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FCC Commissioners Support Open Internet Rule

by John Poirier and Sinead Carew

WASHINGTON/CHICAGO - U.S. communications regulators voted unanimously to support an open Internet rule that would prevent telecom network operators from barring or blocking content based on the revenue it generated.

The proposed rule now goes to the public for comment until Jan. 14, after which the Federal Communications Commissions will review the feedback and possibly seek more comment. A final rule is not expected until the spring of next year.

"I am pleased that there is broad agreement inside the commission that we should move forward with a healthy and transparent process on an open Internet," FCC Chairman Julius Genachowski said on Thursday.

The vote came despite a flurry of lobbying against the net neutrality rule by telecom service providers like AT&T Inc (T.N), Verizon Communications Inc (VZ.N) and Qwest Communications International Inc (Q.N), which say it would strip them of the ability to manage their networks effectively and that it would stifle innovation and competition.

The rule would prevent operators from discriminating against any legal content a third party wants to deliver to consumers on their networks, though it allows for "reasonable" network management to unclog congestion, clear viruses and spam, and block unlawful content like child pornography or the transfer of pirated content.

The full FCC slate of three Democrats, led by Genachowski, and two Republicans voted in favor of issuing a proposed network neutrality rule for public comment.

But the two Republicans, Robert McDowell and Meredith Attwell Baker, did express concern with the content of the rule, saying they do not share the majority's view that the Internet is showing breaks and cracks and that the government is the best tool to fix it. They also questioned whether the FCC has the legal authority to regulate the Internet network.

Nonetheless, the vote was 5-to-0 for proceeding with the rule-making, and 3-to-2 for approving the notice's language in its entirety, said Jen Howard, an FCC spokesman.

The FCC will accept public comments until Jan. 14, then it will review them and can ask for further comment with replies due by March 5.

NET NEUTRALITY

Advocates of net neutrality such as Google Inc (GOOG.O), Amazon.com Inc (AMZN.O) and public interest groups say Internet service providers must be barred from blocking or slowing traffic according to how much revenue the content generates.

But service providers say the increasing volume of bandwidth-hogging services, such as video sharing, requires active management of their networks.

AT&T President of Operations John Stankey said he was anticipating the rule with as much dread as if he was going to the funeral of a dear friend.

"Regulators should understand that there's plenty of competition in this market," Stankey said at the Supercomm trade show in Chicago.

Late on Wednesday, Verizon Wireless softened its opposition by issuing a joint policy blog statement with Google. They said they believe it is essential that the Internet remain an unrestricted and open platform.

Google and Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc (VOD.L), are partnering to develop an Android-based mobile phone.

"We have cleared the first hurdle in this process, and are on the road towards creating a framework that promotes innovation and consumer choice on the Internet," said the Washington-based Open Internet Coalition, which represents Google, Amazon and eBay Inc (EBAY.O).

With the threat of of a court fight looming, Democrats in Congress are mulling legislative options to promote net neutrality. But Senator John McCain, an Arizona Republican, said he introduced legislation on Thursday aimed at prohibiting the FCC from enacting rules to regulate the Internet.

(Additional reporting by Steve Holland; Editing by Tiffany Wu and Lisa Von Ahn, Phil Berlowitz)

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