Internet trade group calls for self-regulation

The US Internet Industry Association hopes to beat the government to the punch

An Internet-focused trade group has called for the industry to establish its own customer-rights code before the U.S. Congress steps in.

The US Internet Industry Association (USIIA), a Washington, D.C., trade group with more than 200 members, on Thursday called on Internet service providers to allow their customers to access the applications and content of their choice, as long as both are legal, and to acknowledge that their customers have a right to services needed to protect their Internet service against unwanted content such as spam and spyware.

Self-regulation could head off some calls for a U.S. law that would establish online consumer rights, said David McClure, USIIA president and chief executive officer. "It's time for industry to step up to the plate and access a self-governing mechanism, so that Congress and the FCC don't have to," he added.

The U.S. Federal Communications Commission (FCC) voted earlier this month to end rules requiring large incumbent telecommunications carriers to share their DSL (Digital Subscriber Line) networks at a discounted rate with competitors, matching long-time cable modem rules. As the FCC deregulates broadband, Internet companies need to form a self-regulating industry board, similar to ones that police lawyers and accountants, McClure said.

USIIA's white paper, "Principles for Broadband and IP (Internet Protocol) Services," builds on a group of consumer rights endorsed by the FCC earlier this month. Although the FCC didn't mandate the rights, it called on Internet providers to allow consumers the freedom to access the legal content of their choice, to run the applications and services they want and to connect to their choice of legal devices, as long as they do not harm the network.

The FCC has long endorsed consumer rights to access legal content and use applications they choose over broadband networks, with those rights sometimes called 'Net neutrality. But some lawmakers, consumer groups, as well as VOIP (voice over IP) provider Vonage Holdings Corp. have called for a law outlining those rights.

Three broadband providers have tried to restrict or block their customers from using Vonage, said Jeffrey Citron, Vonage's chief executive officer. In March, the FCC settled a case with North Carolina broadband provider Madison River Communications LLC, which agreed to pay US$15,000 and stop blocking Vonage.

The two other cases aren't resolved, and with the FCC's recent DSL deregulation ruling, the FCC may no longer have the authority to fine broadband providers that block VOIP or other services, Citron said Tuesday at a Progress and Freedom Foundation event in Aspen, Colorado. More broadband providers looking to offer their own VOIP service will try to block independent services like Vonage, Citron predicted.

"It's just a matter of time," Citron said. "Is that really the principle we want in this country, where the operator of the service is excluding competitors?"

But some broadband providers, including USIIA member Verizon Communications Inc., say a law isn't needed, because it's not in the best interest of providers to restrict their customers. Customers who can't get to Web sites or services they want will ditch their providers and look elsewhere, said Peter Davidson, Verizon's senior vice president for federal government relations.

Davidson, also speaking at the Aspen event, suggested the problem is limited. "Are you going to dream up all of the problems that might happen out there and regulate in advance of that?" he said. "Our approach would be that there would be a commitment [providers] would follow."

'Net neutrality legislation could also prevent broadband providers from trying cut off bandwidth hogs or spammers, added Kyle McSlarrow, president and chief executive officer of the National Cable & Telecommunications Association. "The fact is people can go anywhere on the Web, and they can do it today," he said.

Early this month, U.S. Representative Rick Boucher, a Virginia Democrat, called on Congress to include 'Net neutrality rules in a telecommunications reform package likely to be discussed later this year. "The absence of a binding statute codifying the principles of 'Net neutrality leaves a significant gap in our regulatory structure, which will undoubtedly be exploited again by companies seeking to gain an inappropriate competitive advantage," he said then.

The FCC's Madison River investigation was an example of regulatory inefficiency because the agency spent tens of thousands of dollars to obtain the $15,000 settlement, said USIIA's McClure. "For too many years, the industry has engaged in a self-defeating system of using the government to resolve minor marketing disputes," he added.

'Net neutrality legislation would "prevent hypothetical threats that may never materialize," McClure said.

USIIA's principles include five consumer rights and five network provider rights. The network provider section includes the right to interconnect with other providers through commercial agreements and the right to offer proprietary services to their customers, as long as the provision of such services does not interfere with the customer's right to access content and run applications of their choice.

Copyright © 2005 IDG Communications, Inc.