Statement of Third Way Vice President for Policy Jim Kessler on FCC Chairman Julius Genachowski's Proposed Open Internet Order

December 17, 2010

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“Third Way is pleased to support Chairman Genachowski’s proposal, which we believe embodies a thoughtful and balanced approach that will allow the Internet to continue to evolve in a manner that preserves its foundational principles, protects consumer choice, and promotes U.S. economic growth.

“Today, federal policy regarding the openness of the Internet is at a crossroads.

“On the one hand, the open, democratic nature of the Internet has been the key to its development and success. By allowing entrepreneurs and innovators of all sizes—from Fortune 500 companies to small start-ups working out of a garage—to connect and compete, the Internet has formed a true global market for products and ideas. Through the advent of social media and mobile devices, it has also given individuals the power to communicate as never before, broadened participation in civic life, and enriched our society. If the Internet is to remain a vibrant entity that supports creativity on a level playing field, future regulatory action must respect its existence as a digital commons.

“On the other hand, because broadband networks face constraints on their capacity, network management is an inescapable reality. As demand for bandwidth consuming services like streaming video and peer-to-peer file sharing increases, broadband operators need the latitude to manage their networks in a way that maximizes performance while protecting the transfer of lawful Internet traffic. In the absence of network management, such services and high volume users would strain the capacity of the network and threaten to crowd out users engaged in lower-intensity activities such as browsing or e-mail.

“In order to accommodate more users and prevent service degradation, the capacity of the physical infrastructure that supports the Internet must be augmented over time. Providers have already made significant strides in this area, with cable providers having invested over $130 billion since 1996 to greatly increase broadband access. Since further broadband deployment will require extensive capital outlays, establishing public policies to encourage investment is crucial. To achieve this goal, any regulatory action must preserve incentives for network operators to innovate and continue their investment in broadband infrastructure development.

“In our view, the Chairman’s proposal remains faithful to the democratic nature of the Internet by requiring network operations to be transparent, ensuring access to lawful content, and protecting the level playing field that forms the foundation of the Internet’s open market. At the same time, it recognizes the realities of the broadband marketplace by eschewing Title II reclassification and allowing for network management practices and reasonable usage-based pricing to meet the needs of consumers. The proposed order also wisely takes a restrained approach toward regulating the still rapidly-evolving wireless market. In doing so, we believe that the proposal strikes an appropriate balance between philosophical and technical concerns, and represents a measured, pragmatic path forward that guards against discriminatory or anti-competitive practices.

“The Federal Communications Commission was tasked with developing a reasonable compromise that addresses concerns about the open nature of the Internet and the stability of the business environment for broadband providers. We feel that the Chairman’s proposal meets that difficult challenge. Not surprisingly, this solution neither completely satisfies nor completely angers most large and small users, companies, and entrepreneurs.

“We applaud Chairman Genachowski’s decision to move ahead with consideration of the proposal, which we believe strikes a reasonable, middle-ground compromise. We hope the proposal is met with favorable consideration when brought before the full Commission, and we look forward to a final order that reflects the thoughtful consensus framework advanced by House Energy and Commerce Committee Chairman Waxman. By adopting such a proposal, the Federal Communications Commission would provide certainty to the marketplace, support continued innovation and deployment of broadband networks, and encourage further progress toward reaching the Internet’s full economic and social potential.”

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