December 13, 2010
Intellectual Property, Internet & E-Commerce, Telecommunications, Telecom, Broadband & Media Alerts

FCC Chief Announces Proposal to "Preserve the Freedom and Openness of the Internet"
by Cyrus Wadia

Earlier this month, the U.S. Federal Communications Commission Chairman Julius Genachowski announced "draft rules of the road to preserve the freedom and openness of the Internet" which feature a ban on the blocking of lawful content, services or devices by Internet service providers.  Chairman Genachowski has circulated this proposal to the FCC commissioners in advance of a December 21, 2010 voting meeting. 
 
Net neutrality, the principle of no restrictions on Internet traffic, is a cause célèbre in the modern digital age.  The FCC claims jurisdiction to enforce this principle and, to this end, hopes to lay down some grounds rules for fixed and wireless broadband networks.  Chairman Genachowski's three-fold plan for service providers includes: (1) a "meaningful" transparency obligation to disclose how networks are managed; (2) a prohibition against blocking lawful Internet traffic, contents, apps, services, and devices; and (3) a bar against unreasonable discrimination in transmitting lawful network traffic.  Addressing "natural business incentives" of service providers, Mr. Genachowski also endorsed network investment promotion and efficiency measures such as bandwidth usage-based pricing.
 
Chairman Genachowski touted his proposal as advancing a set of several core goals:

  • It would ensure that the Internet remains a powerful platform for innovation and job creation
  • It would empower consumers and entrepreneurs
  • It would protect free expression
  • It would increase certainty in the marketplace
  • It would spur investment both at the edge and in the core of our broadband networks  

Chairman Genachowski cited the Commission's responsibility in this area as "a cop on the beat to protect broadband consumers and foster innovation, investment and competition."
 
The Proposal also addresses mobile broadband, but to a lesser extent than fixed broadband.  Recognizing that mobile broadband is at an earlier stage of development, the Proposal includes transparency and a "basic no blocking rule", but only provides for close monitoring of the development of the mobile broadband market rather than outright restrictions.
 
Understandably, reaction is mixed in the industry and the FCC itself.  Comcast Executive Vice President David Cohen approved, stating "[the] proposal… strikes a workable balance between the needs of the marketplace and the certainty that carefully-crafted and limited rules can provide to ensure that Internet freedom and openness are preserved."  The New America Foundation's Open Technology Initiative called the proposal "a great victory for the largest telecom corporations and a sound defeat for those working to support innovation and the economic vibrancy that an open Internet facilitates."  Several FCC commissioners also spoke on the Proposal, including Commissioner Michael Copps who pointed out "[a]t issue is who will control access to the online experiences of consumers—consumers themselves or Big Phone and Big Cable gatekeepers." 
  
***Mr. Wadia recognizes Jong Cho's assistance in the preparation of this legal news alert.
 

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