May 6, 2010, 1:14 PM

The FCC pushes forward a new approach to Net Neutrality

The Federal Communications Commission yesterday proposed a new policy intended to protect “net neutrality,” preventing Internet bandwidth providers from favoring certain data transmissions, without imposing “regulatory overreach” that could stifle investment by telecommunications companies in the Internet’s infrastructure. E-commerce companies generally favor the net neutrality stance because they want consumers to be able to access video and other content on their sites without restrictions.

The Federal Communications Commission yesterday proposed a new policy intended to protect “net neutrality,” preventing Internet bandwidth providers from favoring certain data transmissions, without imposing “regulatory overreach” that could stifle investment by telecommunications companies in the Internet’s infrastructure. E-commerce companies generally favor the net neutrality stance because they want consumers to be able to access video and other content on their sites without restrictions.

Calling the proposal a “narrow and tailored approach” toward establishing a fair system of regulating use of the Internet, chairman Julius Genachowski said the FCC plans to draw up a plan that would classify only the transmission component of broadband Internet access service as a telecommunications service under provisions of Title II of the Communications Act of 1934.

That step is intended to provide the FCC the legal leverage it needs to insist that telecommunications companies and Internet service providers don’t impose restrictions on the use of Internet transmissions—for example, by blocking some web site operators from transmitting high volumes of data files or by charging some web sites premium fees for such transmissions. Online retailers have been concerned that such restrictions could limit their ability to employ video and other forms of rich media.

The FCC’s new proposal comes one month after a federal court ruled that the FCC exceeded its legal authority under Title I of the Communications Act when it sanctioned Comcast Corp. for slowing down the web traffic of some customers who were downloading large files through peer-to-peer networks like BitTorrent. The FCC had been operating its Internet policy under Title I, which pertains generally to information services and is less applicable to the Internet, since the administration of George W. Bush.

By switching its policy to operate under Title II, which deals specifically with telecommunications and electronic publishing, the FCC is figuring it will have the legal bearing to regulate.

Proponents of net neutrality applauded the move, though cautioned that it remains to be seen how effective it will be. “We’re very supportive of the chairman’s move yesterday and want to applaud him for taking a step in the right direction,” says Bill McClellan, vice president of government affairs for the Electronic Retailing Association, a trade group representing TV and online retailers. “But we’ll have to see how it all plays out going forward.”

One issue that is likely to come up, he and others say, is whether the FCC will be able to live up to Genachowski’s assertion that the agency will “put in place up-front forbearance and meaningful boundaries to guard against regulatory overreach.” To win over support from the telecommunications industry, and avoid future legal challenges, McClellan notes, the FCC may have to convince the industry that future FCC commissioners won’t seek to enforce a broader scope of regulations.

Genachowski, meantime, has requested his staff to set up a public comment period for the new proposal.

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