Politics and Law

WASHINGTON--The wireless and TV broadcasting industries faced off for the first time at a congressional subcommittee meeting on the Hill on Tuesday, setting in motion what could be a long drawn out battle over whether wireless spectrum should be reallocated and where the government will get this new spectrum.

Steve Largent, president and CEO of CTIA, the wireless industry group, and Gordon Smith of the National Association of Broadcasters, were among the witnesses gathered before the House Energy and Commerce Committee's Subcommittee on Communications, Technology and the Internet to discuss what the CTIA and the Federal Communications Commission have called a looming spectrum crisis.

CTIA and FCC Chairman Julius Genachowski have said that finding new spectrum as well as new ways to use existing spectrum more efficiently are top priorities that need to be addressed to keep up with growing demand for new wireless broadband services.

"Spectrum is our industry's backbone and it is what allows us to continue to innovate and create new apps, products, and services," Largent said in a statement. "Without this additional spectrum, our industry will cease to provide U.S. consumers with the most innovative and most competitive wireless offerings in the world."

The hearing comes just weeks after the CTIA ruffled broadcasters' feathers when it filed comments with the FCC suggesting that some of the additional spectrum it seeks for wireless broadband could come from unused TV broadcast spectrum. Broadcasters oppose giving up their spectrum. And some representatives for broadcasters say they don't believe that there is a spectrum crisis.

"There is no shortage of wireless spectrum in this country," said John Hane, counsel in the communications practice group of Pillsbury Winthrop Shaw Pittman, which represents the TV broadcast industry. "There is a lot of spectrum already available that could be used more efficiently. That is why we need these bills to take an inventory of what is currently being used."

Indeed, NAB and CTIA both said they support the passage of the Radio Spectrum Inventory Act, which would require the FCC and the U.S. National Telecommunications and Information Administration (NTIA) to inventory the wireless spectrum available in the U.S. It would also require those organization issue a public report on the government and private uses of the spectrum.

Smith of NAB also said during his testimony that it's important for Congress to look at all spectrum holders to ensure they are using their spectrum efficiently rather than singling out the broadcast industry.

"NAB believes that any inventory of spectrum should be comprehensive," he said in his prepared testimony. "Let's look at all bands and all services, including federal government bands. And let's view how each service is using its existing spectrum."

The NAB also said it supports another bill in the House, called the Spectrum Relocation Improvement Act, which would streamline the process for federal agencies to turn over unused spectrum so it can be auctioned to bidders in the private sector.

It's clear that the CTIA and FCC are taking on a big fight with calls for spectrum reallocation. And Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in an interview Tuesday that he admires the FCC for taking on such a battle.

"We certainly think that there is looming spectrum crisis," he said. "And I give the FCC chairman a great deal of credit for being courageous enough to lay out the problem and to seek what is best for consumers."

But he added that he also believes that the government needs to look at all sources of spectrum in solving this problem.

"That's why we agree there should be a spectrum inventory done," he said.

But skeptics, such as Hane, believe that a full inventory will actually show that no spectrum crisis exists. He argues that Congress may realize once it evaluates the data that there is no real crisis and that the current allocation of spectrum is sufficient to handle future growth.

Specifically, he says that wireless operators could be doing more with Wi-Fi and femto cell technology, which boosts radio signals indoors and then uses a wired broadband connection to send calls and data across a carriers network. He thinks this could help solve some of the efficiency problems that exist today instead of forcing TV broadcasters or government agencies to give up their spectrum.

But the CTIA argues that Wi-Fi and Femto cells are not enough to solve the spectrum shortage. Largent said additional spectrum is necessary to keep the U.S. competitive in the wireless market. And carriers such as AT&T, which is currently facing capacity issues due to heavy use of data services on devices like the iPhone, agree that freeing up more spectrum could help alleviate the problems the company currently faces.

Using a report from the International Telecommunications Union, CTIA calculates that by 2015 the U.S. and other developed nations will need about 1300 MHz spectrum to keep up with growing wireless broadband demand. Largent said in his testimony that the U.S. is lagging other nations in making additional spectrum available. Today, the U.S. has a little less than 500 MHz of spectrum that is commercially available. The trade group is asking the FCC to identify 800 MHz of additional spectrum that can be reallocated for wireless broadband use.

