Business groups question net neutrality rules

Three trade groups representing U.S. businesses have called on the U.S. Federal Communications Commission to back away from plans to create formal network neutrality rules, saying new regulations could hurt innovation and development of broadband to rural areas.

Representatives of the U.S. Chamber of Commerce, the National Association of Manufacturers (NAM) and the Telecommunications Industry Association (TIA) questioned the need for the FCC to pass new rules prohibiting broadband providers from selectively blocking Web traffic. New regulations could slow down investment that broadband providers make in their networks, said Jason Goldman, counsel for telecommunications and e-commerce at the Chamber.

"The broadband market is flourishing," Goldman said during a press conference. "Broadband service providers are investing tens of billions of dollars every year to upgrade their networks. Broadband-enabled devices and applications are being released daily."

Broadband is creating new jobs, he added. Instead of net neutrality rules, members of the FCC and Congress should focus on ways to encourage broadband deployment and investment and encourage broadband adoption, Goldman said.

Goldman suggested that Congress, which returns from a mid-year recess next week, should examine whether net neutrality rules are needed, instead of the FCC moving forward on a proposal agency Chairman Julius Genachowski made last year. Dozens of lawmakers have also called on the FCC to back off in favor of congressional action.

The FCC should defer action while compromise talks between companies in the broadband and Internet industries, going on since mid-year, continue, he added.

NAM is also concerned with broadband deployment, said Marc-Anthony Signorino, director of technology policy at the trade group. "Right now, there are thousands of manufacturers in rural or underserved areas who are waiting for broadband services," he said. "The faster we get it to them, the faster we can create jobs."

Net neutrality rules could force rural manufacturers to wait even longer for broadband service, he said.

Small manufacturers "love" broadband service, he said. "Broadband grows small businesses into big businesses," Signorino added.

Congress should "lay down the law" with the FCC by setting limits on net neutrality rules, and it can also encourage the agency to focus on programs that promote broadband deployment, he said.

The proposed FCC net neutrality rules could open the door to further regulations, he said. "The concern from manufacturers is that under a highly regulated Internet ... government regulators could determine what products could be offered or what prices could be charged, as opposed to the free market," he said.

Genachowski and most other supporters of formal net neutrality rules have not expressed interest in letting the FCC set broadband prices or approve Internet-based products. Some net neutrality critics, however, have raised concerns that net neutrality rules could lead to a prohibition on tiered pricing options, and earlier this month, Genachowski asked for a new round of comments about whether net neutrality rules should apply to managed services and mobile broadband.

Several other groups have called for the FCC to move forward with net neutrality rules.

When Genachowski asked for more comments earlier this month, digital rights groups Free Press and Public Knowledge called on the FCC to move ahead with formal net neutrality rules. A U.S. appeals court ruled in April that the FCC did not have the authority to enforce informal net neutrality principles in a case involving Comcast throttling some peer-to-peer traffic.

"The FCC continues to kick the can down the road and prolong this process, but the longer the FCC ponders the politics of net neutrality, the longer consumers are left unprotected," Derek Turner, Free Press' research director, said earlier this month. "It is time for the FCC to stop writing notices and start making clear rules of the road. The phone and cable companies have shown us what the Internet will look like if they are allowed to write their own rules and build a two-tiered Internet with fast and slow lanes and zero protections on mobile broadband."