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June 28, 2007

FTC Says No to Net Neutrality Regulation

The Federal Trade Commission issued a report yesterday that cautions regulators from embracing net neutrality principles.  The Commission believes that it is premature to put regulations in place without first having experience in how the market develops.  Some net transport discrimination could have benefit to consumers according to the report.

From the press release:

As the report notes, certain conduct and business arrangements that broadband providers may pursue, including data prioritization, exclusive deals, and vertical integration into online content and applications, can benefit consumers. “The primary reason for caution is simply that we do not know what the net effects of potential conduct by broadband providers will be on all consumers, including, among other things, the prices that consumers may pay for Internet access, the quality of Internet access and other services that will be offered, and the choices of content and applications that may be available to consumers in the marketplace.”

The Commission is still committed to enforcing the antitrust laws and promoting competition according to its statement.  Commissioner Jon Leibowitz issued a concurring statement regarding the staff report.  The telecoms are thrilled at this development.  They say that they are not planning on downgrading services for public web sites, but will upgrade some delivery speeds to accommodate movies and other bandwidth intensive applications. 

Critics complain that there is no real competition between the telecom and cable network operators.  Once the market moves in this direction, they say, it will be impossible to put things back to how they are now.  That's undoubtedly true.  Congress has failed to enact any measures adopting net neutrality principles, while the DOJ, the FCC, and now the FTC are willing to wait and see what happens.  Who knows, maybe Microsoft and/or Google and Yahoo will build their own nationwide networks.  These companies have the money to ensure their content gets to their customers without anyone else dictating terms.  That would be something.

Stories are in Information Week, CNN Money, and Infoworld

June 28, 2007 | Permalink

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