FCC chairman proposes Net neutrality rules

Julius Genachowski says an agency panel's vote could formalize current policies that require Internet providers to treat all Web traffic equally.

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By Julianne Pepitone, CNNMoney.com staff reporter

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NEW YORK (CNNMoney.com) -- The chairman of the Federal Communications Commission outlined rules on Monday that would prohibit Internet providers from selectively blocking Web content and applications.

FCC chairman Julius Genachowski said his proposal would formalize the concept of "Net neutrality." On Monday he added two tenets to an existing set of four industry guidelines that have been recommended by the agency since 2005.

An FCC panel will vote on whether to turn these guidelines into official commission rules sometime in October.

"This is not about government regulation of the Internet," Genachowski said. "It's about fair rules of the road for companies that control access to the Internet."

The principle of Net neutrality dictates that all Web traffic should be treated equally by Internet access providers, and has been a source of contention since the Internet's inception decades ago. So far, the Web has been largely self-regulated.

What's at stake

The Net neutrality debate pits large Internet providers like AT&T (T, Fortune 500) and Comcast (CCW) against content and application providers like Google (GOOG, Fortune 500) and Skype that rely on those connections to deliver their Web pages and programs to consumers.

At issue is the fact that data-heavy applications, like a video from YouTube for instance, can clog and slow down Internet connections, disrupting service for customers and costing providers money.

Internet providers argue that they should be free to block or manage content that taxes their networks, unhindered by any regulation, while content providers like Google say that selective blocking is unfair and stymies innovation.

"Right now [Genachowski] is taking the middle of the road, but that will be tough once they try to issue specific rules," said Gartner Research analyst Alex Winogradoff. "It all sounds good, but until we see the rules we won't know how it will affect the marketplace," he added. "My concern is that the devil is in the details."

The FCC walks a fine line, Winogradoff said, because providers could challenge either overly specific or overly vague rules in court.

In Monday's speech to the Washington-based think tank The Brookings Institution, Genachowski cited the open-system design of the Internet as the main driver behind the way it has revolutionized the world.

"The Internet's creators didn't want the network architecture -- or any single entity to pick winners and losers," Genachowski said. "Because it might pick the wrong ones."

The three Democrats on the FCC panel have said they support net neutrality, and they represent a majority of the five members. Republicans have mostly opposed Net neutrality rules, arguing that Internet self-regulation has worked well and that the FCC doesn't need to become involved.

If the FCC passes Genachowski's proposal, it will then turn the following six principles into official commission rules.

1. Accessing content. The first rule states that consumers should not be limited in the content they choose to view online, as long as it's legal.

2. Using applications. Internet users should be able to run any application they want as long as they don't exceed service plan limitations or harm the provider's network.

3. Attaching personal devices. Consumers should be permitted to connect products they buy to their Internet connection, as long as the devices operate within the service plan and do not harm the network or enable theft of service.

4. Obtaining service plan information. Customers should be able to easily review their options when buying Internet service plans and learn about how those plans protect against spyware and other invasions of privacy.

5. New rule: Non-discrimination. Internet providers would be prohibited from selectively blocking or slowing Web content or applications.

6. New rule: Transparency. Providers would be required to make their network management practices clear and available to consumers. To top of page

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