FCC triggers firestorm with 'net neutrality' proposal

The chairman of the Federal Communications Commission announced Wednesday he has scheduled a December 21 vote on a new regulatory initiative designed to preserve the openness that has been the Internet's hallmark since its inception.

The proposal has already split the agency along party lines, with the commission's two GOP members quickly condemning it and setting the stage for a partisan vote that could draw a backlash next year from the GOP-controlled House.

Before Chairman Julius Genachowski finished his announcement, fierce opposition was registered from Republicans on Capitol Hill who insisted his proposal goes too far, and from watchdog groups that dismissed it as too weak. Genachowski hopes to nullify the opposition with solid support from prominent Democrats on the Senate and House commerce committees.

"It would ensure that the Internet remains a powerful platform for innovation and job creation," Genachowski said of the new plan he wants adopted. "It would empower consumers and entrepreneurs," protect "free expression," and increase "certainty in the marketplace" for telecommunications companies, he said.

The fight over "network neutrality" has been brewing for years and has divided much of the telecom industry and Congress, with many conservative Democrats joining Republicans in opposition. While the topic may seem technical and obscure, it boils down to a question of whether the Internet remains an open platform in which every website is on equal footing, or whether fast lanes are established that grant priority treatment to websites and online services willing to pay for such privileges.

The FCC already has voluntary neutrality guidelines that address consumer rights on the Internet, but this plan would give the rules more heft and allow for enforcement. Genachowski said his proposal would prohibit the blocking of lawful content, require more transparency about how broadband networks are managed, and bar "unreasonable discrimination in transmitting lawful network traffic."

This is Genachowski's second attempt at expanding the agency's net neutrality rules, among the highest tech-related priorities for the Obama administration. His original effort in September 2009 was stymied by a federal appeals court decision in April that gutted the agency's legal foundation for regulating broadband providers like AT&T, Comcast, Time Warner Cable, and Verizon. Now, the agency says it has built a stronger legal basis for the new proposal.

The White House called the FCC plan "an important step in preventing abuses and continuing to advance the Internet as an engine of productivity growth and innovation."

The two Republicans on the five-member agency immediately condemned the planned vote. "I strongly oppose this ill-advised maneuver. Such rules would upend three decades of bipartisan and international consensus that the Internet is best able to thrive in the absence of regulation," wrote Robert McDowell, the FCC's senior Republican.

GOP member Meredith Attwell Baker warned: "We do not have authority to act. The new majority of the House Committee on Energy and Commerce has asked the commission not to circulate this order, and a clear majority of all members of Congress has expressed concern with our Internet policies. Whether the Internet should be regulated is a decision best left to the directly elected representatives."

Senate Commerce Committee ranking member Kay Bailey Hutchison , R-Texas, urged Genachowski to "stand down," insisting new regulations are unnecessary and amount to overreach. "If he decides to move forward, I will explore all options available to keep the FCC from implementing regulations that will threaten the innovation and job creation opportunities associated with the Internet," she said in a statement.

Equally worrisome for Genachowski was opposition from left-leaning watchdogs that have long championed this cause. Free Press, which played a key role in initially convincing the chairman to tackle an expansion of his net neutrality rules, dismissed his latest initiative as "garbage." The group argued the proposal is weak on regulating wireless Internet access and might not ban "paid prioritization," essentially the two-tiered Internet that proponents of tougher net neutrality safeguards have long warned about.

Also critical was the Media Access Project, a public-interest law firm prominent on telecom policy issues. It claimed the proposal is weak on enforcement and preventing dominant companies from blocking or degrading Internet competitors. But the chairman did manage to win the support from other key groups, including Consumers Union, the Consumer Federation of America, and Public Knowledge, which said new rules are urgently needed to protect consumers and smaller Internet companies.

Industry reaction was equally mixed. AT&T, the nation's largest telecom carrier, applauded Genachowski for putting forward a "compromise solution," while Verizon, the second-largest provider, said the agency's authority to act is "uncertain" and the matter is best left to Congress.

FCC officials were mum on the exact legal foundation for proceeding with new broadband regulations, except to say they plan to draw from several sections of the 1934 Communications Act.

The agency earlier proposed addressing the legal impasse created by the April judicial decision by treating broadband as a heavily regulated public utility -- an idea that met with steep congressional and industry resistance. When asked about the commission's new approach, a senior FCC official said it has used the last few months to reflect on "various legal arguments that can be made." If critics of the latest net neutrality proposal challenge it in court, the commission feels confident it would be on "sound legal ground," the source added.