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FCC mulls Web traffic rules for December meeting

By Jasmin Melvin

WASHINGTON (Reuters) - Telecommunications regulators postponed their December meeting, a move that could give them more time to consider whether they will take on controversial Web traffic rules.

The Federal Communications Commission was scheduled to meet December 15, but the agency on Tuesday said it would postpone the meeting to December 21. The delay gives the FCC an extra week to prepare its agenda, typically released three weeks prior to the meeting date.

Industry insiders had said the meeting was likely to be postponed after reports that the FCC planned to take up Net neutrality -- also known as open Internet principles -- at its December meeting spurred Republican opposition.

FCC spokeswoman Jen Howard declined to comment on whether the agency would address Net neutrality at the meeting.

Net neutrality rules could end the debate over whether high-speed Internet providers should be allowed to block or slow information or charge websites for a "fast lane" to reach users more quickly.

"The signals out there seem to be they are in fact contemplating a vote in December," said Jeffrey Silva, a telecommunications policy analyst with Medley Global Advisors.

"The situation's very fluid at the present time, and I think they're carefully considering the message they've received from Capitol Hill and trying to figure out their next step," Silva said of the FCC.

Republicans have opposed Web traffic rules, saying regulations could force companies to cut investment budgets and jobs to preserve profits.

Nineteen House Republicans last week signed a letter that said any FCC action on Net neutrality would be a mistake.

The FCC heard opposing views from phone, cable and Internet companies over the summer in its efforts to develop a framework for how Internet traffic should be managed, but talks crumbled, particularly over the treatment of wireless broadband.

At stake is how quickly handheld devices, like Research in Motion Ltd's BlackBerry and Apple Inc's iPhone, can receive and download videos and other content.

Wireless carriers are lobbying to be allowed to prioritize Internet traffic on congested wireless networks and have said they already do so to allow handsets to make and receive phone calls.

But Net neutrality proponents and public interest groups fear that creating a two-tiered Internet, where content providers able to pay more get faster speeds to reach their users more quickly, would harm consumers.

RECLASSIFICATION UNLIKELY

Analysts say any rules that may come from the FCC on net neutrality are likely to steer clear of broadband reclassification.

The agency in June proposed reclassifying broadband regulation under existing phone rules, typically considered a stricter regulatory regime.

The proposal came as a bid to reclaim oversight lost after a U.S. appeals court ruled the FCC overstepped its bounds by sanctioning Comcast Corp for blocking bandwith-hogging online applications.

The rule would allow the agency to regulate broadband access as a telecommunications service instead of as an information service, putting the FCC's authority on sounder legal footing.

Analysts at Stifel Nicolaus said in a research note that the FCC is likely to forego reclassification in favor of building on a draft net neutrality bill developed by House Commerce Chairman Henry Waxman in September.

The draft legislation had support from industry players as a temporary legislative fix, but lacked enough bipartisan support to move forward.

But Waxman's bill fell short of holding mobile providers to more stringent net neutrality standards. Silva said the FCC's rules would likely also treat wireless differently.

"Whatever comes out would leave a lot of flexibility for wireless in light of their spectrum challenges and some of the different network management challenges they have," he said.

Still, any action will face heavy scrutiny from a Republican-led House of Representatives next year and could also face legal challenges from industry.

Silva noted that even those who initially supported the Waxman draft bill could jump ship based on the new legislative landscape.

"Post midterm (elections), the prospects are less that the FCC would go forward with the (reclassification) option. You have to wonder what the incentive would be for industry to go along with any kind of regulatory add-on," Silva said.

(Reporting by Jasmin Melvin)

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