FCC Passes Net Neutrality Rules

“We are adopting rules to preserve basic Internet values," FCC chairman Julius Genachowski said.

The FCC, in a vote split along party lines, passed "net neutrality rules" Tuesday that govern how providers such as phone and cable companies treat Web traffic. Reaction to the compromise measure was mixed in Hollywood.

The order prevents cable providers from limiting broadband access to rival content and video and gives the FCC the power to issue fines and injunctions against organizations that don't abide by the new regulations. The rules don't apply in the same way to cellphones because the agency voted to make wireless networks mostly free from rules that would block or slow Web traffic.

If nothing else, it was a victory for the Obama administration, which has made the creation of Internet rules of the road a priority.

"Today, for the first time, we are adopting rules to preserve basic Internet values," FCC chairman Julius Genachowski said. "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."

With the bill offering help in the battle against content piracy, MPAA president and interim CEO Bob Pisano commended the FCC "for recognizing that intellectual property enforcement helps protect jobs and strengthen this nation's economy.

"Combating IP theft is especially critical in an online world. 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. Notably, Internet service providers may take reasonable measures to address copyright infringement without running afoul of open Internet rules. Under no circumstances should open Internet rules be used to shield copyright infringers."

The WGA East, however, said the new rules "fail in the most fundamental ways -- permitting paid prioritization and all manner of discrimination in wireless.

"Our members write most of what people watch on television and in the movie theaters and increasingly, online. 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."


The WGA West took a more benign view, saying that it was “not all they hoped for” but it does “keep alive the fight to preserve a free and open Internet.”
The WGAW noted that it opposes the pending merger of Comcast and NBC Universal without strong conditions to protect competition and diversity and said the big threat to the Internet remains domination by the biggest companies.

“Today’s order does not answer the question of whether huge conglomerates will control news, entertainment and information on the Internet, but it takes significant steps in the right direction,” it said.

Genachowski spent a year piecing together rules that primarily impact wired providers like AT&T, Verizon, Comcast and Time Warner Cable. Opponents charge that the FCC doesn't even have the right to regulate the Internet, and Republicans say the rules will actually hurt development of the Web.

"The era of legal Internet arbitrage has dawned," said FCC commissioner Robert McDowell, one of two Republicans on the FCC who voted against the measure (the two Democratic commissioners and Genachowski voted for it).

In an article in Monday's Wall Street Journal, McDowell called the rules an "unprecedented step to expand government's reach into the Internet by attempting to regulate its inner workings. In doing so, the agency will circumvent Congress and disregard a recent court ruling."

The reference to a court ruling was to a U.S. Court of Appeals decision last summer that said the FCC may have authority to regulate radio, TV and phone lines but has never been given the right to regulate the Internet. The appeals court said the FCC went beyond its authority by stopping Comcast from blocking access to BitTorrent's peer-to-peer sharing application.

Democratic commissioners Michael Copps and Mignon Clyburn said that while the rules were not all they hoped, they believe they are a first step toward the government regulation of the Internet. Copps has called for additional rules to make it harder for opponents to challenge the measure in court.

Sen. Al Franken, D-Minn., also wrote Monday night that the rules do not go far enough. They "have the effect of actually relaxing restrictions on this kind of discrimination," he wrote. "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."

In any case, the legal and political challenges are expected to slow implementation of the rules.