The final piece in a four-part series on the Federal Communication Commission’s six net neutrality principles:

During a recent webcast from the Brookings Institute, Federal Communications Commission (FCC) Chairman Julius Genachowski explained six principles of net neutrality and proposed making them official rules. Let’s take a closer look at proposed rules five and six, which focus on devices and competition.

No. 5: Broadband providers can’t block or demote lawful traffic, or privilege their own content over that of their competitors.

The FCC’s fifth rule touches on a number of examples we’ve discussed in previous parts of this series, such as AT&T’s classifying real-time gaming as an “aspirational [broadband] service,” and Verizon Wireless being taken to task for blocking text messages from a political organization.

A scenario the Knight Center of Digital Excellence proposed in a previous blog is that if the FCC’s net neutrality rules are not enacted: A service provider could favor information from Microsoft over Google by purposely slowing Goggle’s content delivery to create a competitive disadvantage.

Since Genachowski’s webcast, a more critical eye has been turned to service providers that had been trying to find ways to better position themselves for a future Internet stranglehold. Verizon was recently taken to task for its numerous handset exclusivity deals, for example. (It has since responded by publicly stating it would work to reduce these type of deals.)

No. 6: Broadband providers must be transparent about their services.

Both the fifth and sixth principles have recently been added to a list the FCC has been touting for quite some time, but have caused the heaviest debate between various providers. The sixth principle, in particular, has been a major sticking point.

Major broadband providers feel strongly that the billions of dollars they’ve poured into their networks should provide them the exclusive right to operate those networks however they want. That includes offering premium services over their lines to differentiate themselves from competitors – and earn a healthy return on their investments in the process.

If all providers are forced to be transparent about their services (as well as follow other rules that limit handset exclusivity, for example), it becomes increasingly difficult to establish a competitive advantage and handicap smaller providers from having equal access to consumers. It could also lead to consumers having complete freedom to choose what device they want to use and what service that device will use to connect. No one, for example, will be forced to choose AT&T as a provider because he or she simply wants an iPhone.

Those are great scenarios for consumers, aren’t they? Imagine: Instead of providers trying to ignore or hide new types of innovative programming, they’ll simply have to develop the infrastructure to support it, right?

Not necessarily. Both broadband providers opposing Genachowski’s proposal and Republicans that sit on the FCC and in Congress have expressed the opinion that network neutrality regulations would likely discourage broadband providers from expanding and upgrading their systems.

How do you view that statement? Are major providers trying to make the point that falling profit margins would simply lead to a lack of research and development dollars? Or is it a threat to essentially hold innovation hostage until they get what they want?

No matter how you view it – or any of the examples we’ve provided throughout this series – the fact remains that there are a lot of complicated issues to sort through – even well after the five-member FCC votes on Genachowski’s net neutrality proposal Thursday, Oct. 22.

For his part, Genachowski commented in a recent interview that as long as cable and telecommunications networks are delivering “high-speed, affordable broadband to all consumers in a given area,” marketplace limitations should be sufficient. However, if they “fall short” in any area or attribute, he said the FCC will propose “alternative and creative solutions” as part of its plan.

Further reading:

• Part one
• Part two
• Part three

Tags: AT&T, bandwidth, Brookings Institution, competition, Congress, digital, economy, FCC, Federal Communications Commission, Google, high-speed, infrastructure, innovation, Internet, iPhone, Julius Genachowski, KCoDE, Knight Center of Digital Excellence, Microsoft, Net Neutrality, network, Republican party, Verizon