Largent pointed out that countries much smaller than the U.S. have much more spectrum available to them. For example, Germany, which has about 107 million wireless subscribers, will soon have about 645 MHz of spectrum available commercially. And the United Kingdom, which has only about 77 million subscribers will soon have 707 MHz of spectrum available for commercial purposes.

Largent said it is important for Congress to begin the spectrum reallocation process now because it takes years to identify and auction off new spectrum. The past two major FCC spectrum auctions each took more than 10 years to complete from start to finish.

NAB's Smith cautioned congressional leaders to not act hastily in reallocating spectrum. Not only could it hurt free over the air TV, but he said it could stifle innovation in improving digital TV. The U.S. just spent several years and billions of dollars converting to digital TV service, which uses spectrum more efficiently and often provides better service to consumers.

"Our national priorities should recognize the value that free over-the-air broadcasting brings to every American," Smith said in his testimony. "Broadcasting and broadband are not 'either/or' propositions as some have suggested; that's a false choice."

The bills before Congress are just the first step in what is likely to be a long battle for the wireless industry, government agencies and TV broadcasters.

"This is the first round in a 128-round match up," Hane said. "This is just getting started. So it's premature for the CTIA to begin talking about reallocating spectrum when we don't even have a full inventory of the spectrum that's currently being used."

WASHINGTON, D.C.--The Federal Communications Commission got a slap on the wrist Thursday from federal auditors for not doing enough to protect wireless subscribers.

The Government Accountability Office issued a report Thursday that said the FCC needs to improve oversight of the wireless industry to protect consumers. The agency said the FCC needs to do a better job enforcing consumer protection rules and educating the public about how they can submit complaints when they have experienced problems with their carriers.

The report was requested by Rep. Edward Markey (D-Mass.) when he was chairman of the House Subcommittee on Telecommunications and the Internet.

The survey of more than 1,100 cell phone users found that the vast majority of wireless subscribers, 84 percent to be exact, are satisfied with their mobile phone service, which is good news for the industry. But for the millions of wireless consumers who are dissatisfied, the report determined that the FCC is not doing enough to help them resolve their problems or protect their interests.

One of the biggest issues uncovered in the report is the fact that carrier early termination fees are preventing dissatisfied consumers from switching carriers. The report found that among consumers who wanted to switch carriers but did not, about 42 percent said they didn't switch because of the early termination fees that carriers charge customers when they end their contracts early. These fees apply to consumers who sign up for carrier contracts and buy a subsidized device. The fees can cost anywhere between $150 and $350.

The industry argues that the fees are set so that carriers can cover the cost of subsidizing the phones. Congress and the FCC have questioned this practice and now all four major U.S. wireless carriers prorate their early termination fees.

The GAO report also found that the FCC is not providing enough oversight in how carriers resolve complaints. The FCC receives about 20,000 complaints from consumers per year, and it forwards these complaints to carriers. But the GAO said the agency does not provide enough oversight to make sure those issues are resolved.

"FCC also lacks goals and measures that clearly identify the intended outcomes of its complaint processing efforts," the report said. "Consequently, FCC cannot demonstrate the effectiveness of its efforts to process complaints."

Other issues cited in the report include billing problems. According to the report, about 34 percent of mobile-phone customers received unexpected charges on their bills. And roughly 31 percent had difficulty understanding their bill.

CTIA, the trade group that represents the mobile phone industry, pointed to the positive aspects of the report that found that 84 percent of customers were satisfied with their service.

"In this fiercely competitive industry, our members work very hard for each customer to provide them with the best products and services," Steve Largent, CTIA's president and CEO, said in a statement.

The GAO report suggests the FCC develop goals for handling consumer complaints. And it recommends that the agency analyze the complaints to identify trends and to see if carriers are actually complying with existing rules. The report also suggests the FCC come up with better ways to communicate with state officials to address some of these problems.

"The FCC can--and must--do more to make sure consumer concerns are resolved by wireless carriers and oversee the wireless industry with a greater focus on consumer protection," Senate Commerce Committee Chairman John Jay Rockefeller (D-W. Va.), said in a statement. "It is time for the agency to take real action to better protect wireless consumers."

At the telecommunications and policy summit here on Thursday, Ruth Milkman, chief of the wireless telecommunications bureau at the FCC, said the agency is already addressing some of these issues. Last week it opened an inquiry into Verizon's recent early termination fee hike. Verizon Wireless raised the fee for terminating a contract for a smartphone to $350 from $175.

