May 07, 2010, 2:54 PM — Wounded from a court decision that stopped the government from regulating Internet service providers, the Federal Communications Commission has announced a new way to gain some control over the broadband industry. The proposal would let the FCC treat Internet transmissions like telephone communications, entailing more oversight, but would prevent government control over Web services, applications and e-commerce sites. Any move by the FCC is bound to draw cheers and jeers, but here are some of the pros and cons from both sides:
Pro: Web Services Love It
The Open Internet Coalition, which includes Web companies such as Google, Amazon and Netflix, applauded the FCC's proposal. The approach of regulating just the transmission side of the Internet keeps the government out of Web companies' hair, but also ensures that Internet service providers have to treat all their services equally.
Con: Cable Companies Hate It
FCC Chairman Julius Genachowski says that pursuing this middle ground of regulation won't create a chilling effect on broadband investment. The cable industry may beg to differ. Stocks fell after the FCC announced its proposal, and Cablevision Chief Operating Officer Tom Rutledge said the company would be "disappointed" if the rules went into effect. Uncertainty over the outcome of regulation is enough to upset investors, which in turn could sour cable companies on sinking more money into infrastructure.
Pro: Green Light for National Broadband Plan
When a federal appeals court ruled last April that the FCC couldn't prevent Comcast from throttling certain Internet services, Genachowski said the decision wouldn't affect a plan to provide 100 Mbps broadband to 100 million homes, and to offer free wireless Internet through unused television spectrum. However, Genachowski must not have been entirely convinced, as he says the new rules put the National Broadband Plan on firmer legal footing than ever, clearly defining the government's regulatory powers.
Pro: No Congress Required