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Blow dealt to network neutrality

FTC says rules sought for broadband providers could hurt innovation.

June 28, 2007|From Reuters

WASHINGTON — The Federal Trade Commission on Wednesday warned against regulations that would require providers of high-speed Internet service to treat all content the same way, saying such rules could stifle innovation.

So-called network neutrality proposals, backed by Internet companies such as Google Inc. and EBay Inc., would bar Internet service providers from charging extra fees to guarantee access to the Internet or give priority to some content.

In a report, the FTC sided with high-speed Internet providers such as AT&T Inc. and Verizon Communications Inc., saying the government should be cautious about such regulations.

"This report recommends that policymakers proceed with caution in the evolving, dynamic industry of broadband Internet access, which generally is moving toward more -- not less -- competition," FTC Chairwoman Deborah Platt Majoras said in a statement.

"In the absence of significant market failure or demonstrated consumer harm, policymakers should be particularly hesitant to enact new regulation in this area," Majoras said.

The concept of network neutrality is being studied by regulators at the Federal Communications Commission and has been the subject of much debate among lawmakers in Congress.

Some lawmakers tried unsuccessfully to get network neutrality legislation passed last year.

Companies such as EBay and Google worry that AT&T and Verizon will charge them more to get access to consumers or make it harder for consumers to access unaffiliated content.

The Internet access providers counter that they would not block access to public sites but want to offer private Internet online-based services faster speeds for uses such as downloading movies.

The high-speed providers welcomed the FTC report.

"Proposals to impose new regulation actually threaten further advancements in broadband Internet connections," said Tom Tauke, a Verizon executive vice president. "That hurts consumers by denying them new and better services."

But supporters of network neutrality rules scoffed at the premise of viable new competition that offers an alternative to the cable companies and major carriers.

"Despite the fervent wishes of the FTC staff, there is not a competitive market for high-speed Internet services," said Gigi Sohn, president of consumer advocacy group Public Knowledge.

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