* All 5 commissioners vote to seek public comment on rule
* Two Republican commissioners have some reservations
* Draft rule would allow for 'reasonable' net management
* Public comments accepted until Jan. 14
* Telecom firms worry rule would hamper network management
(Adds vote by commissioners, quotes, background)
By John Poirier and Sinead Carew
WASHINGTON/CHICAGO, Oct 22 U.S. communications
regulators voted unanimously Thursday to support an open
Internet rule that would prevent telecom network operators from
barring or blocking content based on the revenue it generates.
The proposed rule now goes to the public for comment until
Jan. 14, after which the Federal Communications Commissions
will review the feedback and possibly seek more comment. A
final rule is not expected until the spring of next year.
"I am pleased that there is broad agreement inside the
commission that we should move forward with a healthy and
transparent process on an open Internet," FCC Chairman Julius
The vote came despite a flurry of lobbying against the net
neutrality rule by telecommunications service providers like
AT&T Inc (T.N), Verizon Communications Inc (VZ.N) and Qwest
Communications International Inc (Q.N), which say it would
strip them of the ability to manage their networks effectively
and would stifle innovation and competition.
The rule would prevent operators from discriminating
against any legal content a third party wants to deliver to
consumers on their networks, though it allows for "reasonable"
network management to unclog congestion, clear viruses and
spam, and block unlawful content like child pornography or the
transfer of pirated content.
The full FCC slate of three Democrats, led by Genachowski,
and two Republicans voted in favor of issuing a proposed
network neutrality rule for public comment.
But the two Republicans, Robert McDowell and Meredith
Attwell Baker, did express concern with the content of the
rule, saying they do not share the majority's view that the
Internet is showing breaks and cracks and that the government
is the best tool to fix it. They also questioned whether the
FCC has the legal authority to regulate the Internet network.
Nonetheless, the vote was 5-to-0 for proceeding with the
rulemaking, and 3-to-2 for approving the notice's language in
its entirety, said Jen Howard, an FCC spokesman.
The FCC will accept public comments until Jan. 14; then it
will review them and can ask for further comment, with replies
due by March 5.
"We commend the FCC for beginning the process," said
Senators Byron Dorgan, a North Dakota Democrat, and Olympia
Snowe, a Maine Republican, in a joint statement. They proposed
a net neutrality bill in the last session of Congress.
Advocates of net neutrality such as Google Inc (GOOG.O),
Amazon.com Inc (AMZN.O) and public interest groups say Internet
service providers must be barred from blocking or slowing
traffic according to how much revenue the content generates.
But service providers say the increasing volume of
bandwidth-hogging services, such as video sharing, requires
active management of their networks.
AT&T President of Operations John Stankey said he is
anticipating the rule with as much dread as if he were going to
the funeral of a dear friend.
"Regulators should understand that there's plenty of
competition in this market," Stankey said at the Supercomm
trade show in Chicago.
Verizon Communications warned of unintended consequences
from government rulemaking and added it is seeking "common
ground" with others in the industry on policies that would
apply to all.
"The Internet ecosystem is serving consumers very well, and
there is no problem that requires new government regulation,"
said Tom Tauke, executive vice president of policy and
Late on Wednesday, Verizon Wireless softened its opposition
by issuing a joint policy blog statement with Google. They said
they believe it is essential that the Internet remain an
unrestricted and open platform.
Google and Verizon Wireless, a joint venture of Verizon
Communications and Vodafone Group Plc (VOD.L), are partnering
to develop an Android-based mobile phone.
"We have cleared the first hurdle in this process, and are
on the road towards creating a framework that promotes
innovation and consumer choice on the Internet," said the
Washington-based Open Internet Coalition, which represents
Google, Amazon and eBay Inc (EBAY.O).
With the threat of of a court fight looming, Democrats in
Congress are mulling legislative options to promote net
neutrality. But Senator John McCain, an Arizona Republican,
said he introduced legislation on Thursday aimed at prohibiting
the FCC from enacting rules to regulate the Internet.
(Additional reporting by Steve Holland; Editing by Tiffany Wu
and Gerald E. McCormick, Phil Berlowitz)