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Microsoft, Google Back Strong Net Neutrality; AT&T and Verizon, Not so Much

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Credit: Bloomberg News
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Microsoft and Google pleaded with U.S. regulators on Monday to preserve strong net neutrality rules, while AT&T and Verizon Communications backed weakened oversight and said Congress should settle the issue that's burned for more than a decade.

The tech pillars and the broadband providers are trying to sway the Federal Communications Commission, which is moving toward gutting rules against interfering with web traffic. Monday was a deadline for comments on the FCC proposal advanced by Republican Chairman Ajit Pai entitled "Restoring Internet Freedom," which already has attracted more than 8 million comments.

The rules passed by an Obama-era, Democratic-led FCC bar broadband providers from blocking or slowing data -- to hinder rivals, for instance, or to favor affiliated services -- and from setting up "fast lanes" that would cost more. Under Pai's proposal announced in April, the FCC would end its claim to strong legal authority to enforce the rules, and the chairman asked whether the FCC should retain the ban on paid fast lanes.

For broadband providers, the change would remove a threat of intrusive rate regulation as FCC authority is cut back. If Congress passed a law, it would be less prone to repeated reversals than FCC rules as partisan control of the commission switches following elections.

Web-based companies see peril in relaxing rules that they say protect consumers' ability "to enjoy the unfettered ability to access the lawful content of their choice," the Internet Association, a Washington-based trade group with members including Microsoft, Alphabet Inc.'s Google, Netflix and Amazon said in a filing Monday. Undoing the rules "would introduce significant uncertainty and would threaten the virtuous circle of innovation" that's seen broadband services boom.

Internet service providers see the issue differently, and argue that the embattled rules have deterred broadband investment.

Rules should return to the lighter-touch framework that existed before the current rules were set in 2015 "in order for the U.S. to retain its leading role in shaping and benefiting from the internet," USTelecom, a trade group with members including AT&T and Verizon Communications, said in a summary of its comments Monday to the FCC. "A lasting congressional solution is needed, but, in the interim, the commission must undo the harm."

The current FCC rules include "the framework for price regulation -- a toxic approach if the goal is to encourage investment," Verizon said in its filing. Reverting to a "longstanding, light-touch" approach "will not leave consumers unprotected."

At top cable provider Comcast Corp., "we support permanent, strong, legally enforceable net neutrality rules," David Cohen, senior exec VP, said in a blog post July 12. "You can have strong and enforceable open internet protections without relying on rigid, innovation-killing utility regulation."

Cohen called for Congress to act.

Prospects appear "dim" for a solution from Congress, Matthew Schettenhelm, a Bloomberg Intelligence analyst, said in a July 13 note. Republicans likely will seek limits on FCC power, which Democrats will resist in order to preserve the agency's flexibility to address future problems, Schettenhelm said.

-- Bloomberg News

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