In a formal response to the GAO report, the FCC said it has already launched three proceedings examining mobile-phone practices. And the FCC also noted that it's developing a new system for tracking complaints.

Spanish officials said earlier this week that the government will require service providers to offer broadband with speeds of at least 1 Mbps at regulated rates to residents living anywhere in the country.

A frenzy over a new Sony Ericsson smartphone at the GSMA Mobile World Congress in Barcelona last February.

(Credit: Marguerite Reardon/CNET )

The Spanish telecommunications minister issued a statement Tuesday declaring that broadband would be added to the country's so-called "universal service," which guarantees reasonably priced telephone service to citizens, Reuters reported. The goal is to offer affordable broadband with speeds of at least 1 Mbps to residents by 2011.

To achieve this goal the Spanish government will require any service provider that gets universal service funds to also include broadband services to any home as part of its service.

Last month, Finland's minister of communications announced a similar plan. By July 1, 2010, every person in Finland will have the right to a 1 Mbps connection.

While the 1Mbps speeds don't sound like much, Spanish and Finnish officials say it's just the beginning. They hope this speed will serve as a starting point. And they believe that network operators will increase speeds over time.

Finland has already established aggressive public policies in place to encourage more ubiquitous and faster broadband deployments. In 2008, the Finnish government said it would pay a third of the cost to wire the country with fiber by 2015.

These mandates come at a time when the U.S. Federal Communications Commission is drafting a national broadband policy that outlines a plan for policies to help provide universal broadband to every American. The plan will be presented to Congress in February 2010.

In a report this week to the FCC, the task force working on the national broadband policy highlighted several barriers to universal broadband, including problems with the U.S. Universal Service Fund. But taking action to change the system is difficult.

The U.S. Universal Service Fund subsidizes the cost of building telephone infrastructure throughout the country in places where it is too expensive to deploy such services. Much of the money from this fund, which is collected from consumers as part of their monthly phone bills, is still being used to subsidize regular telephony service. Many policy makers and government officials say the program needs to be revised to include broadband. And the funding mechanism also needs to be revised.

While many consumer advocates believe the U.S. government should take a more active role in directing policy in way similar to what is happening in Finland and Spain, it's important to note that the U.S. is a much larger country by population and geography than either of these countries. To put it in context, Finland has about 5.3 million residents, compared to more than 300 million people who live in the U.S.

Developing and funding universal broadband access in the U.S. will cost anywhere between $20 billion and $350 billion, according to government estimates. That said, establishing a clear policy road map could help pave the way to truly affordable high speed Internet access everywhere in the U.S.

The Federal Communications Commission met Wednesday to discuss obstacles to enacting a national broadband policy that will provide high-speed Internet access to every American.

President Obama has made universal broadband access a key goal. Grants and loans for helping make universal broadband access a reality have already started being doled out as part of Congress' economic stimulus package.

In an effort to ensure that new programs and policies work toward achieving the same goal, the FCC has been tasked with developing a national broadband plan to help direct policy makers in getting affordable broadband to every American. A task force, headed by Blair Levin, who had been chief of staff for former FCC chairman Reed Hundt, is developing the plan that will be presented to Congress on February 17, 2010.

Levin and his staff appeared before the FCC Wednesday to present what they see as gaps or obstacles that must be overcome to develop clear recommendations and policy for universal broadband.

Levin said that commissioners and policy makers must consider the broadband ecosystem if they hope to achieve the president's goals. This means taking into account not only consumer needs but also considering the needs of the industry, which will likely fund the bulk of the $20 billion to $350 billion that will be needed to build new infrastructure and develop new programs for spreading broadband throughout the country.

In considering these needs, Levin said it is important to identify and come up with ways to overcome some hurdles that stand in the way for achieving the ultimate goal of providing broadband to every American.

Obstacles to universal broadband access
One major issue has to do with the Universal Service Fund, a program funded through extra charges on consumers' phone bills. The USF was originally designed to provide subsidies to pay for phone service in rural communities. But the task force believes that more of the $7 billion that is allocated each year from the fund should also be used to help subsidize the cost of deploying broadband in rural areas.

Today, most of these funds are used for voice services and not broadband, the task force reported. And of the money that is used to subsidize broadband, the group noted it is often used inefficiently so that gaps in broadband deployment are still not filled.

