Industry Minds Appear To Be Meeting Over Net Neutrality

Parties face Sept. 2 deadline for FCC meeting agenda

By John Eggerton -- Broadcasting & Cable, 8/31/2010 10:35:21 AM

Progress continues to be made in talks about compromise legislative language clarifying the FCC's ability to oversee Internet access. That is according to sources familiar with the talks, who added that it remained a work in progress.

Analyst Stifel Nicolaus, in a note to investors obtained by B&C, described it as a general agreement that included concessions on wireless network neutrality by operators, commitments to a robust "public Internet," and an "expanded" FCC role.

After FCC-brokered talks broke off in the wake of a separate accord between Google and Verizon on a net neutrality policy framework, industry talks continued.

The FCC-hosted talks ended after news that Google and Verizon had come to a meeting of the minds on basic network neutrality principles that included prioritizing traffic through managed services that do not travel over the public Internet and agreeing not to apply most of those principles to wireless broadband.

The Information Technology Industry Council, whose members include Microsoft, Dell and Cisco, is now hosting the talks, which include AT&T, Verizon, Skype and the National Cable & Telecommunications Association.

Thursday is the FCC deadline for signaling what FCC Chairman Julius Genachowski plans to put on the agenda for the Sept. 23 meeting and circulating a draft of a Title II reclassification to the other commissioners if that will be on there.

If industry parties are sufficiently close to a deal, it would make sense for them to wrap it up before Thursday to give the chairman more options.

Stifel Nicolaus analyst Rebecca Arbogast said in the note, which was first reported by The Hill, that she sees four potential options for the FCC. The chairman could 1) float the draft but potentially withdraw it before the meeting depending on the reaction; 2) cite progress in the industry talks and delay the order until after the elections; 3) seek public comment on an industry agreement (if there is one); or 4) impose network neutrality rules tied to Title I authority.

But she also sees the downsides to a legislative route being the uncertainty of support from Congress if the Republicans make big gains, and the expected pushback on an industry agreement from public interest groups.

"Bottom line," she said, "we see the situation as unstable, with a Title II order as increasingly unattractive, but the other exit strategies as remaining problematic."