Reviving the West

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Comment by GORDON BROWN

In 2008, at a time of financial peril, the world united to restructure the global banking system.

In 2009, as trade collapsed and unemployment rose dramatically, the world came together for the first time in the G-20 to prevent a great recession from spiralling into a great depression.

Now, facing a low-growth austerity decade with no national exits from long-term unemployment and diminished living standards, the world needs to come together in the first half of 2011 to agree on a financial and economic strategy for prosperity far bolder than the Marshall Plan of the 1940s.

Time is running out on the West, because both Europe and America have yet to digest the fact that all the individual crises of the last few years from the sub-prime crisis and the collapse of Lehman Brothers to Greek austerity and Irelands near-bankruptcy are symptoms of a deeper problem: a world undergoing a far-reaching, irreversible, and, indeed, unprecedented restructuring of economic power.

Of course, we all know of Asias rise, and that China exports more than America and will soon manufacture and invest more as well. But we have not fully come to terms with the sweep of history. Western economic dominance 10% of the worlds population producing a majority of the worlds exports and investment is finished, never to return. After two centuries in which Europe and America monopolised global economic activity, the West is now being out-produced, out-manufactured, out-traded, and out-invested by the rest of the world.

Otto von Bismarck once described the patterns of world history. Transformations do not happen with the even speed of a railway train, he said. Once in motion they occur with irresistible force. If the West fails to understand that the real issue today is responding to the rise of Asian economic power by renewing its own, then it faces the grim prospect of steady decline, punctuated by brief moments of recovery until the next financial crisis. Throughout it all, millions will be without jobs.

So why, despite this new reality, am I convinced that the 21st century can be one in which the United States, by reinventing the American dream for a new generation, remains a magnet for the greatest companies, and in which Europe can be home to a high-employment economy'

Because, fortunately for all of us, soon one billion and more new Asian producers will first in their tens of millions, then in their hundreds of millions become new middle-class consumers, too.

The growth of an Asian consumer revolution offers America a road to new greatness. Today Chinese consumer spending is just 3% of world economic activity, in contrast to Europe and Americas 36% share. Those two figures illustrate why the world economy is currently so unbalanced.

By 2020 or so, Asia and the emerging-market countries will bring double Americas consumer power to the world economy. Already, companies like GE, Intel, Proctor & Gamble, and Dow Jones have announced that the majority of their growth will come from Asia. Already, many Korean, Indian, and Asian multinationals have majority foreign (including US) shareholdings. This new driver of world economic growth opens up an opportunity for America to exploit its great innovative and entrepreneurial energy to create new, high-skilled jobs for US workers.

Asian consumer growth and a rebalancing of the global economy can be the exit strategy from our economic crisis. But the West will benefit only if it takes the right long-term decisions on the biggest economic questions what to do about deficits, financial institutions, trade wars, and global cooperation'



First, deficit reduction must occur in a way that expands investment in science, technology, innovation, and education. Both public and private investment will be needed in order to deliver the best science and education in the world.

Second, new markets cannot be tapped if the West succumbs to protectionism. Banning cross-border takeovers, restricting trade, and living with currency wars will hurt the United States more than any other country. In the last century, Americas own domestic market was so big and dominant that it need not worry much about trade rules. But, with Asia poised to be the biggest consumer market in history, US exporters the greatest potential beneficiaries will need open trade more than ever. America must become the champion of a new global trade deal.

A commitment to public investment and open trade are, however, necessary but insufficient conditions for sustained prosperity. All the global opportunities of the new decade could fade if countries withdraw into their own national shells.

In another age, Winston Churchill warned a world facing the gravest of challenges not to be resolved to be irresolute, adamant for drift, solid for fluidity, and all powerful for impotence. I believe that the world today does have leaders of Churchills stature. If they work together, drift need not happen.

