FCC approves net-neutrality rules; criticism is immediate
Wednesday, December 22, 2010; 12:47 AM
New Internet access rules approved by federal regulators on Tuesday prohibit network operators from meddling with Web traffic into American homes but do not extend to the fast-growing market for smartphones and tablet computers.
The regulations passed the Federal Communications Commission along party lines, with two Democratic commissioners reluctantly siding with agency Chairman Julius Genachowski in a 3-2 vote.
The rules seek to uphold a principle called net neutrality, under which Internet service providers are supposed to give equal treatment to all legal Web content on their networks. But the measure met with swift opposition Tuesday.
Republican lawmakers immediately promised to work to overthrow the rules, while analysts predicted that cable and telecom giants will file lawsuits challenging the FCC's authority to regulate the broadband market.
Genachowski, who had aggressively pushed for the rules for more than a year, did get the support of President Obama, who said the measure fulfilled an election campaign promise for net-neutrality regulations.
"Today's decision will help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and defending free speech," Obama said in a statement Tuesday.
Under the rules, broadband providers are barred, for example, from blocking streaming videos from providers such as Netflix or slowing purchases from retailers such as Amazon. The rules leave open the possibility of network operators charging higher rates to Web sites, such as YouTube, for better delivery of content.
However, the rules for the most part do not apply to wireless carriers, which have increasingly become the main providers of Internet connections for smartphone users.
The exemption of wireless broadband provoked criticism from Genachowski's allies in the consumer groups that have long pushed for net-neutrality rules.
"The commission could have established clear rules that would give more protections to Internet users than the one approved today," said Gigi Sohn, president of the public interest group Public Knowledge. "Instead, these rules will be subject to manipulation by telephone and cable companies."
The FCC has justified its exemption of wireless broadband by noting that mobile technology is evolving quickly and that cellular networks have significant capacity limitations. Voice-over-Internet services such as Skype will be among a narrow category of competing applications that cannot be blocked by a mobile service provider under the measure.
Genachowski said the rules were intended to cut down the middle of contentious high-stakes debates among cable and telecom companies that opposed the rules and Internet giants such as Google and Skype that have lobbied for regulations.
"I reject both extremes in favor of a strong and sensible framework - one that protects Internet freedom and openness and promotes robust innovation and investment," he said.
Verizon Communications is among a handful of companies that have been in negotiations with Genachowski's staff over rules for more than half a year. The broadband and wireless giant said it was concerned about the scope of the regulations approved Tuesday.
"Based on today's announcement, the FCC appears to assert broad authority for sweeping new regulation of broadband wireline and wireless networks and the Internet itself," said Tom Tauke, Verizon's executive vice president of public policy.
The FCC's ability to carry out the rules remains in doubt because of a court ruling in April, said Jeffrey Silva, a senior analyst with Medley Global Advisors. In that case, a federal appeals court said the FCC overstepped its legal authority by sanctioning Comcast for blocking file sharing between users of BitTorrent, a peer-to-peer application.
"We regard the decision more as a turning point than an endpoint on net-neutrality policy, given questions about the ruling's legal sustainability as well as unpredictable outcomes associated with FCC enforcement," Silva said.
Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.) said they would summon Genachowski for hearings on whether the agency has authority to pursue such rules. Upton, Walden and Rep. Marsha Blackburn (R-Tenn.) said that the FCC's decision was a "power grab" and that legislation would be introduced to overturn the regulations. Meanwhile, Sen. Kay Bailey Hutchison (R-Tex.) said she will move to withdraw funds appropriated to the FCC to execute the rules.
"We are going to be exploring every option to reverse this order. This will be one of our first hearings we will embark on in the next Congress," said Upton, who will be chairman of the House Energy and Commerce Committee, which has jurisdiction over the FCC.