The task force also reported that there is still a high level of disparity in income levels between people who subscribe to broadband service and those who do not. Nearly 90 percent of families with incomes of $100,000 or more subscribe to broadband services, compared to 35 percent with incomes of $20,000 or less. Rural households are less likely to subscribe to broadband service than urban households. About 65 percent of white households subscribe to broadband, while only 40 percent of Hispanic households subscribe to broadband and 46 percent of African-American households have broadband.

Another issue that was brought up by the task force during the meeting is the fact that broadband service providers tend to favor higher-income regions in more populated areas over low-income areas.

The data suggests that many low-income people in these parts of the country are offered only one broadband service option. The data also suggests that these consumers who have only one option tend to pay higher prices for service.

What this means is that lower-income people, who have less disposable income, are often the ones forced to pay higher prices, while people who have more money pay lower prices for service.

Deployments in rural areas are often affected by the high cost of building infrastructure and providing service. The task force noted that "middle mile" costs are almost three times higher than general network operations costs. This high cost is often a serious barrier to rural broadband deployments, the group said.

Blair Levin, head of the task force developing a national broadband policy for the FCC.

This "middle mile" infrastructure consists of equipment and fiber that connects local cable head-ends or telephone company central offices with bigger points of presence that connect those networks to nationwide networks. The task force said there was a lack of efficient coordination when carriers or other utility providers dig trenches for fiber infrastructure. The group also noted that these deployment gaps don't only affect rural consumers, but many residential neighborhoods and small business marketplaces as well.

As the Internet and television markets converge, the task force also noted that a lack of innovation exists in the TV set-top box market. Specifically, the majority of consumers today use set-top boxes provided through their subscription TV providers. And only a very small number of devices are even available to purchase at retail. By comparison, there are hundreds of devices available in the mobile phone market. Due to a lack of competition, innovation has been stifled. And the task force recommends the FCC adopt policies to encourage a retail market for such devices.

That said, the FCC has tried to encourage the consumer electronics industry to develop set-top boxes that could be bought separately from cable services, but so far the efforts have largely failed.

More spectrum needed
On the wireless side, the key barrier is a lack of spectrum, the task force said. The problem is simple, as demand for mobile broadband increases, there is a need for more spectrum to support these services. Demand for these services comes from the rapidly growing market for smartphone wireless devices and Netbooks. By 2011, smartphone sales are expected to overtake standard mobile phones.

The task force said it is critical for the FCC to identify and reallocate available spectrum as soon as possible. The group said the nation could face a spectrum shortage as soon as 2013 or 2015, if nothing is done today.

The wireless trade group CTIA and the Consumer Electronics Association support this claim. And the groups sent a letter to FCC chairman Julius Genachowski on Tuesday urging him to investigate using broadcast TV spectrum for mobile Internet use.

The measure is opposed by the broadcast TV industry. But the FCC task force noted that as the need for wireless broadband spectrum increases, the need for broadcast TV spectrum is actually decreasing. Specifically, smartphone subscriptions have increased by 690 percent since 1998, while over-the-air TV viewership decreased by 56 percent. This proposal is already generating criticism from lawmakers supporting the TV broadcast industry.

Levin and his staff acknowledged there are many other barriers that exist in providing affordable broadband access to every person in the U.S. Levin said his staff is on track to meet its February deadline, but he said the process will remain open throughout the remaining 90 days that are left to incorporate new ideas. He also emphasized the fact that the ultimate success or failure of the national broadband plan will be in the hands of Congress and policy makers who must remain committed to implementing the plan.

"In my experience and seeing what has worked in other countries, you can plan all you want, but there really needs to be a long-term commitment for such plans to succeed," he said.

Also as part of the meeting, the five-member FCC unanimously voted to impose a "shot clock" for wireless tower applications to speed up the time it takes for wireless operators to deploy new cell phone networks.

Chairman Genachowski promised last month at the CTIA tradeshow in San Diego that the Commission would do what it could to speed up this process. And the Commission's vote solidified that promise.

"Tower siting is a vital piece of our industry," CTIA president and CEO Steve Largent said in a statement. "It enables mobile services, including voice and broadband, for consumers, public safety, and businesses. Both Congress and the Supreme Court recognized the importance of taking concrete steps to ensure that the zoning process does not become a barrier to the reasonable deployment of, and competition among, diverse wireless networks."

Acting FCC Chairman Michael Copps released a report on broadband strategy for rural America on Wednesday.

