By Martin H. Bosworth
ConsumerAffairs.com
March 23, 2007
The Federal Communications Commission (FCC) has announced a formal Notice of Inquiry into the behavior and practices of players in the broadband Internet market. The inquiry, the agency said, will investigate how broadband providers are living up to the FCC's promise of encouraging broadband development and promoting "the open and interconnected nature of the public Internet."
The FCC said its inquiry would also explore adopting the principles of "nondiscrimination" of Internet traffic, commonly called "net neutrality," and how to define the principle if adopted.
The battle over net neutrality has shaped up as a hot-button political issue in the last year, with content providers and Internet activists claiming that major telecom and cable companies would use their market clout to force companies like Google and Yahoo to pay extra money to promote their services, and that services favored by certain companies would get priority "traffic rights" over others.
"Gathering this information will allow us to better monitor this market and determine the extent to which providers are acting consistently with our Internet Policy Statement," said FCC chair Kevin Martin. "We have the dual responsibilities of creating an environment that promotes infrastructure investment and broadband deployment and to ensure that consumers' access to content on the Internet is protected."
The "Internet Policy Statement" consists of four principles adopted by the FCC under previous chairman Michael Powell. The principles included the rights of consumers to have lawful access to the Internet, to attach devices and run applications that are legal and cause no harm, and to enjoy competition among service providers. The policy statement lacked any concrete options for enforcement in cases where the principles were not upheld.
FCC commissioner Michael Copps criticized the Policy Statement for not going far enough.
"We proceed too leisurely here," he said. "Rather than strike out and unflinchingly proclaim this agency's commitment to an open and non-discriminatory Internet, we satisfy ourselves with one tiny, timid step," Copps said. "We adopted our Four Principles of Internet Freedom nearly two years ago. And these issues come back to us in just about every major merger that comes before usand there have been a lot of those!"
Copps, along with fellow commissioner Jonathan Adelstein, opposed the mega-merger of AT&T; and BellSouth until AT&T; agreed to offer concessions to protect net neutrality for its basic Internet services for 36 months.
AT&T; has been one of the primary foes of net neutrality, with chairman Ed Whitacre famously claiming that companies like Google were "nuts" for not paying extra money to use his "pipes." After the concessions were offered, the merger was hurriedly approved on Dec. 29, 2006.
Since then, AT&T; has come under fire for blocking calls made using the FreeConference.Com multiple calling service, claiming the calls violated its own terms of service. Opponents claim that AT&T; is blocking services its subscribers are legally eligible to access, and point to this as an example of the need for net neutrality rules.
FCC chair Martin has been criticized by consumer groups and Congress for being too friendly to the needs of telecom companies over consumer interests. Martin was grilled at a recent House committee hearing for supporting new FCC rules that streamline video franchising rights for new companies trying to offer video services in neighborhoods. Critics charge that the new rules override state and local authority and favor telecom companies' new video offerings at the expense of existing cable services.
Martin's predecessor Powell recently signed on to the board of directors of Cisco Networks. Cisco has been a staunch opponent of net neutrality, as it stands to gain from selling network systems capable of prioritizing Internet traffic and offering faster services to richer clients.
Cisco's Bob Pepper -- himself a former FCC official -- recently penned an editorial lambasting net neutrality rules as "the wrong path of reduced competition, less consumer choice and greater government involvement and oversight."
A recent study conducted by University of Florida professor Kenneth Cheng found that ending net neutrality would harm consumers and companies alike. Companies would lose incentive to prioritize content and offer better service if the current infrastructure was upgraded, and content providers would have to pay extra fees to service providers to ensure their offerings were seen by viewers. Consumers would also lose by not being exposed to Web content they might have interest in, due to slower page load times and service.
