Approval of Internet traffic rules likely: analysts

WASHINGTON Wed Dec 15, 2010 4:54pm EST

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WASHINGTON (Reuters) - Contentious Internet traffic rules facing a vote next week are likely to be adopted without radically veering from a proposal unveiled earlier in the month, telecommunications policy analysts said on Wednesday.

The Federal Communications Commission will vote on December 21 on whether to adopt regulations that ban the blocking of lawful traffic but allow Internet service providers to ration Web traffic on their networks.

The proposal laid out two weeks ago by FCC Chairman Julius Genachowski was met with concern from the other members of the FCC, putting in question the likelihood of winning over a majority of the five-member FCC.

The two Republican commissioners have objected to FCC action on Internet rules, saying the Internet is best able to thrive in the absence of regulation. And Genachowski's two fellow Democrats on the panel could withhold support from any measure they view as too weak.

But analysts said commissioners Mignon Clyburn and Michael Copps, the Democrats on the panel, are more likely to consider it in the majority's interest to move ahead with so-called net neutrality rules.

"There aren't really any better options for Copps and Clyburn than to support the chairman, despite their preference for tougher rules," said Paul Gallant, an analyst with MF Global.

"After the November elections, the chairman's room to maneuver on net neutrality got a lot narrower," he added.

Net neutrality rules would determine whether high-speed Internet providers should be allowed to block or slow information or charge websites for a "fast lane" to reach users more quickly.

Genachowski's proposal is more flexible for wireless broadband, acknowledging that wireless is at an earlier stage of development than terrestrial Internet service.

High-speed and mobile Internet providers like Comcast Corp, Verizon Communications and AT&T Inc are likely to oppose any regulations that seek to go beyond Genachowski's initial proposal.

"Our sense is an order likely will be approved, with some modifications, but not radical changes, to the draft, given the tightrope the FCC leadership appears to be walking," Stifel Nicolaus analysts said in a research note.

Stifel Nicolaus is particularly plugged in to FCC developments, with analyst Rebecca Arbogast having previously been a division chief at the agency.

A possible tweak of Genachowski's initial proposal could include clearer language against paid prioritization, Stifel Nicolaus analysts said, but strengthening the rules much further could prompt legal challenges from companies.

"Party loyalty will trump some of the policy differences," Medley Global Advisors analyst Jeffrey Silva said of Copps and Clyburn's potential reasons not to defect from the chairman.

Strengthening rules for wireless carriers beyond anti-blocking and transparency provisions, which Clyburn has supported, would probably be a deal-breaker for industry support of the regulations, Silva said.

"There's not a lot of room to tinker with the compromise that's been struck without threatening the compromise," Silva said.

Even if the rules are adopted, lawmakers are likely to challenge the rules, as Republicans have been vocal that they oppose any FCC action geared at governing the Internet.

(Reporting by Jasmin Melvin, editing by Dave Zimmerman and Matthew Lewis)

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Comments (1)
Danw13 wrote:
There’s absolutely no way in hell the FCC should be allowed to regulate the Internet without the input of our Congressional Members as they are the ones who will approve regulation on anyone weather it’s the FCC, USDA, EPA or other Departmental agencies. What the FCC is trying to do is avert or bypass Congress by not crossing the line where it would cause Companies like AT&T, Comcast, AOL or others to feel they were infringed upon under the law. The FCC should leave well enough along as this is nothing more than the FCC trying to stick the nose of the Camel under the tent, and before yo know it the Citizen’s are going to be taxed again because of the regulation the FCC was allowed to impose on all who use the internet. This must be stopped now not later and say we should of would of could have not regulated the internet and like the old saying goes if it’s not broke don’t fix it and leave well enough alone. Good grief when is Gov’t or the arm of Gov’t gonna learn that the private sector really does run like a well oiled machine when Gov’t stays out of the way and allows the good to succeed and those who try to screw the average people eventually get forced out of the business. Not only will that happen, but by keeping regulation out of the private sector also encourages those in the markets to compete where everyone is allowed to play on a even playing field, and helps to sustain market rates based on of course what the market will or will not allow with respect to rates influx, so just leave well enough alone !!!

Dec 16, 2010 10:49am EST  --  Report as abuse
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