Internet cop: President Obama's top man at the Federal Communications Commission tries to regulate the Net.

• Author: Suderman, Peter
• Position: Julius Genachowski

ROBERT McDOWELL becomes effusive when talking about the World Wide Web. "The beauty of the Internet is that it has been somewhat lawless," says the Republican, one of five appointees who run the Federal Communications Commission (FCC). The lack of government mandates, McDowell says, has made the Net "the greatest deregulatory success story of all time," a "sort of libertarian heaven."

Is that heaven about to crash down to earth? Julius Genachowski, the man hand-picked by President Barack Obama to chair the FCC, insists not. "I've been clear repeatedly that we're not going to regulate the Internet," he told The Wall Street Journal in February 2010. But his actions suggest otherwise. Since taking office in June 2009, Genachowski, a tech entrepreneur and former FCC counsel, has led the commission on an unprecedented quest for power over the Web's network infrastructure, sparking a thunderous, confusing lobbying battle over who gets to control the Net.

"If the government starts to get involved with regulation of Internet network management," McDowell warns, "you'll start to see the politicization of decisions in that realm." At this point, there's no if about it: From his first major speech to a hurried and secretive rulemaking procedure in the final weeks of 2010, Genachowski has made it his mission to plant the seeds of government control within the core of the Internet--all under the guise of "preserving Internet freedom."

They Call It Net Neutrality

Like so many political slogans, Internet freedom sounds great. But what does it mean in practice? For Genachowski and the rest of the Obama administration, "Internet freedom" is a feel-good euphemism for the techie idea known as "net neutrality."

At its most basic, net neutrality is the belief that all bits and bytes that travel over the Internet should be treated equally: no discrimination, no paid prioritization, just first-come-first-served access for everyone all the time. As an egalitarian approach to the Web, it is more a pre-technical philosophy than a clear guide to managing network infrastructure. The applied theory of net neutrality is that routers--the traffic management devices that send packets of information from one computer or server to the next--should treat each piece of information like every other piece, be it an email message, a video, a game, or 3D porn. This is not a bad idea; indeed, it is largely how the Internet works already. But net neutrality advocates warn that without federal intervention, corporate giants won't leave it this way for long; they will begin setting up pricey, priority-traffic toll roads across the Web.

The neutrality concept is a direct descendant of "common carrier" regulation of phone companies. When wire-based phone networks ruled the earth, they were treated as public utilities. The feds forced them to share their infrastructure with their competitors at regulated rates, a restriction on their property rights that was enforced under the pleasant-sounding banner of "equal access."

It didn't take long for politicians to start fretting about equal access on the Web. In a 1994 speech, Vice President AI Gore pondered this loaded question: "How can government ensure that the [emerging Internet] will permit everyone to be able to compete with everyone else for the opportunity to provide any service to all willing customers? Next, how can we ensure that this new marketplace reaches the entire nation?" Access, opportunity, competition--how would these goals ever be achieved without the government's involvement?

Answer: easily. Internet access exploded throughout the late 1990s and the following decade--no federal broadband regulation required. By 1999 more than 30 million people could dial in from their homes. The Net's success in the absence of regulation was so apparent that even Democratic bureaucrats preached the gospel of nonintervention: In 1999 FCC Chairman William Kennard declared in a speech that "if we've learned anything about the Internet in government over the last 15 years, it's that it thrived quite nicely without the intervention of government." In the same speech, Kennard made the case for what he called a "high-tech Hippocratic Oath" for regulators: First, do no harm.

It worked. During the following decade, online activity exploded. Between 2001 and 2008, online commercial activity--which for all practical purposes did not exist the decade before--became big business, rising from about $8 billion a year to about $42 billion, according to the U.S. Department of Commerce. Simultaneously, broadband Internet access rapidly blazed a path from high-tech luxury service to mass-market must-have. In 2000 just 3 percent of homes had broadband access. By 2010 the figure had climbed to 66 percent, according to a report from the Pew Research Center's Internet & American Life Project.

But the net's success only made activists more vehement that it must be "preserved" through regulation. That's where net neutrality came in. In 2005, under the leadership of Republican Chairman Kevin Martin, the FCC adopted four "policy statements" outlining the principles that should govern Internet use and operation. Users, the commission asserted, are entitled to access their choice of lawful content, to use applications and services as they wish, to connect legal devices to the network provided they do no harm, and to enjoy the effects of competition among providers and networks. But these statements of principle were not regulations, and thus of dubious enforceability.

At first, the push for net neutrality was targeted at wire-line carriers--cable companies, DSL providers, and others who delivered Internet connections to fixed locations using expensive-to-install conduits. But by 2007, calls for net neutrality expanded to the growing wireless Internet, bringing mobile data networks like those operated by AT&T and Verizon into the crosshairs. Net neutrality gave online Democratic activists--the "netroots"--an issue in which "equality" was on one side and discriminatory corporations on the other. The sin of these corporate villains? Denying network access to those unwilling to pay for it.

"Network giants believe they should be able to charge Web site operators, application providers and device manufacturers for the right to use the network," the progressive media activists at Free Press warned in their online guide to the issue. "Those who don't make a deal and pay up will experience discrimination: Their sites won't load as quickly, and their applications and devices won't work as well."

The issue never really caught on with the broader public, but it did become a partisan rallying cry. In 2008 presidential candidate Barack Obama made net neutrality a campaign promise, vowing to achieve it through the FCC. The promise was politically smart. Although regulating Internet traffic was barely raising eyebrows among average voters--most of whom were busy enjoying easy access to the Internet--the idea was much loved by two groups important to Obama: the digitally savvy army of online activists whose fund raising and organizing helped put the president in office, and a collection of high-flying, Democrat-supporting Silicon Valley companies. Netroots powerhouses such as...