America must now lead and ask the world to agree on a modern Marshall Plan that coordinates trade and macroeconomic policies to boost global growth. America should work with the new chair of the G-20, French President Nicolas Sarkozy, to revive private lending by creating global certainty about the standards and rules expected of banks.

Agreement is also needed that each countrys multi-year deficit-reduction plan will be accompanied by acceleration of consumer spending in the East and of targeted investment in education and innovation in the West. Such a plan must encourage China and Asia to do what is in their and the worlds interest: reducing poverty and expanding the middle class. And the West must speed up structural reforms to become more competitive while ensuring that fiscal consolidation does not destroy growth.

Through joint action, the G-20 economies can see not just a marginal change, but growth above 5% by 2014. Instead of a world deadlocked over currencies and trade and retreating into the illusory shelter of protectionism, we could see US$3 trillion of growth converted into 25 million to 30 million new jobs, and 40 million or more people freed from poverty.

Project Syndicate
> Gordon Brown is a former British prime minister.

Is Islamic finance the new challenge to Wall Street?

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THINK ASIAN BY ANDREW SHENG

I WAS in Kuala Lumpur in October attending the Global Islamic Finance Forum, organised by Bank Negara and the Malaysian International Islamic Finance Centre. The whole glitterati of the Islamic world was here, and coincidentally, the HSBC Asia Board also held its meeting, so it was also good time to catch up with all the Hong Kong good and great, including the incoming taipans at the bank.

In the 1990s, Islamic finance was a fledgling fringe industry. But today, its size has grown from roughly US$150bil to about US$1 trillion in size. This is, of course, still small relative to some of the largest global fund managers and universal banks, who manage more than US$1 trillion each. But the double-digit growth and potential size of the market cannot be ignored. Some pundits think that the market size will reach US$2 trillion within the next five years.

There are roughly 1.3 billion Muslims in the world, with 138 million in India and roughly 30 million in China. These are growing markets in terms of income and wealth. As the Muslim community seeks to invest in interest-free banking, Islamic funds have been growing in leaps and bounds. Today, there are roughly US$800bil in Islamic banking funds, US$100bil in the sukuk (or Islamic bond) market and another US$100bil in takaful (Islamic insurance) and fund management business. Hong Kong, of course, introduced the Hang Seng Syariah Compliant China Index Fund in 2008 to attract Muslim investors.

As oil prices continue to remain at high levels, the Middle East oil-producers will continue to generate surpluses that must be parked somewhere. With the Western markets and economies under pressure, some of that money has moved Eastwards.

Will Islamic finance be a serious challenge to traditional Wall Street finance' That is a question that deserves a good answer.

First of all, thanks to the good work of Bank Negara and the Gulf central banks, the infrastructure for Islamic finance has been laid, with the establishment of the Accounting and Auditing Organization for Islamic Financial Institutions or Aoffi, the Islamic accounting standards authority, the Islamic Financial Services Board or IFSB, the international Islamic financial regulatory standard-setting organisation and the Institute for Education in Islamic Finance or Inceif. The International Shariah Research Academy for Islamic Finance or Isra also provides an invaluable website that is increasingly the transparent source for syariah interpretations on what is considered acceptable under Islamic law.

For people unfamiliar with Islamic finance, the basic principle of Islamic banking is the sharing of profit and loss and the prohibition of usury. Simply put, interest is prohibited, but profit sharing is not. A cynic can say that with zero-interest rate policies adopted by advanced country central banks today, they are also practicing Islamic banking.

The distinctive elements of Islamic finance are its ethical element (the prohibition of usury and exploitation of the borrower), the preference for trading in real assets (rather than synthetic products), partnership between the investor and investee and its governance structure (requiring a syariah council).

The point to remember in Islamic finance is that there is no Islamic global reserve currency. Although Islamic banks are growing rapidly, there is no assurance that they are not subject to the problems of non-performing loans and bank runs that are endemic in commercial banking.

