Justice Dept. to FCC: Forget net neutrality

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WASHINGTON -- The Bush administration warned the FCC against approving any "network neutrality" regulations, arguing that requiring the big networks to treat all users equally could hamper innovation.

In a filing at the commission, Justice Department antitrust chief Thomas Barnett said regulations designed to prohibit the big phone and cable companies from controlling the network of wires and fiber-optic cables that makes up the Internet's backbone will stifle innovation.

"Consumers and the economy are benefiting from the innovative and dynamic nature of the Internet," Barnett said. "Regulators should be careful not to impose regulations that could limit consumer choice and investment in broadband facilities."

Precluding broadband providers from charging content and application providers directly for faster or more reliable service "could shift the entire burden of implementing costly network expansions and improvements onto consumers," the department wrote.

Differentiating service levels and pricing is a common and often efficient way of allocating scarce resources and satisfying consumer demand, Barnett said. Differentiated services respond to market demand and expand consumer choice, he explained.

While the Bush administration may be dissing the net neutrality idea, the legislative branch is not.

"The Justice Department's position is consistent with the Bush administration's failed approach to national broadband policy," said Rep. Ed Markey, D-Mass. "American consumers and entrepreneurs deserve better."

Markey is chairman of the House Commerce Committee's subcommittee on telecommunications and the Internet. Markey is considered one of Congress' most knowledgeable members on technology matters.

"The Bush administration's decision to oppose Internet freedom flies in the face of the open nature of the Internet, which has fostered unprecedented innovation and economic growth," he said. "Network neutrality safeguards would preserve the open architecture of the Internet and prevent companies from downgrading and discriminating against competitive Internet services and applications."

Markey's position is also backed up by many consumer advocates.

The Justice Department "failed to recognize that net neutrality is a protection for consumers and for Internet companies against discrimination by telephone and cable companies," said Gigi Sohn, of the not-for-profit advocacy group Public Knowledge. "Net neutrality would not restrict the types of services that telephone and cable companies could offer; such a policy would make certain that those companies had to do so in a non-discriminatory fashion as the law originally intended."

The FCC is examining the effect of any network neutrality regulation.

In June, the Federal Trade Commission reached a decision similar to the Justice Department's position.

At the time, FTC chairwoman Deborah Platt Majoras, a Bush appointee, said that without evidence of "market failure or demonstrated consumer harm, policymakers should be particularly hesitant to enact new regulation in this area."
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