The report was mandated as part of the 2008 Farm Bill. In that bill Congress asked the Federal Communications Commission to work with the U.S. Department of Agriculture to submit "a report describing a comprehensive rural broadband strategy."

The emphasis on forming a rural broadband strategy came several months before President Obama took office. Obama also sees broadband as a priority and included funding for broadband development as part of the stimulus package passed by Congress earlier this year.

In the American Recovery and Reinvestment Act of 2009, Congress appropriated $7.2 billion for broadband grants, loans, and loan guarantees to be administered by the USDA's Rural Utilities Service (RUS) and the Department of Commerce's National Telecommunications and Information Administration (NTIA). As part of this bill, the FCC is also required to file a report with Congress in February 2010 describing a national broadband policy.

Copps called this report on rural broadband strategy a starting point for developing a national broadband policy. And even with the $7.2 billion of money from the stimulus package, Copps said that more money will be needed to ensure that every American has access to broadband.

Copps identified several issues in this report that must be overcome to get broadband deployed in rural areas. These issues include technological challenges, lack of data about where broadband is available and who is accessing it, and high network costs. Despite these challenges, Copps said that the U.S. government must pour resources into solving these problems just as it did when building the U.S. Postal Service, the railroads, the nationwide electrical grid, the interstate highway system, and even the Internet backbone.

"From the country's earliest days, building the nation's infrastructure has required federal resources and leadership, and this federal role continues," he said in the report. "At their inceptions, some of these projects were controversial. Many considered them too expensive; others doubted their efficacy. Today, few would question their value, but each of these undertakings depended on a strong and coordinated national vision."

Faced with a whopping $1.7 trillion deficit, President Obama is proposing tacking on a spectrum license fee to wireless operators to help generate revenue for the government.

The Obama administration's proposal was loosely outlined in the new budget plan for 2009 and 2010 submitted Thursday. In that plan, the administration proposes adding a new fee to be paid by wireless carriers that license wireless spectrum from the government.

These annual fees would start at $50 million in 2009 and jump to $200 million in 2010, Reuters reported. The fees will gradually increase over the next 10 years to $550 million per user per year, generating an estimated total of $4.8 billion over the next decade.

The proposed fees are in addition to license fees that operators have already paid the federal government as part of its wireless auctions. The Federal Communications Commission has been auctioning off wireless spectrum to phone companies and other entities since the 1990s. These auctions grant license holders exclusive rights to the spectrum in exchange for cash.

Over the years, these auctions have generated billions of dollars for the federal government. The most recent auction, which ended in March 2008, was for the 700 MHz block of spectrum that is being vacated by television broadcasters after the mandated digital TV transition. This valuable spectrum generated a record $19.6 billion.

But wireless spectrum is a limited resource. And the government is running out of airwaves to auction. In fact, the Obama administration predicts that it will only be able to generate about $4.8 billion in revenue from wireless auctions over the next 10 years.

Even though the additional fees could help the government halve the deficit by 2013 as well as help it fund several new spending initiatives, it's likely to be met with a great deal of resistance from mobile operators.

So far, none of the big four wireless carriers in the U.S.--AT&T, Sprint Nextel, T-Mobile USA and Verizon Wireless--has been willing to comment on the proposal. And the CTIA wireless-industry association said it's still looking into the matter.

"We are currently reviewing the details of the proposal and look forward to participating in the next stages of this issue," CTIA said in a statement.

Previous spectrum fee proposals have been strongly opposed by the wireless industry, and there's little reason to suggest that the industry would support them now. The big difference this time around is that a Democrat-controlled Congress could be more willing to support President Obama's plans.

More details about the proposal are expected later this spring when the administration releases a more detailed budget package. But any changes to the fee structure would require legislation. And my guess is that the wireless industry would fight hard against it.

Comcast is appealing a ruling by the Federal Communications Commission that found the broadband provider had illegally blocked some customers' Web traffic.

The appeal, filed Thursday in the U.S. District Court of Appeals in Washington, challenges the FCC's ruling on August 1 that Comcast's throttling of BitTorrent traffic last year was unlawful--the first time any U.S. broadband provider has ever been found to violate Net neutrality rules. The FCC issued a cease-and-desist order and required the company to disclose to subscribers in the future how it plans to manage traffic.