What has been most innovative was the launching this week of an International Islamic Liquidity Management Corp (IILM) aimed to assist institutions offering Islamic financial services in addressing their liquidity management in an efficient and effective manner. This institution addresses one of the fundamental problems of Islamic financial institutions the provision of adequate liquidity in times of stress. Once there is an international lender of last resort facility (to supplement and not to replace national facilities), there would be better confidence in the liquidity of the Islamic financial services industry.

The IILM is expected to issue high quality syariah-compliant financial instruments at both the national level and across borders to enhance the soundness and stability of the Islamic financial markets.

The signatories of the IILM Articles of Agreement are the eleven central banks or monetary agencies of Indonesia, Iran, Luxembourg, Malaysia, Mauritius, Nigeria, Qatar, Saudi Arabia, Sudan, Turkey and the United Arab Emirates. The Islamic Development Bank and the Islamic Corp for the Development of the Private Sector are the multilateral organisations participating in the initiative.

Islamic finance has come a long way, but there is still a long way to go, since US$1 trillion is still small relative to US$232 trillion in conventional financial assets (excluding derivatives).

The real test with any challenger to Wall Street finance is whether Islamic finance will be more efficient, more ethical and more stable. Islamic finance fulfills the needs of the Islamic customer. Ethics aside, there are two crucial problems in finance information asymmetry and the principal-agent problem. Because markets are not completely transparent and information is unequal among market participants, we tend to rely on trusted agents, such as banks, to act on our behalf. Financial institutions are fiduciary agents on behalf of the principals, the real sector savers and borrowers.

What this Wall Street crisis has demonstrated is that complex financial engineering enabled very smart bankers to make profits at the expense of the public purse, because they have become larger (five times greater than GDP). When they fail, the public bears the losses because they are too large and too powerful to fail. This is not the level playing field that is a pre-condition of free markets.

The real question is that under information asymmetry, how do the principals know that the risks of the agents (the banks) have shifted to principals through moral hazard' Islamic finance faces exactly the same dilemma.
If Islamic finance theoreticians can solve this problem, they would be doing a great service to the rest of the world. Then we would truly have an alternative to Wall Street.

● Tan Sri Andrew Sheng is adjunct professor at Universiti Malaya, Kuala Lumpur, and Tsinghua University, Beijing. He has served in key positions at Bank Negara, the Hong Kong Monetary Authority and the Hong Kong Securities and Futures Commission, and is currently a member of Malaysias National Economic Advisory Council.

Fall 2010 security suite roundup

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The fall months may be the season for colder weather and dying leaves, but in the software world it means major updates for security suites. We've reviewed and benchmarked 11 suites, organized them along the traditional line of cost, and picked one in each category that we highly recommend.

We looked at four updated free security options: AVG Anti-Virus Free 2011, Panda Cloud Antivirus 1.3, Microsoft Security Essentials 2, and Ad-Aware Free Internet Security 9. Other well-known free security programs, such as Avast and Avira, generally update in late winter or spring, so they were not included.

AVG made some big improvements this year, notably in tightening up its installation and scans, comparing well with the lightweight Panda Cloud Antivirus' small performance hit. If you're looking for a newly updated free suite, though, AVG Anti-Virus Free 2011 is your best choice.

Seven pay-for-play security suites also updated and were reviewed, including well-known powerhouses like Norton and Kaspersky, but also Trend Micro, BitDefender, Webroot, PC Tools, and AVG Internet Security 2011, the paid upgrade from AVG's free version.

Old haters of Norton are seriously missing out if they haven't given it a shot in the past few years. It's fast, effective, posts minimal system performance hits, and is our choice for top paid security suite of the season. It's not the only game in town, though, as Trend Micro has revamped to offer serious competition, and what Kaspersky lacks in quickness it makes up for in efficacy.



In addition to our product comparison charts (free | paid), check out CNET Labs' performance benchmark comparisons below. (Read more on how CNET Labs tests security programs.)

