Key U.S. lawmaker backs FCC on eve of Web rule

The endorsement from Rick Boucher, chairman of a key House committee, came on the eve of an FCC meeting on so-called net neutrality rules, which aim to keep the Web open and lessen the power of telephone companies to decide the content their customers can see.

Commenting on a policy fight that analysts expect to end in court, Boucher said he would consider legislative action if the telecommunications industry challenged the proposal.

The FCC is moving in exactly the right direction, said Boucher, a Virginia Democrat who is chairman of the House of Representatives' Energy and Commerce Subcommittee on Communications, Technology and the Internet.

Advocates of net neutrality such as Google Inc, Amazon.com Inc and public interest groups, say service providers such as AT&T Inc, Verizon Communications Inc and Comcast Corp must be barred from blocking or slowing content based on how much revenue it could generate for them.

But the service providers say the increasing volume of bandwidth-hogging services, such as video, requires very careful management of both landline and wireless networks.

The Supercomm telecom industry trade show in Chicago was abuzz on Wednesday with complaints about the proposal to forbid operators from discriminating against any legal content that third-parties want to deliver over their networks.

Verizon Chief Executive Ivan Seidenberg said the debate around the proposal is extremely troubling and could halt progress in U.S. broadband development.

If we can't earn a return on the investment we make in broadband, our progress will be delayed, Seidenberg said in his Supercomm keynote.

At an FCC meeting on Thursday, a slate of three Democrats and two Republicans will decide whether to formally propose the net neutrality rules, which FCC Chairman Julius Genachowski first unveiled last month.

But If the FCC's proposal is as tough as it appears to the carriers, also known as Bell operators, Stifel Nicolaus analyst Chris King said it will most likely end up in court.

Any ruling that moves the needle away from the Bells would fairly certainly wind up in the court fairly quickly, King said.

Boucher has been meeting with broadband providers, tech companies and public interest groups since March and hopes they can reach an agreement in the not too distant future.

Hopefully there will not be challenges, Boucher said. If there are, hopefully those rules will be upheld, but that leads to other possibilities as well.

Boucher spoke with reporters after an event that highlighted the successful deployment of high-speed Internet to a rural community in his district using airwaves vacated by broadcasters that are now using digital signals.

His comments come amid a flurry of lobbying from opponents of the proposals, which are not likely to result in a final rule until the spring, after a public discussion.

Qwest Communications International Inc's senior vice president for public policy & government relations, Steve Davis, said at Supercomm that carriers are worried net neutrality rules will hurt investments in telecommunications and end up raising prices for consumers.

The phone companies, for the most part, have said they support rules to protect the openness of the Internet, but they are concerned about regulations that would strip away any of their power to manage bandwidth-hogging applications that could disrupt network performance.

Earlier this year, House Energy and Committee Chairman Henry Waxman threw his support behind a net neutrality bill that was introduced by Democrats Ed Markey of Massachusetts and Anna Eshoo of California. There is no companion bill in the Senate, but North Dakota Democrat Byron Dorgan said earlier this year that he is considering introducing a similar bill.

It is my hope we will be in a position to legislate at the appropriate time with regard to network neutrality, Boucher said.

He also said a comprehensive wireless modernization bill is necessary given all the developments in the wireless sector.

At the proper time, probably next year, I'll look forward to taking that up, he added.

(Reporting by John Poirier and Sinead Carew; editing by Andre Grenon)