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FCC Approves Net Neutrality Rules

21 Dec, 2010 By: Chris Tribbey

In a 3-2 vote along party lines, the Federal Communications Commission Dec. 21 approved Internet neutrality rules that will force Internet service providers, or ISPs, to treat all Web content equally, prohibiting the blocking of lawful content, applications, services and the connection of devices to networks.

The three Democrats on the commission voted for the rules, which were a campaign promise by President Barack Obama, while the two Republicans voted against them, calling it unnecessary regulation.

“For the first time, we are adopting rules to preserve basic Internet values," FCC chairman Julius Genachowski said, adding that the regulations will prevent broadband providers from keeping their customers from accessing what they want online.

More than a year in the making, the rules prohibit ISPs from discriminating against services from rival companies or any type of legal content. The rules do give broadband providers the ability to address network congestion, but they must share their practices with the public. The FCC decision also establishes an Open Internet Advisory Committee that will monitor enforcement of the rules.

“We can not afford allowing special interests to regulate the awesome opportunity creating power of the open Internet,” said commissioner Michael Copps, who voted for the rules. “Today we finally try to patch the hole left by the Comcast decision.”

Comcast, the No. 1 cable operator in America, has been at the center of the Net neutrality debate since late 2007, when it was accused of slowing BitTorrent traffic for its broadband customers. The FCC ordered Comcast to stop blocking peer-to-peer traffic in mid-2008; however, an appeals court overturned that decision earlier this year, saying the commission had no mandate to do so.

“In 2008 the FCC tried to reach beyond its legal authority to regulate the Internet, and it was slapped back by an appellate court only eight short months ago,” commissioner Robert McDowell said before voting against the rules. “Today the commission is choosing to ignore the recent past.”

David L. Cohen, EVP of public policy for Comcast, struck a diplomatic tone after the FCC vote, saying in a statement: “While we look forward to reviewing the final order, the rules as described generally appear intended to strike a workable balance between the needs of the marketplace for certainty and everyone's desire that Internet openness be preserved.”

The rules would prevent Comcast — which is in the midst of buying NBC Universal — from prioritizing its own content over that of Google, Netflix, Amazon or others that use Comcast to deliver their content.

While they don’t outright ban “pay for priority” arrangements — the ability for broadband providers to strike a deal with a third party to favor some content over others — the rules do adopt a ban on “unreasonable discrimination,” and the commission majority believes pay-for-priority arrangements would violate that rule.

“The order states that as a general rule such arrangements won’t satisfy the no-unreasonable-discrimination standard, because it simply isn’t consistent with an open Internet for broadband providers to skew the marketplace by favoring one idea or application or service over another by selectively prioritizing Internet traffic,” Genachowski said.

Reactions on Both Sides

There was negative and positive reaction from both sides of the issue, with open Internet advocates saying the rules don’t go far enough, and pro-business voices claiming the rules will stifle innovation.

“The FCC’s majority breaks with years of bipartisan communications policies that recognized that Internet innovation and investment — and the jobs they create — thrive without government intervention,” said Tom Tauke, Verizon EVP of public affairs, policy and communications. “This assertion of authority without solid statutory underpinnings will yield continued uncertainty for industry, innovators and investors. In the long run, that is harmful to consumers and the nation.”

In a statement, Time Warner Cable said: “Now that the FCC has settled on a regulatory framework for broadband Internet access services, we can pursue [our] mission with a somewhat greater measure of certainty and stability going forward.”

DISH Network CEO Charlie Ergen issued a statement praising the FCC’s decision.

“The new rules give companies, including DISH Network, the framework to invest capital and manpower in Internet-related technologies without fear that our investment will be undermined by carriers' discriminatory practices,” he said. “While we wish the commission would have gone further to expressly prohibit discrimination on wireless platforms, we are pleased that there will be ongoing commission oversight and enforcement authority.”

Senate Minority Leader Mitch McConnell (R-Ky.) blasted the FCC vote, saying it was another over-reach by the federal government.

“As Americans become more aware of what’s happening here, I suspect many will be as alarmed as I am at the government’s intrusion,” he said. “They’ll wonder, as many already do, if this is a Trojan horse for further meddling by the government. Fortunately, we’ll have an opportunity in the new Congress to push back against new rules and regulations.”

Craig Aaron, managing director of nonprofit media group Free Press, called the rules a “squandered opportunity” that favors the broadband industry over consumers.

“We are deeply disappointed that the chairman chose to ignore the overwhelming public support for real Net neutrality, instead moving forward with industry-written rules that will for the first time in Internet history allow discrimination online,” he said. “This proceeding was a squandered opportunity to enact clear, meaningful rules to safeguard the Internet’s level playing field and protect consumers.”

John Ryan, assistant chief legal officer for Level 3 Communications, which operates a broadband backbone network that independent online content providers use to transmit movies, games and sporting events to Comcast customers, hailed the FCC ruling. Level 3, which counts Netflix among its clients, is currently in an unrelated FCC tiff with Comcast over who should pay for added broadband traffic to consumers.

“The FCC’s rule against blocking content, combined with its rule calling for no unreasonable discrimination, make clear its intent that broadband providers cannot serve as gatekeepers to companies providing competing content, services or applications to those providers’ customers,” Ryan said.

Effects on Wireless Operators

Wireless broadband operators, while subject to the transparency and legal content aspects of the rules, are given more leeway, a nod by the commission to the fact that mobile broadband is a growing and changing market, while fixed broadband is well-entrenched. Wireless operators could still block traffic determined disruptive to its networks, under the rules.

“Any reduction in Internet openness would be a cause for concern, as would any reduction in innovation and investment in mobile broadband applications, devices or networks that depend on Internet openness,” Genachowski said.

Ruth Milkman, chief of the FCC’s Wireless Telecommunications Bureau, said the FCC decision to step back from regulating wireless the same way as fixed broadband recognizes “important differences between [the two].”

“Mobile broadband is an earlier-stage platform and is quickly evolving,” she said, adding that lumping wireless broadband completely into fixed broadband could have unintended consequences.

Net neutrality advocates slammed the FCC’s decision to go easy on wireless broadband operators, with Sen. Al Franken (D-Minn.) writing for The Huffington Post that the rules don’t go far enough.

“Mobile networks like AT&T and Verizon Wireless would be able to shut off your access to content or applications for any reason,” he wrote. “For instance, Verizon could prevent you from accessing Google Maps on your phone, forcing you to use their own mapping program, Verizon Navigator, even if it costs money to use and isn't nearly as good. Or a mobile provider with a political agenda could prevent you from downloading an app that connects you with the Obama campaign.”

Steve Largent, president and CEO of the nonprofit CTIA — The Wireless Association, praised the FCC’s more hands-off approach to wireless carriers.

“We continue to maintain that Net neutrality rules are particularly unnecessary for the wireless industry that continually innovates, competes and significantly invests in our nation, [but] we recognize that the chairman has attempted to bridge the differences among the various stakeholders,” he said in a statement. “”Whether it is the competition within the industry, the technical characteristics of the service or the distinct deregulatory framework adopted by Congress under which wireless currently operates, wireless is different.”

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