"We filed this appeal in order to protect our legal rights and to challenge the basis on which the (FCC) found that Comcast violated federal policy in the absence of pre-existing legally enforceable standards or rules," Comcast executive vice president David L. Cohen said in a statement.

FCC Chairman Kevin Martin said he was "disappointed by Comcast's decision to appeal."

Comcast, the largest cable provider in the U.S., has been under fire for months after it was discovered the company had been slowing down peer-to-peer traffic on its network. Comcast had said that its measures to slow BitTorrent transfers, which it voluntarily ended in March, were necessary to prevent its network from being overrun. At a public hearing in February, Comcast Executive Vice President David Cohen said, "Comcast may on a limited basis temporarily delay certain P2P traffic when that traffic has or is projected to have an adverse effect on other customers' use of the service."

Consumer groups were incensed by the tactic, and the FCC investigation ensued over whether Comcast had violated any of its Net neutrality principles.

Since that ruling, Comcast announced plans to reduce Internet service to customers it deems to be using too much bandwidth. To keep service flowing to other customers, Comcast plans to impede Internet speeds to its heaviest users for up to 20 minutes, Mitch Bowling, Comcast's senior vice president and general manager of online services, told Bloomberg in an interview.

The company also announced it would set a data cap of 250GBs per month for its residential customers beginning on October 1.

Federal regulators voted 3-2 on Friday to declare that Comcast's throttling of BitTorrent traffic last year was unlawful, marking the first time that any U.S. broadband provider has ever been found to violate Net neutrality rules.

The Federal Communications Commission handed Comcast a cease-and-desist order and required the company to disclose to subscribers in the future how it plans to manage traffic. Comcast had said that its measures to slow BitTorrent transfers, which it voluntarily ended in March, were necessary to prevent its network from being overrun.

"We need to protect consumers' access, said FCC Chairman Kevin Martin, a Republican. "While Comcast has said it would stop the arbitrary blocking, consumers deserve to know that the commitment is backed up by legal enforcement."

The vote was not unexpected. Martin said recently that he planned to side with the commission's two Democrats on the request submitted in November by Free Press and its political allies, including some Yale, Harvard, and Stanford University law school faculty. That led to a backlash against Martin this week from economic conservatives, including the Bush administration and House Republican Leader John Boehner.

It also is likely to be challenged in court. In 2006, Congress rejected five different bills that would have handed the FCC the power to police Net neutrality violations; the FCC has acknowledged that its own Net neutrality principles "are not enforceable"; the Supreme Court has previously ruled that the FCC has no power to regulate "unless and until Congress confers power upon it."

Comcast said in a statement on Friday that it believes "the commission's order raises significant due process concerns and a variety of substantive legal questions. We are considering all our legal options and are disappointed that the commission rejected our attempts to settle this issue without further delays."

Details of the FCC's ruling, which may not be available for a few weeks, remain unclear. While Comcast will face no fine, Martin said the FCC has adopted a new legal "framework" that will let federal bureaucrats deem whether future network management practices are permissible. The dissenting Republicans said they did not receive the final text of the order until late last night--it apparently includes a variant of a "strict scrutiny" test usually reserved to judge whether government policies are legal or not--and it is not yet public.

Commissioner calls ruling unlawful
In an unusually pointed dissent, Commissioner Robert McDowell, a Republican, said the FCC's ruling was unlawful and the lack of legal authority "is sure to doom this order on appeal." McDowell said the order would invite far more extensive FCC regulation of the Internet, with the rules varying by which political party controls the White House: "The ground rules will change based on election results."

The is the FCC's "journey into the realm of the unknowable," McDowell said, saying that the outcome "may result in slower online speeds" for most Americans. Deborah Taylor Tate joined him in a dissent; Democrats Michael Copps and Jonathan Adelstein joined Martin.

A summary of the order released by the FCC on Friday says:

The Commission announced its intention to exercise its authority to oversee federal Internet policy in adjudicating this and other disputes regarding discriminatory network management practices with dispatch, and its commitment in retaining jurisdiction over this matter to ensure compliance with a proscribed plan to bring Comcast's discriminatory conduct to an end.

Under the plan, within 30 days of release of the Order Comcast must:
* Disclose the details of its discriminatory network management practices to the Commission
* Submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year
* Disclose to customers and the Commission the network management practices that will replace current practices

To the extent that Comcast fails to comply with the steps set forth in the Order, interim injunctive relief automatically will take effect requiring Comcast to suspend its discriminatory network management practices and the matter will be set for hearing.

