Net neutrality: FCC proposes three new rules

The FCC's net neutrality guidelines would be a bill of rights for Internet users by prohibiting providers from blocking legal content or cutting connection speeds without explaining why.

The Obama administration proposed new rules of the road for the Internet Monday, standing up for the consumer-oriented principle known as net neutrality.

The guiding idea is that the big cable companies that build the information highway shouldn't exert much control over where users drive.

Or, to cast the debate more specifically, proponents say it's about making sure that Comcast or Time Warner doesn't unfairly limit the potential for the next Facebook or Skype to arise.

Federal Communications Commission chief Julius Genachowski proposed two new guidelines Monday, plus a strengthening of existing FCC standards:

1. Providers can't favor their own content

He urged a "nondiscrimination" principle: Providers of broadband Internet service cannot discriminate against particular Internet content or applications. This would cover the emerging arena of wireless broadband services, delivered to smart phones. Consumer groups worry that pipeline firms (such as AT&T) will favor the transmission of their own video content, for example, over other web-based video content.

2. Providers need to explain variable internet speeds

He proposed a "transparency" principle: Broadband providers should disclose their network management practices to consumers. This might include policies that cause some users to face a squeeze on their connection speed during times of peak traffic on the network.

3. Providers can't limit access to lawful content

He called for "four freedoms" that the FCC set forth in 2004 to be turned into formal rules. These standards say that network operators cannot prevent users from accessing the lawful Internet content and applications. Comcast is fighting the FCC in court over these principles.

It's a controversy that won't end with Monday's speech. The FCC chairman and other proponents of the changes see the new rules as a platform for innovation and consumer choice. But some providers – the builders of the Internet highway – say the rules could backfire by slowing investment in Net services. To them and other critics, network neutrality is simply a code for government micromanagement of the private sector.

Mr. Genachowski acknowledged the complexity of the challenge.

"There are inevitable tensions built into our system," he said. "The FCC must be a smart cop on the beat preserving a free and open Internet."

President Obama also touted the FCC proposals, praising them in a separate Monday speech on education. Two Democratic members of the five-member FCC said they support Genachowski’s ideas, giving him a majority to implement the proposal, the Associated Press reported.

The agency chairman pledged to strike a balance. Providers, he said, should be able to "reasonably" manage their networks during periods of congestion. And openness shouldn't come at the expense of security, criminal activity, or uncontrolled "spam" e-mails, Genachowski said.

After his speech at the Brookings Institution, a followup panel discussion revealed the deep divisions on the issue.

The Skype video phone service "is blocked" already on some networks, said Josh Silverman, president of the Skype Technologies. "As soon as it starts to look like [a provider is] picking winners, that’s when we start to get nervous."

David Young, a vice president at Verizon, begged to differ. He asked for more evidence that startups are being stifled, before imposing new regulations on a system that has "been wildly successful" in building the Internet.

The argument for rules of the road centers around the market power that a few big service providers wield. It's expensive to install cables or cell towers, a cost that becomes a barrier against new competition. It also hinges on the growing importance of the web as infrastructure for the economy, as well as for news and entertainment.

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