FTC is neutral on net neutrality

The U.S. Federal Trade Commission is taking the middle ground in the net neutrality debate that pits large telecommunications operators against Internet giants.

In a report on its examination of the net neutrality issue, the FTC on Wednesday didn't urge lawmakers to either pass or kill neutrality legislation but instead recommended that policymakers proceed with caution.

Net neutrality refers to the concept of an open Internet where all content is treated the same way. Net neutrality regulation, backed by companies such as Google and by World Wide Web pioneer Timothy Berners-Lee, would require telecommunications operators to keep their networks neutral. Operators, however, typically argue that such regulations would stifle innovation.

Qwest Communications International and Verizon Communications interpreted the FTC statement as a victory.

"The Federal Trade Commission report confirms that there is no problem to fix," said Tom Tauke, Verizon executive vice president for public affairs, policy and communications, in a statement. "Proposals to impose new regulation actually threaten further advancements in broadband Internet connections."

Qwest issued a similar comment. "Qwest is pleased with the findings of the report released today by the Federal Trade Commission (FTC) that government regulation of the Internet is unnecessary because there is no evidence of market failure or consumer harm," said Gary Lytle, Qwest senior vice president of federal relations, in a statement.

An organization on the other side of the fence, the Open Internet Coalition, was pleased to see that the FTC found that consumers have said they strongly prefer the current open access model. But the group warned that Congress and the Federal Communications Commission must act to protect the open Internet. If policymakers wait until operators begin treating traffic differently, it will be very difficult to return to the current open framework, the group said.

The SavetheInternet.com Coalition took a similar stance. "This is not the time for caution, but rather forward-looking and decisive action reinstating Net Neutrality once and for all," said S. Derek Turner, research director of Free Press, an organization that is part of the SavetheInternet.com Coalition, in a statement.

The FTC said the broadband industry is moving toward more competition. Thus, in the absence of market failure, policy makers should be particularly careful in enacting new regulations. However, some organizations, including the SavetheInternet.com Coalition, argue that competition is weak, with most consumers having at most two operators to choose from. Recent consolidation, such as SBC's acquisition of AT&T, has shrunk the competitive market.

In May, 54 organizations, including Amazon.com and Tivo, called for a national broadband policy that includes net neutrality laws. Google's public policy blog, launched in late May, already includes several entries supporting net neutrality.