NEW YORK – Wireless carriers shouldn't be allowed to block certain types of Internet traffic flowing over their networks, the chairman of the Federal Communications Commission chairman said Monday in a speech that drew a cool response from the industry.
Unless it could be done carefully, the plan risks stifling investment in Internet access, telecommunications executives said. Their sentiments were echoed by Republicans in Washington, who questioned whether the FCC was on the verge of making unprecedented steps to regulate the Internet.
FCC Chairman Julius Genachowski said wireless carriers should be subject to the same "open Internet" principles that the agency has begun to apply to home broadband providers. That may mean that a carrier couldn't, for example, ban the use of file-sharing services on its wireless network, which AT&T Inc. does now.
The government also has been investigating Apple Inc.'s process for approving programs for its iPhones, but Genachowski isn't directly addressing manufacturers' right to determine which applications run on their devices.
Essentially, Genachowski wants to codify the principles the FCC has already been applying to wired Internet traffic -- and extend them to wireless.
But it's unclear how the principles would apply in practice. The proposal is the starting point for a process to hammer out detailed rules in the coming months. Genachowski left the door open to treating wireless networks differently than wired networks in the final regulations, even though the same broad principles will be applied to both technologies.
Jim Cicconi, AT&T's top executive in Washington, said the company would be "very disappointed" if the FCC has already concluded that it needs to "regulate wireless services despite the absence of any compelling evidence of problems or abuse."
Last year, the FCC sanctioned Comcast Corp. for secretly hampering file-sharing traffic by its cable-modem subscribers. In that ruling, the agency relied on broad "principles" of open Internet access that hadn't previously been put to the test. The cable company filed suit, saying the FCC didn't have the authority to tell it how to run its network. The case is still in federal appeals court.
Genachowski is now proposing to make it a formal rule that Internet carriers cannot discriminate against certain types of traffic by degrading service. That expands on the principle that they cannot "block" traffic, as articulated in a 2005 policy statement.
Internet service providers, both wired and wireless, are struggling with the question of how to distribute network capacity among their subscribers. Heavy users can overwhelm cellular towers and neighborhood cable circuits, slowing traffic for everyone.
At the same time, consumer advocates and Web companies like Google Inc. want to safeguard what has been an underlying "Net neutrality" assumption of the Internet: that all types of data are treated equally. If the carriers can degrade or block traffic, they become the gatekeepers of the Internet, able to shut out innovation, these critics say.
Comcast has already changed its system to one that does not look at what types of traffic subscribers are using. Instead, it throttles back the speed of heavy users if there is congestion on the network. However, there are other companies that might fall afoul of the new principle. Cox Communications, another cable company, has been testing a system that slows traffic that it deems less time-sensitive, like file downloads and software updates, to keep Web pages, streaming video and online games working faster. Cox declined to comment.
In his webcast speech Monday at the Brookings Institute in Washington, the FCC chairman also proposed to make it a formal rule that Internet service providers have to tell customers about how they manage traffic to handle congestion. Some companies might be managing traffic in subtle ways without notifying customers.
David Young, vice president of federal regulatory affairs at Verizon Communications Inc., said he was pleased that Genachowski said he favored a light touch in setting up the new regulatory framework. If Internet carriers aren't free to experiment with different ways of treating traffic, development of the technology might be slowed, Young said.
"The concern is that it will stifle innovation, investment and growth," he said. "To dramatically change the 15-year policy of the United States government to not regulate the Internet is a pretty radical thing and should be driven by a very real and present need to do so."
David Cohen, executive vice president at Comcast, said he welcomed the "dialogue" suggested by the FCC chairman, but also said it would be important to first figure out if there are "actual and substantial problems that may require rules."
President Barack Obama, who appointed Genachowski to the FCC, made campaign promises to support Net neutrality. He applauded Genachowski's proposal in a speech Monday in Troy, N.Y., saying well-crafted regulation of the Internet would encourage investment and innovation.
The other two Democratic commissioners on the five-seat FCC said Monday they supported the proposal, which will give Genachowski a majority to push through the proposal. The two Republican commissioners, Robert McDowell and Meredith Baker, urged caution, suggesting that new regulations not be based on a need to "alleviate the political pressures of the day."
Meanwhile, Republican Sen. Kay Bailey Hutchison of Texas sought to stop the proposal outright, introducing an amendment to an appropriations bill that would deny the FCC the funding to explore and develop new regulatory mandates. It was cosponsored by five Republicans.
"The case has simply not been made for what amounts to a significant regulatory intervention into a vibrant marketplace," Hutchison said in a statement.
Ben Scott, policy director at advocacy group Free Press, which complained to the FCC about Comcast's old network management practices in 2007, said the Internet is now of such importance that government will have to take a role in making sure it works optimally.
"It is inevitably going to have a regulatory structure around it," Scott said. "... What we're deciding is: What is it going to look like?"
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