On December 21st, the Federal Communications Commission is set to vote on rules to protect network neutrality, the principle that broadband companies shouldn’t block or degrade rival web content, services or applications. The FCC said Wednesday that Chairman Julius Genachowski would address the topic in a live webcast starting at 10:30 a.m. ET during which he was expected to outline the agency’s approach.

President Obama included net neutrality in his campaign promises, but even before the Republicans took over the House in the November elections, there was fierce resistance from Republicans and members of Obama’s own party.

Genachowski appears to have the votes needed — at least three out of the five commissioners — to establish the new rules under so-called “Title 1? authority, a centrist approach that shies away from reclassifying broadband as a “Title II” communications service, a move fiercely opposed by the telecommunications industry. Still, any move to establish net neutrality rules will likely cause a political firestorm with Republicans and centrist Democrats in Congress.

On the eve of the decision, a bitter war of words erupted between cable giant Comcast and internet backbone provider Level 3 over broadband policy.

The spat was prompted by revelations that the nation’s largest cable company could interfere with Netflix, the upstart online movie service that competes with Comcast’s own video offering Xfinity. One of Level 3’s biggest clients is Netflix, whose customers account for an estimated 20 percent of net traffic during peak evening hours.

Comcast wants to charge Level 3 more for the increased bandwidth usage; Level 3 doesn’t want to pay. Comcast says it’s a business dispute; Level 3 calls it a matter of internet freedom.

The FCC said it is investigating.

The fight between the two corporate giants provoked an explosive reaction from net neutrality proponents and activist groups who marshaled their forces for a last ditch effort to sway the FCC. In less than 48 hours, over 80,000 people had signed an online petition urging the FCC to act to “stop this type of abuse — and protect Net Neutrality.”

Many advocates of net neutrality believe that the most effective way to ensure internet freedom — in the long term — is through new legislation from Congress. But with anti-regulatory Republicans taking over the House of Representatives there is virtually no chance of that happening for at least two years. So, advocates say, it’s up to Genachowski.

Republicans have been lashing out at possible FCC action for years. Rep. Marsha Blackburn, the outspoken Tennessee Republican who sits on the House Energy and Commerce Committee pledged Tuesday to overturn the rules.

“This is a hysterical reaction by the FCC to a hypothetical problem,” said Blackburn. Genachowski “has little if any congressional support for net neutrality.”

Since her election in 2002 to represent the “Volunteer State,” Rep. Blackburn has received $114,000 in campaign payments from AT&T, Verizon, and the National Cable and Telecommunications Association; her second, third, and fifth top career contributors, respectively, according to the Center for Responsive Politics.

Meanwhile, AT&T met with FCC Chief of Staff Edward Lazarus six times in the last month to make its views on the matter known.

In many ways, the net neutrality argument has mirrored a broader philosophical debate — all too familiar to Americans — about the role of government in the United States.

Huge corporations and their ideological allies have advocated a vision of free market capitalism unfettered by burdensome regulation that, they argue, threatens to hamper their businesses. Public interest groups and consumer advocates have argued that regulation is needed to protect people and the market itself from abuse by the nation’s highly profitable and politically connected cable and telecom companies.

The internet is different from other industries that have become flash-points for the debate over government regulation. There is no catastrophic oil-slick befouling the coastline and devastating local economies. There is no institutionalized system of mortgage fraud or predatory lending. There is no out-of-control speculation on toxic investments that nearly bankrupted the country.

In this case, a de facto state of net neutrality exists on the internet at present.

Most people take this idea for granted every day while using online services, devices, browsers and software. To the big cable and telecom giants like Comcast, AT&T, Verizon and Time Warner Cable, ignorance = money. So, they’ve compared new rules enforcing internet freedom to a “solution without a problem.”

But net neutrality rules are critically important to the health of the internet, advocates argue, because without them cable and telephone giants could block or slow down certain types of content, like bittorrent or YouTube, prevent or discriminate against against certain web services and applications like Netflix or Skype, or even censor free speech on websites they deem objectionable.

They could also try to create a private, ultrafast virtual highway designed for their own next-generation video products — think bandwidth-intensive applications like 3D-video to the home.

This cleaving of the internet could have grave and unintended consequences because it could decrease the incentive and the possibility for smart young entrepreneurs to create the next Google or Facebook or YouTube on the newly “public” internet, as Google CEO Eric Schmidt has taken to calling it.

In short, advocates argue, net neutrality is like a First Amendment for the 21st century: the broadband giants shall not infringe upon the freedom to access the open internet.

For their part, net neutrality opponents seem content simply to ask Americans to trust Comcast, AT&T and Verizon to respect internet openness and freedom, or to be forced to respond to customer outrage.

We’ll self-govern, the cable and telecom giants say.

Ask yourself: do you you trust these companies to look out for your rights?

One year ago, the FCC seemed well on its way to implementing basic net neutrality rules and even expanding them to cover wireless as well.

But last April, a federal court ruled that the agency lacked the authority to enforce the principles established in 2004 by then-FCC Chairman Michael Powell, a Bush-appointee. Those simple principles held that consumers had the right to use the devices, software and online services of their choice, and have competition between ISPs. Genachowski had hoped to expand on those, but now even those most basic rights appear to have no basis in law.

Powell’s successor, Bush-appointee Kevin Martin, used those principles in 2008 to sanction cable giant Comcast for blocking peer-to-peer traffic. But the court ruled that Comcast was correct: the Bush-era deregulation of broadband, had, in fact, eviscerated the FCC’s power to enforce the rules.

That leaves the FCC where it is now — largely powerless over internet policy and facing a political juggernaut from Republicans and their well-funded cable and telecom allies. See you in court.

(Updated 12:16 a.m. 12/1 to include FCC announcement.)

(Updated 9:18 a.m. 12/1 to include word of Genachowski webcast)

Photo: FCC head Julius Genachowski told John Heilemann on stage at Web 2.0 Summit 2010 in early November that net neutrality rules were coming. Credit: James Duncan Davidson

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Authors: Sam Gustin

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