FCC moves toward Net neutrality rules despite opposition

The agency votes to open a Net neutrality rulemaking process following a contentious debate on whether new regulations are needed

The U.S. Federal Communications Commission has taken the first step toward creating formal Net neutrality rules, despite a huge lobbying effort from opposing groups in recent days.

The FCC voted Thursday to open a rulemaking process and begin receiving comments on a proposal to create new Net neutrality rules following a contentious debate on whether new regulations are needed.

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The FCC is still months away from voting on the final regulations, but the rules, as proposed, would allow Web users to run the legal applications and access the legal Web sites of their choice, while prohibiting broadband providers from selectively blocking or slowing Web content. Providers could use "reasonable" network management to reduce congestion and maintain quality of service, but the rules would require them to be transparent with consumers about their efforts.

Under the FCC proposal, wireless broadband services would be included in the Net neutrality rules. The FCC will seek comments on how to treat managed network services.

The rules are necessary to protect innovation on the Internet and preserve the openness that has allowed the Internet to blossom, said FCC Chairman Julius Genachowski.

"The problem is not merely that we've seen some significant situations where broadband providers have degraded the data streams of popular lawful services and blocked consumer access to lawful applications," he said. "The heart of the problem is that ... we face the dangerous combination of an uncertain legal framework with ongoing as well as emerging challenges to a free and open Internet.

"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," he added.

But Commissioner Robert McDowell suggested the Internet has seen massive growth because of a lack of regulations. The proposed rules regulate network providers, but not Web applications vendors, while supporters assume new innovation will come from applications and not networks, he said.

"The Internet is perhaps the greatest deregulatory success story of all time," said McDowell, a Republican. "No government has ever succeeded in mandating innovation and investment."

New rules could inadvertently hurt the growth of the Internet and give a precedent to other nations that want to create all kinds of new Internet regulations, McDowell added. But he praised Genachowski for creating an open and collegial rulemaking process.

Net neutrality advocates began pressing hard for new rules in 2005, after the FCC phased out rules requiring traditional telecom carriers to share their broadband networks with competitors. That same year, the FCC approved four informal Net neutrality principles, but broadband provider Comcast, in a lawsuit, has challenged the FCC's authority to enforce those principles.

Net neutrality advocates argue that formal regulations are needed because broadband providers could decide to block or slow some Web sites or applications in favor of others. Since the FCC deregulated network sharing rules in 2005, Web users have few choices for broadband providers and not many options for alternative service if their providers start blocking some Web content, Net neutrality advocates say.

But opponents of Net neutrality say new rules aren't needed. The FCC has taken action against broadband providers in just two cases, including one in which Comcast was accused of widespread slowing of the BitTorrent peer-to-peer service. New regulations could slow or halt new broadband investment, making it difficult to meet President Barack Obama's goal of bringing broadband to all U.S. residents, opponents say.

In addition to opposition from large broadband providers AT&T and Verizon Communications, a group of about 90 U.S. lawmakers raised concerns about new regulations in the past week. In addition, 44 telecom-related companies, including Cisco Systems, Alcatel-Lucent, Motorola and Nokia, wrote a letter to the FCC opposing new rules, as well as several minority groups concerned about the effect on broadband deployment.

On the other side are 28 digital rights and consumer groups, including Free Press and Public Knowledge, Internet pioneers including Vint Cerf and David Reed, and top executives of Web-based companies, including Google, Amazon.com, eBay, and Facebook.

On Wednesday, 30 tech-focused venture capitalists sent a letter to the FCC supporting new rules, and this week, more than 20,000 U.S. residents have signed a letter calling for Net neutrality rules, according to Save the Internet, a pro-Net neutrality group.

Obama and Genachowski, both Democrats, have both said Net neutrality rules are among their top tech priorities. Genachowski said the rules as proposed are not perfect or set in stone.

But FCC member Meredith Attwell Baker, a Republican, questioned whether the FCC has the authority to regulate broadband, even though she said the rulemaking process presents "thoughtful" questions about Internet freedoms.

New rules could hamper innovation from broadband providers and slow the jobs created through the Internet, she said. "I don't want to get in the way of that," she added. "If innovation and investment are confined to the corners of the Internet, consumers will suffer."

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