|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
LAS VEGAS--The Obama administration and its allies at the Federal Communications Commission are retreating from a militant version of Net neutrality regulations first outlined by FCC Chairman Julius Genachowski in September.
That's my reading of a number of recent developments, underscored by comments made by government speakers on a panel on the first day of a Tech Policy Summit at CES in Las Vegas.
Genachowski had initially described his vision for the future role of the FCC as a "smart cop on the beat preserving a free and open Internet." Communications companies understood that to mean aggressive and detailed enforcement of rules that would, among other things, prohibit ISPs from offering premium, or "fast lane," services.
Last fall, Genachowski proposed six Net neutrality rules and asked the full commission to approve them. The proposed rules could be adopted as early as spring.
But even as the commission concludes its collection of public comments next week, both the White House and the FCC appear to be dialing back their expectations.
The administration is clearly backtracking. But why?
Part of the reason is some unexpected political pressure, including a letter signed by 72 congressional Democrats opposing the FCC's proposed rules soon after they were announced.
But the bigger explanation is the growing priority within the administration for nationwide, affordable broadband service. In the course of preparing the national broadband plan, mandated by the 2009 stimulus bill, universal high-speed access has taken on increased significance in the government's hopes for a rapid economic recovery. Beyond the current financial woes, Congress, the FCC and the White House all recognize the importance of improving the communications infrastructure to maintain U.S. competitiveness in technology innovation.
As Fried pointed out, however, nationwide broadband coverage would require an additional investment of $350 billion, much of it for fiber optic cabling. While the FCC was developing its plan and spending "too much time on Net neutrality," he said, the communications industry had already invested $60 billion toward that effort. By contrast, the stimulus bill allocated only $7 billion for broadband projects. Clearly, Fried noted, satisfying the goals of the national broadband plan will require significant private investment.
The major carriers are making the investments, and have every business reason to make more. But the Net neutrality rules, depending on how the FCC defines key terms, could hamstring their efforts to make their money back. Net neutrality is making Wall Street uncomfortable about financing broadband deployment. That in turn is making the White House nervous.