The Expanding Net of Online Regulations

Posted: Oct 22, 2009 12:01 AM
The Expanding Net of Online Regulations

The day of reckoning has arrived in the fight over net neutrality. Federal Communications Commission (FCC) regulators meet today to decide whether to restrict the ability of internet service providers (ISPs) to calibrate their fees to correspond with the amount of bandwidth used by a consumer.

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The FCC would essentially require ISPs to charge consumers the same for internet activity that uses a lot of bandwidth, like downloading music, as they do for activity that uses relatively little bandwidth, like reading text on a web page. The anticipated regulations have sparked a flurry of attention from lawmakers, with over 72 House Democrats signing a letter addressed to FCC Chairman Julius Genachowski, voicing their concerns.

“As the FCC embarks on its much anticipated rulemaking…we urge the Commission to carefully consider the full range of potential consequences that government action may have on network investment,” said the letter. A majority of the Democratic signatories were Blue Dogs.

Genachowski’s address on Monday indicated that he was in favor of these “net neutrality” restrictions. He said he would like to require broadband providers to disclose how they were charging for services and not allow providers to restrict high-volume traffic. Genachowski didn’t make any rules during the speech, of course, but it didn’t bode well for the plethora of net neutrality critics who have waged a fierce battle against the proposed restrictions.

Those critics include technology manufacturers, communications unions, and heads of the cable and telecommunications industries. And then there are the lawmakers - the 72 House Democrats (including 18 members of the Congressional Black Caucus), most of the Republican leadership in the House, 18 Republican Senators, 11 governors, and 10 members of the House Energy and Commerce committee, which oversees the FCC.

After Genachowski’s announcement that he would support net neutrality, David Cohen, executive vice president of broadband for Comcast, issued a rebuttal on his blog, pointing out that net neutrality has been debated since the dawn of the internet and that the lack of regulations thus far has served consumers well.

“The internet in America has been a phenomenal success that has spawned technological and business innovation unmatched anywhere in the world. So it’s still fair to ask whether increased regulation of the internet is a solution in search of a problem,” wrote Cohen.

The 18 Republican Senators had even stronger words in their letter to the FCC. "When the government picks winners and losers in the marketplace, the incentive to invest disappears…we fear that the proposals you announced ... will be counterproductive and risk harming the great advancements in broadband speed and deployment,” they wrote.

In the absence of formal rules, the FCC already does enforce some internet regulations of bandwidth usage on a case-by-case basis. Net neutrality supporters scored points in August when the FCC ordering Comcast to stop interfering with peer-to-peer file sharing. The FCC said Comcast was unfairly slowing peer-to-peer networks, even though they used comparable bandwidth to other high-volume sites; Comcast denied the charges.

Net neutrality supporters say that more egregious examples of the Comcast case will occur without more regulation. Instead of ISPs simply pricing bandwidth to correspond with usage, they will price it according to which content they like, slowing down sites that competitors might have a stake in. The most common example of this is AT&T’s attempt to block Google products on Apple iPhones, so consumers would be forced to use AT&T sponsored Apple products. Net neutrality advocates claim this would just be the tip of the iceberg without a ban on bandwidth discrimination.

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