FCC chairman proposes rules to codify principles of 'Net neutrality'

FCC Chairman Julius Genachowski today proposed that the Federal Communications Commission expand the principles of Internet neutrality it has been using for four years in regulating Internet carriers and codify them into formal rules.

The principles are intended to ensure that carriers do not unduly interfere with customer traffic on their networks, at the same time allowing reasonable network management. Genachowski said that the new rules, if adopted, would apply to satellite and wireless providers as well as to traditional wireline carriers.

“I propose that the FCC adopt the existing principles as commission rules, along with two additional principles that reflect the evolution of the Internet and that are essential to ensuring its continued openness,” he said in a speech at the Brookings Institution in Washington.

Genachowski said he intends to circulate proposed rules to fellow commissioners and issue a formal notice of proposed rule-making at the FCC’s October meeting. The commission has launched a new Web site (www.openInternet.gov) with information about the issues and rule-making process.

The commission has been dealing with the issue of Net neutrality since 2004, and the initial four principles were adopted in a 2005 policy statement that consumers are entitled to:

• Access the lawful Internet content of their choice.
• Run applications and services of their choice, subject to the needs of law enforcement.
• Connect their choice of legal devices to the network.
• Have competition among network, application, service and content providers.

“All of these principles are subject to reasonable network management,” the policy statement said. The commission did not adopt the principles as rules, but it has incorporated them in its decision- and policy-making since then.

Genachowski on Monday enumerated two more principles. Nondiscrimination would prevent carriers from blocking or degrading legal content over their networks, favoring some content, applications or providers over others; and transparency in network management would require carriers to make clear to users how traffic on a network is being managed to ensure that customers know they are getting the service they pay for.

“To be clear, the transparency principle will not require broadband providers to disclose personal information about subscribers or information that might compromise the security of the network, and there will be a mechanism to protect competitively sensitive data,” Genachowski said.

The chairman said that need for such rules has been demonstrated by the behavior of carriers that has threatened the openness of the Internet.

“We have witnessed certain broadband providers unilaterally block access to [voice-over-IP] applications and implement technical measures that degrade the performance of peer-to-peer software distributing lawful content,” he said. “We have even seen one service provider deny users access to particular content whose message the company didn’t agree with.”

He said the proposed rules would not interfere with enforcement of copyright or other laws.

Genachowski said the business interests of the commercialized networking are threatening the traditional openness of the Internet that has fostered rapid technological innovation and adoption over the past 40 years. Competition has become more limited as the Internet has moved from predominantly low-speed dial-up connections toward high-speed broadband links, and the lines between content providers and service providers is becoming blurred.

“The great majority of companies that operate our nation’s broadband pipes rely upon revenue from selling phone service, cable TV subscriptions, or both,” he said. “These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers’ perfectly understood bottom-line interests may diverge from the broad interests of consumers in competition and choice.”

Genachowski said the FCC was not picking “white hats” or “black hats” in this issue but responding to “inevitable tensions built into the system.”

Not everyone agrees. Large networking companies criticize the move as unwarranted government regulation that would stifle the competition and innovation the FCC seeks to promote. The Competitive Enterprise Institute called it anti-competitive and pro-bureaucratic, promoting the aims of special interests rather than consumers and endangering innovations such as faster wireless networks.

The wireless marketplace already has robust competition, said CEI vice president for policy Wayne Crews. “Virtually all U.S. consumers can select from four competing national carriers and dozens of regional carriers,” he said. And that competition extends to end-user equipment. “Open-source handsets that run Google’s Android operating system can be purchased today by AT&T, T-Mobile and Sprint subscribers.”

Genachowski responded that “This is not about government regulation of the Internet. It’s about fair rules of the road for companies that control access to the Internet.”