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August 12, 2010

FCC Chairman Julius Genachowski is saying that New Neutrality could soon be a thing of the past, whether some like it or not.

Since a federal court ruling in April gutted his power to regulate Internet service providers, Genachowski has struggled in vain to regain authority over wireless carriers such as Verizon, AT&T and Comcast by proposing new rules and holding closed-door talks with wireless industry players and companies directly involved in mobile communications.

But the battle appears a lot more complicated than he ever expected, and seems to have more twists and turns than the Monte Carlo Grand Prix.

Genachowski's predicament deepened Monday when the chief executive officers of Google and Verizon, Eric Schmidt and Ivan Seidenberg, suggested that the wireless industry embrace net neutrality, well up to a point that is...

They would exempt from Internet open-access rules wireless networks and any managed services delivered over wires, such as health-care monitoring, special entertainment events, and... well, gambling!

Schmidt and Seidenberg offered as an example an opera performance streamed in 3-D over the Internet. Verizon would be paid a premium to send the program to opera buffs more quickly and at higher quality. Now, with Congress unable to agree on whether to stop companies from carving up the Internet, Genachowski is left with few choices.

The FCC Chairman wants to uphold President Barack Obama’s campaign pledge to protect the open Internet, even as the wireless industry gets set to impose restrictions.

Throwing fuel on the fire, the Google-Verizon proposal wasn't well received since Google had been a very strong supporter of net neutrality, said Darrell West, vice-president of governance studies at the Brookings Institution in Washington.

The proposal is in keeping with Google’s longtime advocacy of an open Internet, Schmidt said. But Google seems to be laying the groundwork for tiered pricing, and “the Web is going to become more like other parts of the economy,” West said.

Google's Schmidt said “We’re trying to show some leadership. I have no objection to other people trying to show some leadership, too, but something’s got to happen.”

Well happen it probably will, and certainly not to everybody's advantage, at least not to the average Internet user, and this is at the root of the whole issue.

Verizon’s willingness to agree to clear net-neutrality rules for its wired business was “pleasantly surprising,” Schmidt said. “They’re serious.”

Well, of course they are!

The exemption for managed services merely recognizes what Verizon already offers through its paid FiOS broadband service providing TV, phone and Internet access.

Others in the past have openly criticized Google for what they called its abandonment of the open Internet. “Google has taken a big step back in people’s eyes,” said Craig Moffett, an analyst with New York-based Sanford Bernstein & Co.

“The company that’s supposed to not be evil is suddenly being characterized by the net neutrality crowd as the arch-villain,” added Moffett.

For its part, the FCC has tried the best it could in the last nine weeks to strike its own accord in talks with the wireless industry. Unable to reach any consensus, Genachowski ended the discussions last week. “Any deal that doesn’t preserve the freedom and openness of the Web for consumers and entrepreneurs will be totally unacceptable to the FCC,” he said.

Genachowski declined to comment on the Google-Verizon deal, spokeswoman Jen Howard said in an e-mail.

Public-interest organizations rejected the deal. Joel Kelsey, political adviser for Washington-based consumer advocacy group Free Press, said the pact “would give companies like Verizon, Comcast, and AT&T the right to decide which content will move faster and which should be slowed down. That's totally unacceptable.”

Genachowski, an Obama appointee who leads a 3-2 Democratic majority, could argue that rules written for telephone service provide the authority he needs to require that Internet service providers treat traffic equally. If he tries to apply the phone rules to broadband, wireless carriers and congressional Republicans would protest vehemently some argue.

Cable and traditional landline phone companies say phone-style rules could lead to rate regulation, and they say that prospect would delay investments to upgrade the Web. Or will it? It all depends on how and from what angle you look at this.

So far, the FCC Chairman declines to say when he might put phone-style rules to a vote by the FCC. “He needs to act real soon,” said Gigi Sohn, president of Public Knowledge, a Washington-based group that favors net neutrality.

“The more he delays, the more he gives the opposition time,” added Sohn.

If Genachowski goes that route, “he’s going to be sued,” said Representative Cliff Stearns of Florida, the top Republican on the House subcommittee on communications, technology, and the Internet.

“We’re not going to get innovation if the government steps in, you can count on that,” added Stearns.

The whole issue of net neutrality is taking on a whole new perspective and is rapidly getting more and more complicated as everyday passes by.

Some critics are now saying that Genachowski isn't tough enough as the Chairman of a federal agency that is supposed to protect the interests of wireless users, not just the companies that provide the wireless services.

Let's hope they all find an acceptable solution for all concerned, especially the average Internet user.

We will keep you posted.

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Source: The FCC.