FCC chairman Julius Genachowski delivered Monday on President Obama's promise to back "net neutrality." But he went much further than merely seeking to expand rules that prohibit ISPs from filtering or blocking net traffic – he proposed that they cover all broadband connections, including data connections for smartphones.

Genachowski, Obama's law school classmate, announced in a speech Monday at the Brookings Institution his intent to codify and expand the four current broadband principles (.pdf) known as the Four Freedoms and extend them to all broadband connections. He said that an open internet is necessary for economic growth and democratic participation. The rules were originally applied only to wireline broadband services, and the FCC kept postponing any ruling on whether they also applied to wireless services.

"The Internet’s creators didn't want the network architecture — or any single entity — to pick winners and losers," Genachowski said, embracing what is known as the end-to-end principle. "The principles that will protect the open Internet are an essential step to maximize investment and innovation in the network and on the edge of it — by establishing rules of the road that incentivize competition, empower entrepreneurs, and grow the economic pie to the benefit of all."

So-called "Net neutrality" is shorthand for the idea that the government should mandate that ISPs should largely act as dumb pipes that transmit data across the net without regards to what is in the data packets. Today's announcement marks a huge win for advocates say the rules are necessary to keep ISPs from stifling innovation by erecting tollbooths and created tiered access plans.

But others argue that consumer pressure will keep the net open and the rules will stifle attempts at innovation, such as finding ways to prioritize video calls over less urgent traffic such as photo uploads. ISPs balk at the rules, since they have grown envious of the profits of companies like Yahoo and Google, who they see as free riders on their infrastructure.

The current rules, which never went through an official rule-making process and are being contested in court by Comcast, give broadband consumers the right use whatever services, applications and devices they like, so long as they don't harm the network.

Genachowski proposes adding two more principles:

broadband providers cannot discriminate against services or applications by slowing them down broadband providers must tell customers how its engineers manage the network when it gets congested

The first new rule seeks to prevent cable ISPs from slowing down online video services and 3G providers from messing with internet calling services like Skype.

Those rules are necessary because there is little competition in the broadband market, Genachowski added. "The net result is that broadband providers' rational bottom-line interests may diverge from the broad interests of consumers in competition and choice," Genachowski said.

The second new rule is intended to prevent a repeat of Comcast's blocking of peer-to-peer traffic, which was discovered by an engineer having trouble sharing public-domain barbershop-quartet songs on the net. Comcast denied for months that it was blocking the traffic, and only after a year of substantial pressure from the FCC did the company explain what it was doing.

All six principles will become part of an official rule-making process starting in November, Genachowski said. That will means a few rounds of public comment and much backroom negotiating among the FCC five commissioners, currently comprised of three Democrats and two Republicans.

But both longtime commissioner Michael Copps and the newly appointed Mignon Clyburn quickly issued statements supporting Genachowski, signaling that only the details are up for discussion.

The nation's largest broadband providers and the wireless industry will surely strenuously objected to the proposal.

The former have argued that the rules aren't necessary, since consumers will simply switch away from any service that doesn't play fairly. They also say their engineers need to have the freedom to tinker with traffic in order to stop spam and viruses, as well as to keep the system running in times of peak traffic.

For its part, the wireless industry says that new rules will stifle innovation and that wireless networks are too complicated to allow consumers to use whatever compatible device they like, even though buying a smartphone and service separately is common outside the United States.

"Unlike the other platforms that would be subject to the rules, the wireless industry is extremely competitive, extremely innovative, and extremely personal," said Chris Guttman-McCabe, a VP for the CTIA-The Wireless Industry, the industry's lobbying group. "How do the rules apply to the single-purpose Amazon Kindle? How about the efforts from Apple and Android, Blackberry and Nokia, Firefly and others to differentiate the products and services they develop for consumers?"

Genachowski's announcement marks a big win for consumer groups such as Public Knowledge which have mobilized millions of netizens over the last few years to fight for new rules and who have complained that the nation's telecoms held sway over the FCC.

"FCC Chairman Julius Genachowski struck exactly the right balance this morning when he announced a plan to require a free and open internet," said Gigi Sohn, the president of Public Knowledge, in a press release. "The chairman's proposals for additional transparency in how companies manage their traffic, coupled with new rules prohibiting big telephone and cable companies from discriminating against some services in favor of others will go a long way to freeing investment not only in the network but also in new services and features."

It's clear public interest groups, not the incumbent telecoms, have a friend in the new chairman, who finished his speech Monday in a rousing call to action.

"We are here because [...] Internet pioneers had unique insights about the power of open networks to transform lives for the better, and they did something about it," Genachowski said. "Our work now is to preserve the brilliance of what they contributed to our country and the world. It's to make sure that, in the 21st century, the garage, the basement, and the dorm room remain places where innovators can not only dream but bring their dreams to life. And no one should be neutral about that."

Indeed, neither the telecoms nor the interest groups will not be neutral or silent about that in the coming fight.

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