Net neutrality bill gives FCC no new rulemaking power

The Federal Communications Commission will not have rulemaking authority under a network neutrality bill that key House Democrats plan to introduce soon, according to a recent draft obtained by CongressDaily's Tech Daily Dose blog.

Instead, the commission will deal with enforcement on a case-by-case basis. Broadband providers who violate the law will face a maximum penalty of $2 million by FCC, under the bill.

The absence of the rulemaking authority, along with other provisions of the bill, is consistent with information reported by Tech Daily Dose last week.

The bill is a last-minute effort by House Energy and Commerce Chairman Henry Waxman to shepherd net neutrality legislation through the lower chamber before recess. Waxman hopes to advance the measure through the Senate during the lame-duck session after the November elections, according to an industry source.

Under the bill, FCC would be prohibited from reclassifying broadband under Title II of the Communications Act, a change FCC Chairman Julius Genachowski has proposed to allow the government to impose rules designed to preserve the Internet's openness. Although he has sought to protect broadband from more onerous regulatory requirements under Title II, such as price regulation, the industry regards the reclassification approach as the "nuclear option."

To ensure net neutrality, the House bill would stipulate wireline providers may not block lawful Internet traffic and or "unjustly or unreasonably discriminate in transmitting lawful traffic over a consumer's wireline broadband Internet access service."

Notably, the nondiscrimination language does not apply to wireless providers. The bill would prohibit wireless providers from blocking lawful websites, but leaves open their ability to block applications and peer-to-peer activity.

The draft bill also sets a Dec. 31, 2011, deadline for FCC to deliver to the House and Senate commerce committees a report regarding additional authority needed by the commission to implement its national broadband plan and ensure the further protection of consumers with respect to their Internet use.

The draft includes a sunset provision calling for the enacted measure to expire at the end of the 2012 calendar year.

All of the rules regarding Internet traffic are subject to "reasonable network management," the draft bill says.

"This bill represents a giant retreat by some of those who claim to support net neutrality and sends the wrong signal to the FCC who will ultimately deal with this issue," said a source familiar with the situation.