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The Internet in Transition
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Keeping the Internet Open to Innovation

In its relatively short history, the Internet has fostered an unprecedented wave of innovation. New technologies, services and businesses have risen from scratch to transform the ways people communicate, transact business, and participate in democratic society. This remarkable growth is a direct consequence of a legal and technical framework that emphasized openness, innovation and competition. This framework has ensured that anyone with a good idea could create a new service or application and offer it to a worldwide audience, at relatively low cost and without needing permission from network operators or governments. There have been no centralized "gatekeepers" for the Internet, dictating which new services and technologies will be allowed or how they must be designed. This fundamental openness has helped generate the Internet's success.

The future of the open Internet is not at all certain. Some network operators have suggested that they may seek to charge fees to deliver or prioritize selected traffic; some have sought to limit traffic associated with certain high bandwidth applications. This creates a risk that network operators could determine which online services will work smoothly and which will not. A recent FCC decision purports to address this issue, but leaves substantial uncertainty and asserts a dangerously elastic concept of FCC regulatory authority over Internet matters.

Meanwhile, advocates and policymakers pursuing various legitimate policy goals -- for example, protecting against copyright infringement, ensuring convenient intercept access for law enforcement, or promoting a robust 911 system -- have sought to burden network operators with design mandates that could stifle innovation. In addition to design mandates, in the copyright field there are open legal questions about the extent to which those who build devices or online services should be liable for infringement committed by users. Imposing liability on true bad actors is important for enforcing copyright, but broader or uncertain liability could create crippling liability risks for innovators and curtail the development and availability of technologies that capitalize on the Internet's strengths for interactivity, collaboration, and user-generated content.

The current environment also presents opportunities for expanding the Internet's innovative potential. Increases in bandwidth, more ubiquitous and mobile connectivity, and higher broadband penetration rates are likely to foster a wide range of new possibilities for Internet use. But in recent years, the United States has been slow to match other nations' gains in broadband penetration and speeds. Countries such as Korea and Japan have made deployment a top priority and have achieved much wider availability of broadband at much higher speeds. Wireless technologies are also likely to be at the center of many cutting edge developments, but will depend on smart and forward-thinking spectrum policy.

In order to keep the Internet open to innovation, President Obama and Congress should take specific steps, including the following:

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