FCC Chairman Plans Net Neutrality Mandate

Published September 29, 2009

Federal Communications Commission Chairman Julius Genachowski will seek to give “net neutrality” guidelines the force of law by making it an official rule the broadband and wireless industries must follow. In response, six Republican senators are moving legislation to prevent it.

In a highly anticipated speech at the Brookings Institution in Washington, DC, Genachowski said in September it was vital to set “rules of the road to protect a free and open Internet.” To achieve that end, the FCC will serve as “a smart cop on the beat” and direct how Internet service providers (ISPs) manage their networks, he said.

“This is not about government regulation of the Internet,” Genachowski said. “It’s about fair rules of the road for companies that control access to the Internet. We will do as much as we need to do, and no more, to ensure that the Internet remains an unfettered platform for competition, creativity, and entrepreneurial activity.”

Changing the Rules

Ken Ferree, president of the Progress & Freedom Foundation in Washington, DC, says Genachowski’s proposal is “almost certainly beyond the FCC’s statutory jurisdiction” and will harm the Internet economy.

“I find myself at a loss to understand why the administration wants to start meddling with a sector of the economy that, despite a challenging macroeconomic environment, is performing pretty well by any rational standard,” Ferree said in a statement after the speech. “What exactly is the problem they are trying to remedy?

“Should they perhaps wait until they have a ‘broadband plan’ in place before they start changing the rules of the road for the market? It’s almost as if they are trying to turn a story of success into one of failure,” Ferree said.

New Principles

Genachowski said he’d “soon” open public comment for a rulemaking FCC session most observers expect to be held before the end of the year. The chairman wants to codify four principles of net neutrality and add two more.

The four original principles, which the FCC endorsed in 2005, say network operators cannot prevent users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

The two new principles Genachowski wants to make a formal rule are:

* Nondiscrimination—meaning broadband providers cannot treat particular Internet content or applications differently from others.

* Transparency—meaning ISPs must be transparent about their network management practices. This is in response to a controversial case the FCC examined last year when Comcast slowed the connections of some peer-to-peer users without notifying them.

Net Neutrality Fans Happy

Gigi B. Sohn, president and cofounder of Public Knowledge, a Washington, DC-based group that has long pushed for net neutrality principles to be made law, called the FCC chairman’s announcement “a very welcome development, and years past due.”

Net neutrality advocates have been pushing for years for either the FCC or Congress to prevent ISPs from periodically slowing down a small number of “bandwidth hogs” who can degrade the Internet experience of ordinary customers, or charging more for heavy use.

The rise of video streaming in the past few years has expanded the use of high-bandwidth applications to the general Internet population, and ISPs say they need to retain the freedom to manage their networks to handle the ever-increasing load.

Need for Protection Questioned

Jeff Kagan, a telecom and wireless analyst based in Atlanta, noted, “which side you are on seems to depend on your politics.” He wonders what real harms befall Internet users that warrant government intervention.

“The question is: Do we need the FCC or Congress to protect us? Is there a real problem that has to be fixed with regulation, or can it be handled by the free market?” Kagan asked.

“Free-market solutions are always best if they work. Regulation is always a double-sided coin, like a prescription. It may help with the problem, but it may also have side effects,” Kagan added.

Micromanaging Decisions

Steven Titch, a telecom and IT policy analyst at the Los Angeles-based Reason Foundation, says net neutrality principles are largely accepted by the technology industry. But the innovation we all take for granted could be harmed if net neutrality becomes the law of the land—either through FCC rules or legislation.

“The FCC currently has a net neutrality policy that it likes,” Titch said. “It does not include charging more for making applications quicker. They can’t block Web sites. [Former FCC Chairman] Kevin Martin fined Comcast over net neutrality issues.

“This new [proposal] would prohibit any type of differential network status,” Titch added. “That’s a big problem because then you’re getting into regulating the business of the Internet.”

Republicans Move to Block

Just hours after Genachowski’s speech, Sen. Kay Bailey Hutchison (R-TX) attached an amendment to a pending Interior Department spending bill that would stop the FCC from imposing the net neutrality rules through the end of 2010.

Five other Republican senators cosponsored the amendment: Sam Brownback of Kansas, Jim DeMint of South Carolina, John Ensign of Nevada, David Vitter of Louisiana, and John Thune of South Dakota.

“We must tread lightly when it comes to new regulations,” Hutchison said in a statement. “Where there have been a handful of questionable actions in the past on the part of a few companies, the commission and the marketplace have responded swiftly. The case has simply not been made for what amounts to a significant regulatory intervention into a vibrant marketplace.”

Phil Britt ([email protected]) writes from South Holland, Illinois. James G. Lakely ([email protected]) is co-director of The Heartland Institute’s Center on the Digital Economy and managing editor of InfoTech & Telecom News.