US Adopts Rules for Internet Traffic Managed by AT&T, Comcast - Bloomberg

Julius Genachowski, chairman of the U.S. Federal Communications Commission (FCC). Photographer: Tony Avelar/Bloomberg

Dec. 21 (Bloomberg) -- Tim Horan, an analyst at Oppenheimer & Co., talks about rules for Internet-service providers being considered by the Federal Communications Commission. The net-neutrality rules proposed by FCC Chairman Julius Genachowski, a Democrat, would forbid Internet service providers from interfering with subscribers' Web traffic. Horan, speaking with Betty Liu on Bloomberg Television's "In the Loop," also discusses AT&T Inc.'s $1.93 billion purchase of wireless spectrum from Qualcomm Inc. (Source: Bloomberg)

U.S. regulators banned Internet service providers led by AT&T Inc. and Comcast Corp. from blocking or slowing Web content sent to homes and businesses, while allowing mobile phone companies to put limits on traffic.

The Federal Communications Commission approved the so- called net-neutrality rules by a vote of three to two today. Supporters argued that Internet providers, which also own some of the content they deliver online, might interfere with videos and services owned by others such as Google Inc.

The agency also affirmed that providers may charge subscribers based on how much data they consume. The pricing issue has become more important as companies including Netflix Inc. stream movies and other data-hungry content over the Web.

The rules create "a strong and sensible framework" that "protects Internet freedom and openness," FCC Chairman Julius Genachowski, a Democrat appointed by President Barack Obama, said before the vote. "We're adopting a framework that will increase certainty for businesses, investors and entrepreneurs."

Commissioner Meredith Atwell Baker, one of two Republicans to vote against the regulations, called the rules an overreach. "There is no factual basis to support government intervention," she said. "The majority's approach will inhibit the ability of networks to freely evolve and experiment."

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net.