By Stephanie N. Mehta
October 22, 2009

The FCC will move ahead with rules to keep Internet “free and open,” but the war with telcos isn’t over yet.

By Jia Lynn Yang, writer

A winner might finally be emerging from the convoluted Net neutrality debate, and it’s definitely not the telcos and cable operators.

The Federal Communications Commission voted today to move forward on crafting Net neutrality rules, which would mandate phone and cable companies to treat all web content equally, rather than collect fees to deliver some sites faster than others.

Today’s development, declared by the FCC to be “the next chapter of a longstanding effort to preserve the free and open Internet,” is hardly a surprise. President Obama has supported net neutrality rules since back in his Senate days. He campaigned on it, and then when he became president, appointed Julius Genachowski, a longtime supporter of Net neutrality, to the FCC chair position.

The debate, which has raged for at least the last five years, has pitted pro-Net neutrality upstarts like Google (GOOG), Amazon (AMZN) and eBay (EBAY) against AT&T, (T) Comcast (CMCSA) and Verizon (VZ). One source of contention has been whether Genachowski will exempt online companies like Google and Skype and only target broadband providers. As Verizon CEO Ivan Seidenberg recently said, “If it applies only to us, the government will in effect be favoring one set of competitors over another.”

If Google, Amazon and others actually this fight, they will have overcome long odds. AT&T, in particular, has a deep presence (and deep pockets) in Washington, and the company is going all out in its opposition. According to a report today from the Washington Post, this past weekend the company’s chief lobbyist Jim Cicconi asked AT&T’s 300,000 employees to write letters to the FCC opposing net neutrality.

But it’s not all scorched earth campaigning. Google and Verizon released a joint statement earlier this week declaring some common ground. And Comcast’s executive vice president David L. Cohen extended some conciliatory words to the FCC: “We share and embrace the objective of an open Internet, as we always have. While we may ultimately not agree on the level and extent of government involvement needed to accomplish this important objective, we appreciate and support Chairman Genachowski’s commitment to have a fair, fact-based, and data driven process to explore these issues.”

Despite all this momentum, the coast isn’t clear yet for net neutrality fans. Some Democrats on the Hill (many of whom have accepted campaign contributions from AT&T) are grumbling about the new rules. And Republican Senator Kay Bailey Hutchison has warned she might block Genachowski, setting up a showdown between Congress and the FCC.

So AT&T employees: don’t put your pens down quite yet.

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