US: Net-neutrality regulations unnecessary

• Tags:
• Consumers,
• Isps,
• Federal,
• Department

Declan McCullagh and David Meyer ZDNet.co.uk

Published: 07 Sep 2007 11:36 BST

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The Bush administration believes that government regulators should be "highly sceptical" of net-neutrality regulations and instead rely on competition to protect consumers.

The comments came in a public filing that the US Department of Justice sent on Thursday to the Federal Communications Commission (FCC), warning against the adoption of extensive net-neutrality rules.

The term "net neutrality" refers to the concept of ISPs being able to charge content providers for prioritisation of their traffic. The debate is more heated in the US than in the UK because there is less competition between ISPs in the US.

Some argue that net neutrality should be legislated to protect consumers and keep all internet traffic equal, while the other side tends to argue that the internet is already unequal and certain types of traffic (VoIP, for example) require prioritisation by default.

"However well-intentioned, regulatory restraints can inefficiently skew investment, delay innovation and diminish consumer welfare, and there is reason to believe that the kinds of broad marketplace restrictions proposed in the name of 'neutrality' would do just that with respect to the internet," the Department of Justice said in its statement.

These comments have several precedents. The Republican chairman of the Federal Trade Commission, Deborah Platt Majoras, was almost as sceptical last year, and a formal report from the entire Federal Trade Commission in June came up with the same conclusion that no new laws were needed.

Public Knowledge, a consumer-rights group and net-neutrality advocate, which supports giving the FCC more power to regulate broadband providers, criticised the Justice Department's filing. "Perhaps the [Justice Department] does not recall that there is very little in the way of market forces to protect consumers. Perhaps the department has forgotten that many consumers have little or no choice at all for their high-speed broadband services. A more vigorous antitrust analysis would have recognised there is a market failure and would have resulted in conditions on the AT&T takeover of BellSouth that would have benefited consumers and internet companies."

The US Department of Justice's stance is not dissimilar to the stated views of the UK's Department of Trade and Industry (now the Department for Business, Enterprise and Regulatory Reform) and Ofcom, the telecommunications regulator. In March, both parties said they were "relaxed" on the issue of net neutrality, preferring to rely on existing EU legislation to protect the rights of consumers. Ofcom's director of policy development, Dougal Scott, claimed at the time that there were "real advantages to consumers in treating certain types of applications differently to others".

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