FCC likely to tangle with wireless carriers over proposed rule against blocking ‘Net traffic

FCC chairman says ‘open Internet’ rules are vital

NEW YORK — The chairman of the Federal Communications Commission on Monday proposed the most wide-ranging and specific rules so far for regulating how Internet service providers and wireless carriers handle subscriber traffic.

While the FCC has intervened a few times to discipline home broadband providers for blocking or hampering certain types of traffic, the proposal by Chairman Julius Genachowski could result in the first solid rules. It is also aimed at regulating, for the first time, how wireless companies carry Internet traffic to cell phones.

Telecommunications executives warned that the proposal looks like a solution in search of a problem. They said that unless the regulations are carefully implemented, the rules could stifle investment in Internet access.

Reactions to the ideas from Genachowski, who was appointed by President Barack Obama, broke down along partisan lines. Republican senators said there was no need for an unprecedented expansion of Internet regulation. Obama said that on the contrary, well-crafted regulation of the Internet would encourage investment and innovation.

Internet service providers, both wired and wireless, are struggling with the question of how to distribute network capacity among their subscribers. Heavy users can overwhelm cellular towers and neighborhood cable circuits, slowing traffic for everyone.

At the same time, consumer advocates and Web companies like Google Inc. want to safeguard what has been an underlying “Net neutrality” assumption of the Internet: that all types of data are treated equally. If the carriers can degrade or block traffic, they become the gatekeepers of the Internet, able to shut out innovative services, these critics say.

Last year, the FCC sanctioned Comcast Corp. for secretly hampering file-sharing traffic by its cable-modem subscribers. In that ruling, the agency relied on broad “principles” of open Internet access that hadn’t previously been put to the test. Comcast sued the FCC, saying the agency didn’t have the authority to tell the company how to run its network. The case is still in federal appeals court.

Genachowski is now proposing to make it a formal rule that Internet carriers cannot discriminate against certain types of traffic by degrading service. That expands on the principle that they cannot “block” traffic, as articulated in a 2005 policy statement.

Genachowski also made clear in his webcast speech Monday at the Brookings Institute in Washington that wireless carriers should be subject to the same principles. That may mean that a carrier couldn’t, for example, ban the use of file-sharing services on its wireless network, which AT&T Inc. does now.

The government also has been investigating Apple Inc.’s process for approving programs for its iPhones, but Genachowski isn’t directly addressing manufacturers’ right to determine which applications run on their devices.

Still, it’s unclear how the principles would apply in practice. The proposal is the starting point for a process to hammer out detailed rules in the coming months. Genachowski also left the door open to treating wireless networks differently than wired networks in the final regulations.

Comcast has already changed its system to one that does not look at what types of traffic subscribers are using. Instead, it throttles back the speed of heavy users if there is congestion on the network. However, there are other companies that might run up against the rules outlined by Genachowski. Cox Communications, another cable company, has been testing a system that slows traffic that it deems less time-sensitive, like file downloads and software updates, to keep Web pages, streaming video and online games working faster.

Cox declined to comment. But other Internet service providers said they worried the government would reach too far into the way they do business.

Jim Cicconi, AT&T’s top executive in Washington, said the company would be “very disappointed” if the FCC has already concluded that it needs to “regulate wireless services despite the absence of any compelling evidence of problems or abuse.”

Similarly, David Cohen, executive vice president at Comcast, said he welcomed the “dialogue” suggested by the FCC chairman, but also said it would be important to first figure out if there are “actual and substantial problems that may require rules.”

David Young, vice president of federal regulatory affairs at Verizon Communications Inc., said he was pleased that Genachowski said he favored a light touch in setting up the new regulatory framework. If Internet carriers aren’t free to experiment with different ways of treating traffic, “it will stifle innovation, investment and growth,” he said.

“To dramatically change the 15-year policy of the United States government to not regulate the Internet is a pretty radical thing and should be driven by a very real and present need to do so,” Young said.

Genachowski’s two fellow Democrats on the five-seat FCC said Monday they supported the proposal, which will give Genachowski a majority to push it through. The two Republican commissioners, Robert McDowell and Meredith Baker, urged caution, suggesting that new regulations not be based on a need to “alleviate the political pressures of the day.”

Meanwhile, Republican Sen. Kay Bailey Hutchison of Texas sought to stop the proposal outright, introducing an amendment to an appropriations bill that would deny the FCC the funding to explore and develop new regulatory mandates. It was co-sponsored by five Republicans.

“The case has simply not been made for what amounts to a significant regulatory intervention into a vibrant marketplace,” Hutchison said in a statement.

Ben Scott, policy director at advocacy group Free Press, which complained to the FCC about Comcast’s old network management practices in 2007, said the Internet is now of such importance that government will have to take a role in making sure it works optimally.

“It is inevitably going to have a regulatory structure around it,” Scott said. “… What we’re deciding is: What is it going to look like?”

On the Net:

FCC site on new rules:

www.openinternet.gov