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FTC Chief Cool on Net Neutrality

Lawmakers should proceed cautiously on passing laws involving network neutrality, Federal Trade Commission (FTC) Chairman Deborah Platt Majoras said today.

Speaking at the Progress and Freedom Foundation's annual summer conference in Aspen, Colo., Majoras announced she was forming an Internet Access Task Force to study convergence issues with a focus on network neutrality.

Calling network neutrality the "most hotly debated issue in communications," Majoras herself expressed doubts about the need for any new legislation.

"I ... question the starting assumption that government regulation, rather than the market itself under existing laws, will provide the best solution to a problem," she said in a keynote address.

Verizon, AT&T and other large telephone companies want to charge content and application service providers extra fees based on bandwidth consumption to use their new fiber lines.

The proposed business model raised howls of protests from technology giants, such as Yahoo, Google and Microsoft, who claim the plan will lead to discriminatory handling of Internet traffic packets.

The high-tech industry is urging lawmakers to include network neutrality protections in any telecom reform bill approved by Congress, a notion so far rejected by the U.S. House of Representatives and the Senate Commerce Committee.

"The FTC frequently is asked to weigh in on proposed legislation and policies," Majoras said.

"We virtually always assert the principle that, absent clear evidence of market failure or consumer harm, policymakers should not enact blanket prohibitions of particular forms of business conduct or business models or place requirements on how business is conducted."

Majoras stressed three federal agencies -- the FTC, the FCC and the Department of Justice -- are already empowered to address issues of network neutrality.

"We should not forget that we already have in place an existing law enforcement and regulatory structure," she said.

"Before adding to it, we should determine that the current scheme is insufficient to address potential issues as they may arise in this area."

Majoras also said Congress should not approve any new regulatory schemes without a cost-benefit analysis. In addition, she said, lawmakers concerned about network neutrality should consider whether a less broad approach might be a better way to approach the issue.

She added that proposed network neutrality legislative language could result in lowering the levels of broadband investment with the end result of diminishing competition.

"Broad regulatory mandates that employ a 'one size fits all' philosophy, without regard to specific facts, always have unintended consequences, some of which may be harmful and some of which may not be known until far into the future," Majoras said.

The U.S. Senate is expected to vote on the issue of network neutrality when it returns from its August recess.

The Senate Commerce Committee rejected the notion of network neutrality in late June, leaving the issue to the Federal Communications Commission (FCC) for further study.

The U.S. House of Representatives passed legislation in early June overwhelmingly rejecting an amendment to the bill calling for network neutrality.

Differences between what the Senate eventually passes and what the House has already voted on will be hammered out in a joint conference committee.