FCC chief previews proposed Net neutrality rules

The Federal Communications Commission is set to finally vote on rules this month that will keep the Internet open, but the fight may continue as neither side in the Net neutrality debate is expected to be completely satisfied with the outcome.

As expected, early Wednesday, the FCC staff circulated an agenda for the agency's December 21 meeting stating that it would be voting on an order that adopts "basic rules of the road to preserve the open Internet as a platform for innovation, investment, competition, and free expression."

Chairman Julius Genachowski gave a preview of the new rules during a brief press Wednesday. Genachowski proposed a set of rules for Net neutrality over a year ago. In that proposal the chairman suggested making the four basic principles already outlined by the commission official rules and he suggested adding two rules.

Major telephone companies and cable operators, which have generally been opposed to Net neutrality regulations, supported most of the original proposal. But there were two major areas of contention. For one, broadband providers wanted to ensure that the language used in the rules would not prohibit them from either managing their networks or charging different prices for different levels of service. And second, wireless service providers wanted the wireless networks to be exempt from Net neutrality regulations.

Consumer groups oppose these measures.

The new proposal that Genachowski discussed today is similar to a compromise proposed earlier this fall by Rep. Henry Waxman (D-Calif.), which would bar Internet providers from discriminating against rival Internet traffic and includes some limited Net neutrality protections on wireless Internet networks.

Genachowski said during his speech that the proposal will allow broadband providers to impose usage-based charges so that customers using more bandwidth would get charged more than customers using less. The FCC will also allow providers to experiment with offering specialized services that could provide higher-quality access to consumers rather than sending applications and content over the public Internet.

Broadband providers will also be required to justify why these services require dedicated bandwidth rather than being delivered over the public Internet. And broadband companies cannot discriminate against traffic on the public Internet in favor of their own services or their customers' premium services.

The new proposal will also treat wireless networks differently than wired networks with respect to Net neutrality. Wired broadband providers will be "prohibited from blocking lawful content, applications, services and the connection of nonharmful devices to the network," and they will be subject to transparency requirements as to how their networks are managed.

Wireless service providers will also be subject to the transparency requirement. And they will also not be able to block or degrade most traffic, such as Web sites and certain applications. But Genachowski said he recognizes "differences between fixed and mobile broadband," and therefore believes the rules should be more flexible for wireless.

The new proposal is not likely to satisfy either side in the debate. Broadband providers are likely to still find some of the provisions too restrictive. Some companies have suggested that Congress should write new rules and make them law rather than having the FCC handle it. Consumer groups are also not likely to be satisfied with the outcome, because they were looking for the FCC to do more.

The FCC's authority was called into question earlier this year when a federal court threw out a case in which the FCC had tried to enforce its Internet Openness principles against Comcast.

In May, Genachowski suggested a "third way" that essentially called for the FCC to reclassify Internet traffic under the regularity regime, which would allow the FCC to regulate certain aspects of the Internet. The proposal has been highly criticized by the industry.

Now, it appears that Genachowski has abandoned his plans for the "third way." The rules he plans the agency to adopt will not reregulate any part of the Internet.

There is likely to be last-minute lobbying at the FCC before the December 21 vote. And it's unclear if Genachowski has the full support of all Democrats on the Commission. The New York Times, reported Wednesday that Michael J. Copps, who has publicly supported more stringent Net neutrality regulation may put up a fight over the more lenient rules.

One thing is clear, the debate over Net neutrality is far from over. And lobbyists from consumer advocates, tech companies, and broadband service providers will be spending a lot of time at the FCC over the next month.