TLJ on Genachowski’s ‘Net Neutrality’ Speech

TechLawJournal is a consistently high-quality subscription service that provides news, records, and analysis of legislation, litigation, and regulation affecting the computer, Internet, communications and information technology sectors. It reported this morning on FCC chairman Julius Genachowski’s speech proposing to regulate the provision of Internet service. The TLJ piece includes background that I think might benefit Cato@Liberty readers wishing to understand the issues better, so I asked for and received permission to republish it here.

[TLJ Report after the jump]

Federal Communications Commission (FCC) Chairman Julius Genachowski gave a speech [8 pages in PDF] in which he proposed that the FCC promulgate rules that contain network neutrality mandates.

The other two Democratic Commissioners promptly issued releases expressing their support. Thus, a majority of the Commissioners have announced their support.

Genachowski said that his policy goal is “preserving and maintaining an open and robust Internet”. He asserted that without FCC regulation “We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised”.

He stated in vague terms that the FCC should adopt rules the [sic] include the four principles of the policy statement [3 pages in PDF] adopted by the FCC in August of 2005, plus new principles of non-discrimination and transparency.

He announced that “I will soon circulate to my fellow Commissioners proposed rules prepared by Commission staff embodying the principles I’ve discussed, and I will ask for their support in issuing a notice of proposed rulemaking.”

He boasted that “we will be focused on formulating policies that will maximize innovation and investment, consumer choice, and greater competition”.

Genachowski gave a policy speech. The prepared text of his speech says nothing about where the FCC would derive statutory authority to promulgate the rules which he proposes. Nor did he address what would be the FCC’s strategy for evading and surviving judicial review of any new rules.

He argued that “the free and open Internet faces emerging and substantial challenges. We’ve already seen some clear examples of deviations from the Internet’s historic openness”.

He cited three events. First, he said that “We have witnessed certain broadband providers unilaterally block access to VoIP applications (phone calls delivered over data networks)”.

This is a reference to the FCC’s dealings with a small company named Madison River Communications. The FCC’s Enforcement Bureau was able to stop the VOIP blocking by consent decree [PDF] without resort to any network neutrality rules. The practice of VOIP blocking has not recurred. See also, story titled “FCC Stops Broadband Provider From Blocking VOIP Traffic” in TLJ Daily E-Mail Alert No. 1,089, March 7, 2005. That decree is DA 05-543 in File No. EB-05-IH-0110.

Second, he said that broadband providers have and implemented “technical measures that degrade the performance of peer-to-peer software distributing lawful content.”

This is a reference to the FCC’s August 2008 order [67 pages in PDF] pertaining to Comcast’s management of certain peer to peer traffic. That order is the subject of a petition for review now pending before the U.S. Court of Appeals (DCCir). See, story titled “FCC Asserts Authority to Regulate Network Management Practices” in TLJ Daily E-Mail Alert No. 1,805, August 4, 2008. That order is FCC 08-183 in Docket No. 07-52.

Third, he said that “We have even seen at least one service provider deny users access to political content.”

This is likely a reference to a brief dispute in 2007 between Verizon and the National Abortion Rights Action League (NARAL) regarding short code based services sent from and received by mobile phones. See, story titled “Verizon Wireless and Net Neutrality Advocates Clash Over Text Messaging” in TLJ Daily E-Mail Alert No. 1,647, September 27, 2007. See also, letter from Verizon Wireless to NARAL dated September 27, 2007, and NARAL’s web page titled “NARAL Pro-Choice America Wins Fight over Corporate Censorship”. See also, story titled “Public Knowledge Asks FCC to Declare that Blocking and Refusing to Carry Text Messages Violates Title II” in TLJ Daily E-Mail Alert No. 1,686, December 11, 2007. This proceeding is WT Docket No. 08-7.

In addition to these three events, Genachowski argued that there are three general reasons to be “concerned about the future of openness”.

First, he said that there is “limited competition among service providers”.

Second, he said that broadband service providers “rely upon revenue from selling phone service, cable TV subscriptions, or both. These services increasingly compete with voice and video products provided over the Internet. The net result is that broadband providers’ rational bottom-line interests may diverge from the broad interests of consumers in competition and choice.”

The third reason for concern, said Genachowski, “involves the explosion of traffic”.

He then announced that he would propose new rules, and described the content of those rules. He said, “I propose that the FCC adopt the existing principles as Commission rules, along with two additional principles that reflect the evolution of the Internet and that are essential to ensuring its continued openness.”

The four principles in the 2005 policy statement (with footnotes omitted) are as follows:

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to access the lawful Internet content of their choice.”

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement.”

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to connect their choice of legal devices that do not harm the network.”

“To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet, consumers are entitled to competition among network providers, application and service providers, and content providers.”

Genachowski said that his fifth principle is “non-discrimination – stating that broadband providers cannot discriminate against particular Internet content or applications.”

He elaborated that this means that “they cannot block or degrade lawful traffic over their networks, or pick winners by favoring some content or applications over others in the connection to subscribers’ homes. Nor can they disfavor an Internet service just because it competes with a similar service offered by that broadband provider.”

However, he added that there should be exceptions, such as “reasonably managing their networks”, for example, during “periods of network congestion”. He also cited “efforts to ensure a safe, secure, and spam-free Internet experience, or to enforce the law”.

He added that “open Internet principles apply only to lawful content, services and applications – not to activities like unlawful distribution of copyrighted works”. He said that “The enforcement of copyright and other laws and the obligations of network openness can and must co-exist.”

He also stated that the FCC should “evaluate alleged violations of the non-discrimination principle as they arise, on a case-by-case basis”.

Genachowski said that his sixth principle is “transparency”. By this he means that broadband service providers “must be transparent about their network management practices”. And, he noted that in the Comcast proceeding, referenced above, that Comcast initially acted “with no notice to subscribers or the public”.

FCC Commissioner Mignon Clyburn released a statement in which she said that “I fully support Chairman Genachowski’s intention to take affirmative measures to preserve the openness of the Internet.”

FCC Commissioner Michael Copps released a statement in which he said that “Chairman Genachowski’s bold announcement today is a significant further investment in safeguarding Internet Freedom. I salute him for it.” He praised each of the six items in Genachowski’s proposal. However, he did not endorse adopting rules according to Genachowski’s proposal. It is possible that he may seek further regulation of broadband service providers, or further changes to the FCC’s rules and declaratory rulings.