FCC Chairman Julius Genachowski Calls for Network Neutrality and Transparency Rules

WASHINGTON, September 21, 2009 – The Federal Communications Commission must be a “smart cop on the beat” to preserve a free and open internet,  Chairman Julius Genachowski said Monday during a speech at the Brookings Institution.

While acknowledging the 30th birthday of ARPANet – the predecessor to today’s internet, Genachowski announced his intent to launch a proceeding which would extend and formalize the “Four Principles” of the commission’s 2005 Internet Policy Statement through a formal rule making – as well as introduce two new principles: non-discrimination and transparency in network management.

Genachowski’s plans to formally codify “network neutrality” into federal regulations come as the commission’s 2008 ruling against Comcast for blocking peer-to-peer traffic remains under the cloud of a court challenge. Comcast has alleged the FCC’s 2005 policy statement does not have the force of law – nor does the commission have the authority to regulate broadband providers in the first place.

Legislation is already pending in the House of Representatives that would give the FCC this explicit authority.

But Genachowski has no plans to wait for legislative action, he said, and plans to introduce a Notice of Proposed Rulemaking at the commission’s October open meeting.

Action is needed because as Americans have shifted to broadband services from dial-up internet access, the number of provider choices has “narrowed substantially,” he said. But no one should infer any conclusions from that statement, Genachowski added cautiously. “It is simply a fact about today’s marketplace that we must acknowledge and incorporate into our policymaking.

And the convergence of entertainment providers with broadband service providers means that those companies often compete with services that are delivered over their own networks – creating a situation in which “broadband providers’ rational bottom-line interests may diverge from the broad interests of consumers in competition and choice,” he said.

The explosive growth of internet traffic is yet a third reason for clear regulatory principles, Genachowski added. He noted that internet traffic has roughly doubled every two years, and with them have come a plethora of sophisticated network management tools that are often opaque to the end-user. These tools “cannot by themselves determine the right answers to difficult policy questions – and they raise their own set of new questions,” he said.

These questions are difficult, Genachowski acknowledged. But “we have an obligation to ask and to answer correctly for our country,” he said. Ignoring the issues and leaving them to the whims of the market would “deprive innovators and investors of confidence” that the internet will remain open, he said.

And retreating from the internet’s core principle of openness would be  dangerous to the medium that has become “stunningly successful as a platform for innovation, opportunity, and prosperity,” he said. “Saying nothing – and doing nothing – would impose its own form of unacceptable cost.”

Genachowski outlined two specific additions to the 2005 policy statement which he intends to circulate next month. The “fifth principle” would state that broadband providers may not discriminate against particular Internet applications by degrading or blocking lawful traffic.

This would not prevent enforcement of any existing laws — nor hamper network providers from managing their networks, Genachowski stressed. “This principle will not constrain efforts to ensure a safe, secure, and spam-free Internet experience, or to enforce the law. It is vital that illegal conduct be curtailed on the Internet,” he said. “The enforcement of copyright and other laws and the obligations of network openness can and must co-exist.”

And the “sixth principle” would mandate broadband providers be transparent about their network management practices. Because the internet evolved from open standards, it should be managed with tools and practices that are disclosed so their effects can be known, he said. Such openness will “help facilitate discussion among all the participants in the Internet ecosystem, which can reduce the need for government involvement in network management disagreements,” he said.

Mobile broadband will be held to the same standards as traditional broadband, Genachowski said. “Even though each form of Internet access has unique technical characteristics, they are all are different roads to the same place. It is essential that the Internet itself remain open, however users reach it,” he urged.

Genachowski will circulate these six principles in a Notice of Proposed Rulemaking to his colleagues to be introduced at next month’s open meeting. The proposed rules are being drafted by commission staff.

But the proposal is “not about government regulation of the internet,” Genachowski stressed emphatically. “It’s about fair rules of the road for companies that control access to the internet.” And the commission’s approach will be limited and only exercised on a case-by-case basis, he said. “We will do as much as we need to do, and no more.”

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