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Internet regulation demystified

Photo: Flickr/mikeleeorg

The Federal Communications Commission issued a new plan last month for regulating broadband Internet, triggering a showdown between government policy and corporate and political interests. What does this mean for you?

On May 6, FCC Chairman Julius Genachowski issued a new framework that recategorizes the transmission component of broadband access as a telecommunications service under Title II of the 1996 Telecommunications Act. This reclassification would allow the FCC to regulate Internet transmission, but not content. Genachowski characterizes the role that government should play with respect to broadband as “limited but essential.”

The plan calls for extending broadband access to rural Americans, greater transparency for consumers regarding Internet service and preserving users’ rights to speak freely online. It avoids regulating broadband companies to the same extent as telephone service providers. Instead, the FCC claims, requiring broadband providers to not discriminate against certain websites or applications will be in the best interest of consumers.

Genachowski’s framework has already ignited a firestorm of debate among lobbyists, content providers and broadband companies. Supporters say it is a long overdue effort to enforce net neutrality and modernize policies regarding the Internet. The Open Internet Coalition, which is supported by companies including Netflix, Amazon and Google, has stated that it applauds the FCC’s “middle ground approach.”

“The plan is important because of this moment, there is no legal authority protecting consumers from abuses in broadband services,” says Art Brodsky, communications director at the consumer advocacy public interest group Public Knowledge. “The most popular misconception is that the government wants to regulate the internet. Nothing could be further from the truth.”

Americans for Prosperity, a group that advocates for limited governments and free markets, has launched a $1.4-million campaign against Internet regulation, which it calls a “government takeover.” Phil Kerpen, the group’s vice president for policy, refers to the FCC’s plan as “heavy handed” and “deeply flawed.”

Broadband providers like Verizon and AT&T also vehemently oppose any additional regulation. AT&T senior executive vice president of external and legislative affairs Jim Cicconi said in a statement that the plan was “without legal basis” and “when it regulates the networks that comprise the Internet, the FCC is in fact, and for the first time, regulating the Internet itself.”

The information-access divide

The decision to issue a new plan grew out of a recent court ruling. In 2008, the FCC wanted to halt Comcast, the country’s largest cable company, from blocking and slowing customer access to the peer-to-peer file sharing application BitTorrent. But in April, the U.S. Court of Appeals for the District of Columbia Circuit ruled that the FCC didn’t have the authority to do so.

Prior to this, the FCC had regulated broadband services as an “ancillary authority,” which dates back to the Bush administration. In 2002, then-FCC chairman Michael Powell enacted deregulatory measures for broadband, classifying it as an informational service like Google, rather than a telecommunications service. Under this categorization, the FCC had limited regulatory control, which Powell hoped would bolster competition among service providers.

Opponents of the new plan, like Kerpen, argue that the Bush-era policies should remain in place:  “The Internet — in the absence of regulation — has flourished into a remarkable engine of economic growth, innovation, competition, and free expression. Such triumph argues powerfully in favor of continuing existing success.”

Brodsky disagrees. “Under the Bush administration, they lifted a lot of the regulations and made a mess of the telecommunications world. Now we want to put it back to the way it should be.”

Part of the difficulty regarding regulating the Internet is the changing nature of technology. The 2002 regulations were created on the assumption that service providers would continue to offer information in addition to access. This was the case in 2002, when AOL dominated the market. But in 2010, Internet content has long been separated from Internet access.

Any potential legislation that puts Genachowski’s plan into practice will first have to survive inevitable revisions, legal challenges and a partisan battle in Congress. The disagreements extend into the FCC itself. Senators Robert M. McDowell and Meredith A. Baker, two Republican commissioners of the FCC, characterized the plan as a “new, more onerous regulatory regime,” while Senator John D. Rockefeller IV and Representative Henry A. Waxman, the Democratic chairs of the committees overseeing the FCC, stated that “it is essential for the commission to have oversight over these aspects of broadband policy.”

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