October 27, 2009, 12:00 AM

E-retailers may get their wish for Internet `network neutrality`

The FCC has proposed rules that would prevent Internet access providers from sending some web traffic to a fast lane, while delivering other traffic at slower speeds.

Katie Evans

Managing Editor, International Research

The long-running debate over “network neutrality” is heating up in Washington again, and online retailers may eventually get their wish for rules that would guarantee equal treatment of all web traffic. But with Republican Sen. John McCain and Internet access providers leading the opposition, the outcome of the debate and timing of any new rules remains in doubt.

In a big win for net neutrality proponents, the Federal Communications Commission proposed rules last week that would prevent Internet access providers such as Verizon, Comcast and AT&T; from transmitting certain web traffic at faster speeds than other traffic. The providers of access to the web say they should be able to charge more to send traffic at higher speeds, especially now that the explosion of streaming video and other digital content is straining their capacity.

Online retailers and Internet companies generally have favored network neutrality, arguing that giving consumers access to all kinds of web content, including content from smaller companies that would not be able to pay extra for fast transmission, encourages innovation and the further expansion of the Internet.

“An open Internet fuels a competitive and efficient marketplace, where consumers make the ultimate choices about which products succeed and which fail. This allows businesses of all sizes, from the smallest startup to larger corporations, to compete, yielding maximum economic growth and opportunity,” stated a letter sent to the FCC last week by the CEOs of such companies as Amazon.com, eBay Inc., Google Inc., Craigslist, Twitter and Sony Electronics.

The Electronic Retailing Association, which represents retailers that sell through television, radio and the web, also offered support to the FCC’s network neutrality proposal, saying it would keep Internet service providers, or ISPs, from favoring certain online players over others.

“Without network neutrality protections, ISPs will be allowed to become gatekeepers of online content and information and through discriminatory practices degrade consumers’ online experience to the detriment of all,” said ERA president and CEO Julie Coons in a statement.

The FCC surprised some by including the mobile Internet in its network neutrality rules. However, the commission indicated it would consider whether wireless operators need more flexibility than landline operators. Any rules that emerge may treat the mobile web somewhat differently, given that cellular networks experience more variability in demand as consumers use their mobile phones in different locations at different times of day, notes Charles Golvin, a wireless industry analyst at Forrester Research Inc.

The FCC last week proposed six principles for providers of broadband Internet access, including that they “would be required to treat lawful content, applications and services in a nondiscriminatory manner,” which is the essence of network neutrality. The public can make comments on the proposal through Jan. 14 and the FCC will consider replies to those comments through March 5. After that, the FCC could vote on the matter.

However, Sen. John McCain of Arizona, last year’s Republican presidential candidate, has introduced legislation titled the Internet Freedom Act that would prevent the FCC from setting rules on network neutrality. McCain argues that network neutrality would inhibit competition.

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