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Wednesday, Dec. 22, 2010

FCC adopts Web rules

'Net neutrality' aims to protect competition

- MarketWatch
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WASHINGTON -- Federal regulators on Tuesday adopted controversial new rules meant to protect the Internet from interference, capping a fight that's run nearly a decade over whether such safeguards are even necessary.

The new rules approved by the Federal Communications Commission strengthen current agency guidelines to ensure fair play on the Internet, an idea known as net neutrality. The goal is to guarantee that consumers can reach any website they want at the prices and speeds they are used to.

Under these rules, cable-television and phone companies that control Internet networks, such as AT&T Inc. and Comcast Corp., would be barred from blocking access to competing applications such as Internet telephony or to other websites like Google or Netflix Inc.

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Consider Netflix. Since the movie-rental service began to offer video downloads, it's become one of the most heavily trafficked sites on the Internet. Without stricter rules, supporters say, Comcast could block video downloads from Netflix or force Netflix to pay a fee for the privilege.

"No authority should have the power to pick winners or losers on the Internet," said FCC Chairman Julius Genachowski, one of three Democrats on the agency's five-member commission to back the new rules.

Critics argue the Internet is already free and open, and they point out that violations of existing FCC guidelines are rare. They worry that new regulations will harm innovation, raise the cost of operating Internet networks and ultimately lead to higher prices for consumers.

"Nothing is broken in the Internet market that needs fixing," said Robert McDowell, a commissioner who voted against the proposal.

The new rules include notable exceptions. Internet operators can offer different tiers of service -- highly prices for faster access -- and wireless networks would be more lightly regulated. Companies would be allowed to exercise "reasonable" network management to ensure smooth Internet traffic.

The FCC vote, however, is unlikely to be the last word on Internet regulation.

Republicans in Congress plan to introduce legislation to roll back the agency's new rules, and a legal challenge is likely. The odds of reversal are high, however, legal analysts say.

"Attorneys are always conservative, but I'd peg the odds at 65 percent," said Mark McCarty, a partner in the technology group of Alston & Bird. "The FCC is in a tough spot."

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