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Network Neutrality to the Fore

The FCC honeymoon period is definitely over, and network neutrality is squarely back on the front burner in Washington.

For weeks, Republicans have been cautiously upbeat about the new commission and its chairman, Julius Genachowski, with Republican FCC Commissioner Robert McDowell going so far as to talk about all the right signals being sent vis-à-vis cooperation and communication. Congressional Republicans have also been publicly praising the new chairman's pledge of openness, and his promise to collect all the facts before drawing policy conclusions.

That is, until last week's announcement that the chairman was going to try—and will almost certainly succeed—to both adopt new Internet openness principles and further enshrine the ones the FCC already has. Suddenly, party and policy lines were quite visible once again.

McDowell and new Republican Commissioner Meredith Attwell Baker were taken aback somewhat, said commission sources, by the content of the chairman's major policy announcement at a Brookings Institution speech last week.

They may not have had much of a heads-up, but the White House was clearly on the same page. Genachowski's announcement came the same day President Obama gave a speech in Troy, N.Y., outlining an “innovation agenda,” including a lengthy shout-out for the new network neutrality rules.

“Another key to strengthening education, entrepreneurship and innovation in communities like Troy is to harness the full power of the Internet, and that means faster and more widely available broadband,” Obama told those in attendance, “as well as rules to ensure that we preserve the fairness and openness that led to the flourishing of the Internet in the first place.

“So today, FCC Chairman Julius Genachowski is announcing a set of principles to preserve an open Internet in which all Americans can participate and benefit,” the president continued. “And I'm pleased that he's taking that step. That's an important role that we can play, laying the ground rules to spur innovation. That's the role of government—to provide investment that spurs innovation and also to set up common-sense ground rules to ensure that there's a level playing field for all comers who seek to contribute their innovations.”

The president may have given the chairman a pat on the back, but congressional Republicans quickly took off the gloves, signaling their intention to introduce an amendment that would block any funding to the FCC for implementing the plan. Sen. Kay Bailey Hutchison (R-Texas) led the effort, joined by Sens. John Ensign (R-Nev.), Sam Brownback (R-Kan.), David Vitter (R-La.), Jim DeMint (R-S.C.) and John Thune (R-S.D.).

“I am deeply concerned by the direction [in which] the FCC appears to be heading,” Hutchison said in a statement last week. “Even during a severe downturn, America has experienced robust investment and innovation in network performance and online content and applications. For that innovation to continue, we must tread lightly when it comes to new regulations. Where there have been a handful of questionable actions in the past on the part of a few companies, the commission and the marketplace have responded swiftly.”

By contrast, she said, the FCC appeared to be engaging in “regulatory intervention into a vibrant marketplace.” By week's end, the amendment was on hold after the chairman reached out to Hutchison and crew, saying he wanted to talk to them about their concerns, according to a Senate source; the senators reserved the right to proceed if they did not like what they heard.

The plan, which will be introduced as a notice of proposed rulemaking next month at the FCC's public meeting, is to add two new open Internet principles to the FCC's current four—one that would prevent discrimination against particular Internet content or applications, and a transparency principle. Genachowski also said he would make the guidelines for enforceable regulations and apply them to wireless as well as wired broadband providers.

The announcement immediately divided Republicans and Democrats into their respective camps. Former acting FCC chairman Michael Copps has been pushing for at least a fifth principle for years, as well as the spirit of the sixth, so he was squarely behind the new plans, as was new Democratic Commissioner Mignon Clyburn. That adds up to three votes, which signals that the proposal is almost certain to go through.

Top congressional Democrats, from House Speaker Nancy Pelosi (D-Calif.) to Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.), praised the move. The tone from the Republicans on the commission remained collegial, but they clearly felt they had not been kept in the loop.

Both camps noted that they had not received a summary of the proposal in advance of the chairman's speech. A source familiar with the chairman's actions said he advised all of the other commissioners, both Republicans and Democrats, on the Friday before the Sept. 21 announcement, but it was not clear to what degree the factions had been briefed. By that Friday, the plan was already being reported by The Wall Street Journal, B&C and others.

“Every commissioner received a heads-up three days prior to the speech,” said Jen Howard, a spokeswoman for the chairman. “The speech was itself advance notice announcing that an open, months-long process would commence at the end of October on an issue that was a surprise to no one and extensively debated for years.”

Cable and phone network lobbyists were trying to put on their best faces last week while filling their responses with caveats and cautions. NCTA Chairman Kyle McSlarrow, for example, “applauded” the chairman's “very thoughtful speech” and “welcomed” his statement that the facts would not be predetermined. But he added that Genachowski “may have a different view about the state of competition,” and warned of undermining “the very dynamism of the Internet.”

Patrick Maines, president of media company-backed communications think tank Media Institute, likened lobbyist efforts to find positives in the plan to “a man about to be executed, seizing on the offer of a last cigarette as a chance to spin or delay the inevitable.”

One beneficiary of the network neutrality issue could be local broadcasters and cable programmers, specifically in terms of the bottom line. Radio and TV ads from phone companies were hitting the airwaves in Washington last week, talking about the openness and choice they say they already provide. The fighting, as they say, is in rounds.

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