US nears net neutrality compromise

 

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By Reuters and Stewart Mitchell

Posted on 21 Dec 2010 at 08:11

Regulators in the US are poised to adopt internet traffic rules that would govern how providers can ration access to their networks.

In a compromise net neutrality agreement that is likely to leave both industry and consumers unhappy, officials are set to rubber stamp proposals laid out by Federal Communications Commission chairman Julius Genachowski earlier this month.

The rules would ban internet providers from blocking lawful traffic, while recognising the need to manage network congestion and perhaps charge based on internet usage.

The rules, to be somewhat looser for wireless internet, could help ISPs deal with plans by a variety of companies to offer television services over the internet and open up potential new pricing models for ISPs.

Without regulation, rates could go up and up and up and emerging providers like Netflix and Hulu could have problems attracting user

"We're adopting a framework that will increase certainty for businesses, investors, and entrepreneurs. We're taking an approach that will help foster a cycle of massive investment, innovation and consumer demand both at the edge and in the core of our broadband networks," Genachowski said ahead of the meeting.

The FCC said it would monitor usage-based pricing for abuses and analysts said the model would make it easier for start-up content providers to compete with established media players.

"Without regulation, rates could go up and up and up and emerging providers like Netflix and Hulu could have problems attracting users," said Daniel Ernst, an analyst at Hudson Square Research.

Level 3 Communications, a company that helps Netflix stream videos online, has already accused Comcast of charging it unfair fees to deliver content to Comcast subscribers.

The FCC's ability to regulate the internet has been in doubt since an appeals court in April said the agency lacked the authority to stop Comcast blocking bandwidth-hogging applications.

Consumer concern

Public interest groups were, however, sceptical of the protection for consumers under the traffic rules, which look likely to push the cost burden of streaming services onto end users.

"These rules appear to be flush with giant loopholes," said Craig Aaron, managing director of Free Press, which has accused Genachowski of favouring industry over the public interest.

According to officials, the open internet order under discussion would will give both landline and mobile broadband services the flexibility to "reasonably" manage their networks, but that it would institute a no-blocking policy for landline internet providers that covers all lawful content, applications, services and devices.

Landline services would also be prohibited from discriminating against bandwidth-heavy content.

The rules for wireless carriers only ban the blocking of access to websites, or competing voice and video applications.

For more on net neutrality, pick up this month's issue to find out if it's the end of the net as we know it