Free Press hailed the vote as a "landmark" decision. "Comcast's history of deception and continued blocking show contempt for the online consumer protections established by the FCC," said Josh Silver, executive director of Free Press, in a statement. "We commend Chairman Martin and Commissioners Copps and Adelstein for standing up for Internet users and working across party lines to protect free speech and the free market."

Not helping Comcast's credibility was its denial in August 2007 of early allegations that it was filtering BitTorrent traffic. A few months later, though, it turned out that Comcast really was throttling BitTorrent after all, and the company was forced to concede to the FCC that it blocks only "excessive" traffic. That also handed competitors like AT&T a perfect opening to say that they don't throttle peer-to-peer traffic at all.

Kevin Martin, the Republican chairman of the Federal Communications Commission, is drawing fire from economic conservatives over his plan to declare that Comcast violated the law when throttling BitTorrent last year.

The vote is expected at a FCC meeting (PDF) on Friday morning. It promises to be a landmark one: this would be the first time the commission has ruled on a Net neutrality violation. (An earlier one was settled without a formal ruling.)

Martin's intra-party backlash started on Wednesday with an editorial in the Wall Street Journal that started with this uncomplimentary paragraph: "Bad personnel decisions have haunted the Bush Administration, and one of the bigger disappointments is Federal Communications Commission Chairman Kevin Martin. In his last months as Master of the Media Universe, he seems poised to expand government regulation of the Internet."

The Journal also reported in a news article on Friday that the Bush administration itself is irritated. "We're concerned about the decision," Meredith Attwell Baker, acting head of the Commerce Department's National Telecommunications & Information Administration, told the paper. "It appears to reverse a decade-old bipartisan policy against regulation of the Internet."

There's also House Republican Leader John Boehner, an Ohio Republican, who sent a letter (PDF) to Martin on Thursday warning him of going through with his plan to rule against Comcast, with the help of the five-member FCC's two Democrats. The text of the letter:

Dear Chairman Martin,

I am dismayed by recent press reports that you intend to interfere with the network management decisions of broadband providers, essentially regulating the Internet. As one of your Republican colleagues at the FCC, Commissioner McDowell, so aptly explained in his July 28 Washington Post editorial, "[t]he Internet has flourished because it has operated under the principle that engineers, not politicians or bureaucrats, should solve engineering problems." Congress has intentionally refrained from imposing the heavy hand of government, which is precisely why we have seen such rapid growth in the Internet. As the Wall Street Journal editorial board pointed out July 30, "the FCC's job is not to determine business models in the private sector. The community of Internet service and content providers has proven itself more than able to work out problems on its own as Web use has exploded."

As press reports indicate, the current case is no different. Difficulties in quickly transferring large files led to the development of cutting edge peer-to-peer technology. When a small minority of subscribers--often using these applications to share pirated music and movies--began clogging the networks to the harm of the large majority of users, broadband providers began taking steps to alleviate the congestion. This, in turn, has prompted peer-to-peer developers to collaborate with broadband providers to find better ways to manage traffic. It is this market-based, self-governing nature of the Internet that is the key to its success. Your heavy handed attempts to inject the FCC into the middle of that process threaten to hijack the evolution of the Internet to everyone's detriment. It will also deter the very broadband investment we need for the Internet to continue growing to meet the increasing demands being placed upon it.

Adding insult to injury, it appears you are wading into this debate on very shaky procedural and legal grounds. While the FCC has endorsed certain Internet policy principles, it has never adopted regulations through a proper notice and comment rulemaking. Nor should it, for the reasons I outline above. Nonetheless, your continued pursuit of this matter suggests that you are making not only a poor policy judgment, but a poor legal one, as well. I urge you return to a sound market-oriented approach, rather than continue down the path you have chosen. It will surely stifle one of the greatest technological and economic success stories our Nation has seen.

Adam Thierer, a policy analyst at the free market Progress and Freedom Foundation (which began its days as Newt Gingrich's favorite think tank), wrote this week that liberal activists "will incessantly petition the FCC to review each and every business model decision and encourage the unelected bureaucrats at the agency to manage the Internet to their heart's content."

It's possible that this last-minute criticism will change Martin's mind, or he may be spooked at the prospect of damaging his future political viability (at least inside the Republican Party). We'll know for sure in a few hours.