FCC Passes Net Neutrality Rules

With the support of Democratic members, commission passes new rules, but a court challenge is likely

Last Updated: December 21, 2010 @ 8:17 PM

Facing fierce criticism on both sides of the political aisle, the Federal Communications Commission passed new rules on Tuesday aimed at keeping the internet open and free. 

The five member commission voted along strict party lines, with the three Democratic members endorsing the net neutrality guidelines and two Republican commissioners dissenting. 

The new rules prevent cable providers from limiting broadband access to rival content, online video or other forms of internet traffic.

The FCC will impose fines and bring injunctions against offenders. 

"Today, for the first time, we are adopting rules to preserve basic Internet values," FCC Chairman Julius Genachowski said during the hearing. "These rules will increase certainty in the marketplace; spur investment both at the edge and in the core of our broadband networks, and contribute to a 21st century job-creation engine in the United States."

It also represented a rare chance for Genachowski to flex the FCC's muscles after being criticized for largely remaining on the fence during the cable industry's carriage fights and other debates. 

President Barack Obama hailed the commission's vote as a key step forward in making good on his pledge to protect net neutrality. 

"Today’s decision will help preserve the free and open nature of the Internet while encouraging innovation, protecting consumer choice, and defending free speech," President Obama said in a statement. "As technology and the market continue to evolve at a rapid pace, my Administration will remain vigilant and see to it that innovation is allowed to flourish, that consumers are protected from abuse, and that the democratic spirit of the Internet remains intact."

Though Genachowski’s rules were approved, it could be a rough road to implementation. They will still face opposition from Republican members of congress and a likely court challenge.

Particularly damaging to the FCC's rule-making abilities was a U.S. Court of Appeals decision last summer that said the commission — which can regulate broadcast TV and telephone landlines — has never been given authority to regulate the internet.

Republicans in congress argue that the House and Senate are the ones who should draft net neutrality rules, and there are already several competing pieces of legislation making their way through both chambers. With a power shift in Washington, the debate over who has the authority to govern the internet will continue to rage in the months ahead, even if a federal court does not strike down the FCC's new regulations. 

The stakes are high, and the FCC's approach to the problem has been widely divisive. The FCC has been in a year-long fight to ensure that broadband providers do not discriminate against legal internet traffic or impose steep fees for premium service — a move that companies like Comcast have flirted with levying on Netflix content.

But Tuesday's vote by the FCC left many unhappy. 

Liberals have charged that the FCC's actions don't go far enough, while conservatives complain that the order will impose new regulations that will strangle innovation. 

Republican commissioners said that the FCC did not have the constitutional authority to make the new rules and warned that the new guidelines would provoke a wave of legal challenges. 

"The era of legal Internet arbitrage has dawned," Commissioner Robert McDowell said. 

Even before the vote was taken, liberals were slamming Genachowski for working too closely with AT&T and other providers to draft the rules and for failing to apply the same regulations to mobile devices. 

""The draft Order would have the effect of actually relaxing restrictions on this kind of discrimination," Senator Al Franken (D-Minn.) wrote on the eve of the vote. "What's more, even the protections that are established in the draft Order would be weak because it defines 'broadband Internet access service' too narrowly, making it easy for powerful corporations to get around the rules."

Those on the left claim that the rules don't do enough to stop the phone and cable companies from dividing the internet into fast and slow lanes.

"“This proceeding was a squandered opportunity to enact clear, meaningful rules to safeguard the Internet’s level playing field and protect consumers," Craig Aaron, managing director of the public interest group Free Press, said in a statement following the vote.

But Genachowski has countered that his is a compromise solution that marries the business concerns of the cable and broadband industry with the idealism of "'open internet" groups. 

Hollywood, who has been worried that new rules would not do enough to crack down on online piracy, cautiously praised the FCC's  moves. 

“The Motion Picture Association of America commends Chairman Genachowski and the Commission for recognizing that intellectual property enforcement helps protect jobs and strengthen this nation’s economy," Bob Pisano, president and interim CEO of the Motion Picture Association of America, said in a statement. "Consistent with statements by the Obama Administration and recent law enforcement initiatives, the Commission understands that stemming the rising tide of online theft requires active participation by Internet service providers.” 

Industry guilds were far more critical. 

These tepid rules will be challenged in court and in Congress, and they fail in the most fundamental ways – permitting paid prioritization and all manner of discrimination in wireless.," The Writers Guild of America East said in a statement. "Today’s FCC vote will diminish our members’ ability to create and distribute innovative content and audiences’ ability to watch the content of their choice.”

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