceeding at the FCC - forcing the agency to reverse course on deregulation or drawing Congress into the debate.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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User comments

Oct 19, 2009
I think internet must become a basic human right soon, to miss out on all it contains may be a huge disadvantage to others.

Oct 19, 2009
The Federal Communications Commission is set to vote Thursday on a proposal by the agency's chairman, Julius Genachowski, to begin crafting regulations

So they're voting to decide if they're going to vote? I hate lawyers.

... they should be able to operate those networks as they see fit. That includes offering premium services over their lines to differentiate themselves from competitors and earn a healthy return on their investments.

There's no need to differentiate themselves when they are allowed to form local monopolies. The only reason I'm with Comcast is because that's literally my only choice for internet service.

Oct 19, 2009
Ok, I need some help here. Can someone give me information on the pros and cons of net nutrality... not sure which side I should be taking on this one..

Oct 19, 2009
freethinking: The pros of net neutrality is that your service provider won't be able to tell you that you can only download movies, music, and other bandwidth intensive services from them and only them. Time Warner was going to try that in Rochester, NY with a 5 Gb per month maximum on their internet service except for movies and music bought through them. It didn't go over well and Time Warner backed down.

Basically, cable and telephone companies need a way to make more money and don't want you getting movies and making calls without going through them. I don't like monopolies like that. You get much worse service for much more money. They hide behind the idea that it will keep people from illegally downloading data from file sharing networks, but I don't really think that's their primary motivation.

Oct 19, 2009
Ok... fuzz54... what are the cons of net neutrality. Why are so many agaist net neutrality?

Oct 20, 2009
Internet is the ONLY thing in existence that actually gives any REAL form of power to people over governments. Let's not let anyone kill this tool for us.

Oct 21, 2009
The opponents of net neutrality say that, since it will prevent companies from giving preference to their own services, it will impact on their profits so then it will be harder for them to invest in future developments. They say that this will then impact users since the available infrastructure and technology inevitably will not meet all the requirements in the future.

Personally though, I think that although this may have an element of truth, it is more of a silly excuse. Without the FCC regulations companies are much more likely to abuse their privilege of position so that they make huge profits at the expense of the users freedom of choice. These profits will then be simply paid as bonusses to corporate executives.

Oct 22, 2009
Thanks paulthebassguy. Now the question I have is when, were has this been an issue? Has this caused a problem or is this a hypothetical (or future) problem?

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