FCC Moves on Net Neutrality

May 06, 2010

Chairman describes "third way" to regulate bandwidth

The Federal Communication Commission chairman Julius Genachowski unveiled the FCC's next steps in net neutrality following the appeals court ruling last month in the Comcast v. FCC case.

In a statement titled, "The Third Way: A Narrowly Tailored Broadband Framework," Genachowski made it clear that he believed the FCC's role was to protect consumers against anticompetitive or unreasonable conduct by service providers without directly regulating the Internet itself.

"FCC policies should not include regulating Internet content, constraining reasonable network management practices of broadband providers, or stifling new business models or managed services that are pro-consumer and foster innovation and competition," Genachowski said in the statement.

Genachowski calls the FCC's ancillary role in broadband too piecemeal to be effective, but at the same time points out that reclassifying broadband as a telecommunication would give the FCC direct oversight, but subject broadband providers to excessive regulations.

In Genachowski's and the FCC lawyers' assessment, the third way allows the FCC to regulate the transmission component of broadband as they would a telecommunications service, while ignoring any unnecessary provisions that could hinder competitive business models. This approach also would reinstate several provisions that were overturned in the Comcast v. FCC case without stifling capitalist ingenuity and gives the FCC the leverage necessary to push forth its National Broadband Plan.

Others don't see the plan as the proper catch-all approach Genachowski claims it to be. FCC commissioners Robert McDowell and Meredith baker said the plan would discourage providers from investing in their networks while House Republican leader John Boehner said that the plan effectively nationalized the Internet.

Broadband stocks fell in response to the proposal as AT&T and Verizon Communications Inc. both dropped 3 percent, while Comcast Corp fell 6 percent. Time Warner suffered the largest drop with an 8 percent decline in stock prices.

There's a long legal road ahead for the FCC's proposal and the previously mentioned providers have the revenue necessary to see it through. We'll keep you posted as the story develops.

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