FCC Advances Broadband-Regulation Plan Backed by Google, Opposed by AT&T

A divided Federal Communications Commission advanced a plan backed by Google Inc., EBay Inc. and Amazon.com Inc. to regulate Internet service providers over the opposition of carriers led by AT&T Inc.

The FCC, by a 3-2 vote, opened a process to seek comments on its legal authority to regulate how companies including AT&T, Verizon Communications Inc. and Comcast Corp. deliver high-speed Internet service, or broadband. All three Democrats endorsed the action and both Republicans dissented.

The vote is a step in FCC Chairman Julius Genachowski’s drive to reclaim authority undermined when a court ruled that the agency lacked jurisdiction to censure Comcast’s Web practices. The approach is “a middle ground” intended “to restore the status quo light-touch framework” that existed before the April court decision, Genachowski said today.

The agency needs legal backing to write net-neutrality rules that would bar companies from interfering with subscribers’ Web traffic, and to subsidize Internet connections for more homes.

The FCC is adding uncertainty that “makes providers and investors alike think twice about moving forward with network investments under this dark regulatory cloud,” said Republican Commissioner Meredith A. Baker. “This outcome can only harm consumers who need better, faster, more ubiquitous broadband.”

The agency is moving toward reclaiming authority Congress gave it, said Commissioner Michael Copps, a Democrat.

‘Meaningful Oversight’

“We are not talking, even remotely, about regulating the Internet,” Copps said. “We are talking about meaningful oversight of the infrastructure and services that allow Americans to get to the Internet.”

Subjecting Internet service providers to rules covering telephone companies “is a terrible idea,” Tom Tauke, a Verizon executive vice president, said in an e-mailed statement.

“‘The FCC should acknowledge that this is an issue Congress should address,” Tauke said.

Phone and cable companies are trying to build support in Congress for legislation that would avert FCC action, Paul Gallant, a Washington-based analyst with Concept Capital’s Washington Research Group, said in a note yesterday.

AT&T and Verizon were joined last month by the National Cable & Telecommunications Association, a trade group with members led by Comcast and Time Warner Cable Inc., in asking FCC officials whether “targeted legislation” would help clarify the agency’s authority.

‘Super Timely’

The FCC action “is super-timely because right now there are no rules of the road protecting consumers,” Markham Erickson, executive director of the Open Internet Coalition, a group led by Google, EBay and Amazon.com, said yesterday in an interview. The coalition supports net-neutrality rules.

The agency’s approach will help “preserve a free and open Internet and encourage innovation and investment,” Dish Network Corp. Chief Executive Officer Charlie Ergen said in a statement. The company, the No. 2 U.S. satellite television provider, provides subscribers with on-demand movies using broadband lines it doesn’t control.

Genachowski’s proposal is a way to protect consumers and assure access to the Internet, said Richard Whitt, Google’s Washington telecom and media counsel, in a blog posting.

“Broadband infrastructure is too important to be left outside of any oversight,” Whitt said.

In the proceeding started today, the FCC is asking whether it should regulate broadband using rules crafted for telephone service. The agency would choose not to apply some of the telephone rules, such as regulating prices, Genachowski said in a May 6 statement.

The FCC set a deadline of Aug. 12 for comments. It didn’t say when it might act.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

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