FCC Takes Another Crack at Net Neutrality

Federal Communications Commission Chairman Tom Wheeler is proposing Net neutrality regulations in another attempt to prevent blocking of legal content and unreasonable favoritism of certain Internet traffic.

Critics on Thursday immediately blasted Wheeler’s proposal, griping that it will authorize Internet providers like AT&T, Comcast and Verizon to charge fees to content companies for the right to prioritize traffic.

“Not only is this simply another way for ISPs to charge additional fees for a service that they are already getting paid to deliver, it also allows those companies to take advantage of their positions as gatekeepers to pick winners and losers online,” said Sarah Morris, senior policy counsel for the Open Technology Institute at New America Foundation, in a statement.

Free Press, an organization that advocates for affordable Internet access, said the proposed regulations would kill the open Internet.

“Giving ISPs the green light to implement pay-for-priority schemes will be a disaster for startups, nonprofits and everyday Internet users who cannot afford these unnecessary tolls,” Free Press President and CEO Craig Aaron said in a statement. “These users will all be pushed onto the Internet dirt road, while deep-pocketed Internet companies enjoy the benefits of the newly created fast lanes. This is not Net neutrality. It’s an insult to those who care about preserving the open Internet to pretend otherwise.”

Responding to a “great deal of misinformation,” Wheeler said the proposal is in line with the objectives of previous FCC regulations that were challenged in federal court. The actual proposal hasn’t been made public.

“The Notice does not change the underlying goals of transparency, no blocking of lawful content, and no unreasonable discrimination among users established by the 2010 Rule,” Wheeler wrote in a blog. “The Notice does follow the road map established by the Court as to how to enforce rules of the road that protect an Open Internet and asks for further comments on the approach.”

In late 2010, under former FCC Chairman Julius Genachowski, the commission issued an order prohibiting fixed broadband providers from blocking lawful content, applications and services and unreasonably discriminating on their networks.

Those regulations, known more formally as the “Open Internet Order,” were overturned following a successful legal challenge by Verizon Communications Inc.

In January, a federal appeals court in Washington, D.C., ruled the FCC was unlawfully seeking to subject broadband providers to “common carrier” regulations even though the agency classified the companies differently.

“The Court of Appeals made it clear that the FCC could stop harmful conduct if it were found to not be ‘commercially reasonable,'” Wheeler said. “Acting within the constraints of the Court’s decision, the Notice will propose rules that establish a high bar for what is ‘commercially reasonable.'”

Wheeler said his proposal will require that all Internet service providers (ISPs) disclose to subscribers their network policies; prohibits blocking of lawful content; and prevents ISPs from acting “in a commercial unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.”

Matthew Howett, a telecoms regulation analyst with Ovum, questioned how FCC would define “commercially reasonable.”

George Foote, a partner at the International law firm Dorsey & Whitney, who has represented telecommunications companies, expressed support for Wheeler’s proposal.

“Allowing higher charges for faster speeds is consistent with a policy of attracting more investment to the most important network in America and improving broadband for all users,” he said in a statement.

The FCC’s plans to require disclosures regarding network practices aren’t likely to meet legal challenges because a prior disclosure requirement that Verizon challenged in the 2010 Open Internet Order was upheld by the appeals court.

Net neutrality has been a source of vigorous debate, as illustrated by the recent squabble between Comcast Corp. and Netflix. Comcast has pointed out it is the only ISP that is currently bound by the overturned Net neutrality regulations. The cable giant previously agreed to be bound by them as part of its 2011 merger with NBCUniversal.

In its January ruling, the U.S. Court of Appeals for the District of Columbia Circuit found credible the FCC’s position that broadband providers have an incentive to discriminate against competing services.

“As the Commission noted, Voice-over-Internet-Protocol (VoIP) services such as Vonage increasingly serve as substitutes for traditional telephone services, id., and broadband providers like AT&T and Time Warner have acknowledged that online video aggregators such as Netflix and Hulu compete directly with their own ‘core video subscription service,'” the court wrote. “Broadband providers also have powerful incentives to accept fees from edge providers, either in return for excluding their competitors or for granting them prioritized access to end users.

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