Amid a firestorm of criticism from both ends of the political spectrum, the United States Federal Communications Commission on Tuesday adopted the first-ever regulations for broadband Internet service, rules designed to foster the fast-evolving market for TV and movies over the Web.
The network neutrality guidelines bar broadband operators such as Comcast and AT&T from favouring their own content over rival online video sites like Netflix or Amazon, or wireless companies from blocking Internet phone applications like Skype. Consumers increasingly are using Web connections to watch favourite TV shows and movies at a fraction of the cost of a cable subscription -- a threat to Internet providers that also have lucrative pay-TV franchises they want to protect.
The rules are designed to give Web entrepreneurs peace of mind that they will have unfettered access to consumers without having to negotiate with broadband network owners for access to their pipes. The regulations, approved in a party-line 3-2 vote, would bar broadband companies from managing their networks in ways that unfairly discriminate against competitors.
Alleged infractions will be considered on a case-by-case basis but would most likely include degrading the quality of rival video sites or charging a site or application extra fees for faster delivery over a broadband network. Internet providers would also have to disclose how they are managing traffic over their networks exposure that FCC Chairman Julius Genachowski believes will head off bad behaviour.
Wireless Internet operators would be subject to somewhat more lenient regulations, but they still could not block access to competing sites or applications such as voice-over-Internet calling.
The rules could be tested in a few ways. A complaint could be filed alleging a violation, which the FCC could investigate under an expedited process. Or opponents could challenge the regulations in court. A federal court ruled earlier this year that the FCC lacks jurisdiction over broadband, and some critics say the rules passed Tuesday are likewise on shaky legal ground. Verizon signalled it may press the issue.
This assertion of authority without solid statutory underpinnings will yield continued uncertainty for industry, innovators and investors, the company said in a statement.
But Genachowski used a legal basis to justify the rules. He said he is confident they would withstand a court challenge.
The vote marks a big win for Genachowski -- who spent the better part of a year working to fashion a compromise on net neutrality -- and the achievement of a key tech-related campaign promise by President Barack Obama. The proposal won significant support from many in Silicon Valley, including Apple co-founder Steve Wozniak, who was on hand for Tuesday's FCC vote.
I wish it had gone farther, but I'm glad they made the statement that they made, Wozniak remarked, saying he doesn't trust broadband operators not to play favourites to benefit their own business interests.
Democratic Commissioner Michael Copps said he preferred stronger net neutrality regulations but concluded that the compromise plan was better than nothing at all. Voting against it, he said, would have stalled progress on net neutrality for years.
Republican Commissioner Robert McDowell accused the Democratic majority on the commission of abusing its legal authority and putting the FCC on a collision course with the legislative branch, specifically GOP lawmakers who oppose net neutrality. The vote is an example of top-down control by unelected political appointees, he said, adding: Nothing is broken in the Internet access market that needs fixing.
But Genachowski pointedly disagreed, saying basic government rules are essential to keep the Internet open for consumers and innovators.
We have heard from so many entrepreneurs, engineers, venture capitalists and others working daily to maintain U.S. leadership in innovation, Genachowski said, ”and their message has been clear: The next decade of innovation in this sector is at risk without sensible rules of the road.