Friday, October 31, 2014

FCC Chairman Floats 'Hybrid' Ruling on Net Neutrality

By Reuters
Friday, Oct. 31, 2014, 9:21 p.m.

WASHINGTON — The Federal Communications Commission chief is close to settling on a hybrid legal strategy for new Internet traffic rules that would treat part of the web network as a public utility, the Wall Street Journal reported Friday.

FCC officials last month listed a hybrid approach as one of various options they were considering for “net neutrality” rules. It would split broadband into a retail service, connecting Internet service providers with consumers, and a back-end one, linking content companies' servers with ISPs' facilities.

FCC Chairman Tom Wheeler is laying the groundwork for rules that would regulate the retail section more lightly under the agency's existing authority but apply stricter rules to the back end by classifying it more like a public utility, the Wall Street Journal reported. It cited people familiar with Wheeler's thinking.

The plan, which would have to win over at least two other FCC commissioners to be adopted, is unlikely to satisfy either the ISPs or the public interest community.

Stricter back-end regulation by reclassifying broadband to be more like an old telephone network is something long sought by some consumer advocates but strongly opposed by the ISPs, which would probably fight such a decision in court.

The Journal report said Wheeler remained skeptical of a flat-out ban on deals in which content companies' would pay ISPs to ensure smooth and fast delivery of their traffic.

Consumer advocates have opposed such “paid prioritization” arrangements. The FCC received a record 3.9 million comments after Wheeler proposed rules that would allow some “commercially reasonable” paid prioritization.

“Such an untested, too-clever-by-half approach is bad law and a bad idea,” Craig Aaron, CEO of media watchdog Free Press, said in a statement.

MoffettNathanson LLC analyst Craig Moffett said the market was likely to welcome a “grand bargain” approach.

“It neatly sidesteps the worst-case scenarios, and while interconnection regulation is certainly not good news for operators, neither is it a calamity,” he said. “Perhaps the most important question left to be answered is how the two sides of the aisle respond to today's very consciously floated trial balloon.”

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