FCC warned of net regulation

Justice Dept. denounces Net neutrality

By WILLIAM TRIPLETT

The Federal Communications Commission should be "highly skeptical" of imposing any kind of regulatory mechanisms to ensure so-called Net neutrality, the Justice Dept. has advised.

In comments filed Thursday with the FCC, which has been seeking opinion on whether it should regulate Net neutrality, Justice cautioned that regulation could impede investment needed to further develop the Internet.

Net neutrality is a principle applied to broadband networks guaranteeing freedom of restriction on the kinds of equipment attached and the modes of communication allowed.

"The FCC should be highly skeptical of calls to substitute special economic regulation of the Internet for free and open competition enforced by the antitrust laws," the Justice Dept. said. "Marketplace restrictions proposed by some proponents of Net neutrality could in fact prevent, rather than promote, optimal investment and innovation in the Internet, with significant negative effects for the economy and consumers."

Pro-Net neutrality groups, such as the Open Internet Coalition, have argued that without regulation, broadband providers will be able to discriminate against Web sites and users, charging different rates for different speeds and content capacities.

The Justice Dept. rejected those arguments: "However well intentioned, regulatory restraints can inefficiently skew investment, delay innovation and diminish consumer welfare."

The sorts of things that Net neutrality proponents want to prohibit -- ISPs offering premium services and different levels of quality of services -- may instead be good for competition, Justice said.

In a statement, the Open Internet Coalition said that the Justice Dept. comments "demonstrate a failure to recognize that under the DOJ's own guidelines, there is not a competitive broadband-access marketplace. The department's assertion contradicts the FCC's most recent study of market concentration of broadband markets, which found that a typical residential broadband market is three times more concentrated than what the Dept. of Justice itself defines as 'highly concentrated.'"

The Justice Dept.'s position is "consistent with the Bush administration's failed approach to national broadband policy," said Rep. Edward J. Markey (D-Mass.), chairman of the House Telecommunications Subcommittee and a Net neutrality supporter. "American consumers and entrepreneurs deserve better."