We can see from these tests that though no single program scored better than all the others, there were clear leaders in the key trials of start-up time impact, shutdown time impact, and time to complete a full scan. Panda Cloud Antivirus is highly competitive with AVG Free, whereas Norton's performance strengths lie in its threat prevention and detection, because several of its competitors leave a smaller footprint on your system.
Free security suite benchmarks:

Security program	Boot time	Shutdown time	Scan time	MS Office performance	iTunes decoding	Media multitasking	Cinebench
Unprotected system	42.5	11.28	n/a	917	180	780	4,795
AVG Anti-Virus Free 2011	55.24	11.59	548	1,039	200	870	4,709
Panda Cloud Antivirus Free 1.3	50.12	14.8	540	1,044	199	832	4,790
Microsoft Security Essentials 2	54	18	1,560	1,038	201	800	4,790
Ad-Aware Internet Security 9	54	18	1,620	1,039	199	797	4,792

*All tests measured in seconds, except for Cinebench. On the Cinebench test, the higher number is better.
 
Paid security suite benchmarks:

Security program	Boot time	Shutdown time	Scan time	MS Office performance	iTunes decoding	Media multitasking	Cinebench
Unprotected system	42.5	11.28	n/a	917	180	780	4,795
Kaspersky Internet Security 2011	47.49	17	1,750	1,068	207	823	4,661
Webroot Internet Security Complete 2011	47.86	15.97	1,459	992	198	848	4,729
BitDefender Total Security 2011	47.84	13.82	775	1,032	200	825	4,769
Trend Micro Titanium Maximum Security 2011	44.79	16.56	500	1,060	201	852	4,765
Norton Internet Security 2011	48.91	11.78	890	1,028	199	861	4,780
AVG Internet Security 2011	56.21	16.3	480	1,043	198	820	4,759
PC Tools Internet Security 2011	55	20	1,245	1,086	204	832	4,792

*All tests measured in seconds, except for Cinebench. On the Cinebench test, the higher number is better.

Seth Rosenblatt

Full Profile E-mail Seth Rosenblatt

Seth peers into the deep, dark corners of software so that you don't have to. He has yet to suffer a single nightmare about OS/2.
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China has world's most profitable banking sector

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China's banking sector has been outshining its foreign peers since 2008 when the global financial crisis devastated Wall Street giants like Lehman Brothers. Its total profits, profit growth and returns on capital all rank highest in the world.

The net profits of China's banking sector rose to 668.4 billion yuan in 2009 after a surge of 30.6 percent to 583 billion yuan in 2008. 

The largest five state-owned commercial banks, known as the "Big Five," have been doing well so far this year. The first three quarters has seen a 29 percent increase in the Big Five's net profits, and small and medium-sized shareholding banks saw a more than 30 percent increase.

So far, 18 Chinese banks are on the list of the world's top 500 banks. Three of the Big Five are among the world's largest in terms of capitalization. In the world's five most profitable banks, three are from China.

The Big Five includes the Industrial and Commercial Bank of China, Bank of China, China Construction Bank, the Agricultural Bank of China and Bank of Communications. They are all listed companies.

By Li Jia, People’s Daily Online 

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Politically charged web sites face frequent attacks

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Websites that publish controversial material are facing a barrage of politically-motivated computer attacks, say Harvard University researchers.

The researchers, who launched the survey after hearing complaints from website owners, identified almost 300 attempts to silence independent media and human rights websites over the past year.

"There is almost always a political component to these attacks," says Jillian York, one of the report's authors.

The researchers focused on distributed denial of service (DDoS) attacks, the technique that temporarily downed the Wikileaks website last month. DDoS attackers aim a flood of signals at a target website until the site, or the network that connects it to the internet, collapses under the strain of the incoming data.

Hundreds of attacks

The Wikileaks attacks were described at the time as a new and dangerous attempt to limit free speech. They are anything but new, according to the report. York and colleagues identified 140 attacks aimed at 280 media and human rights sites over the 12-month period ending in August of this year. They also surveyed the administrators of 45 media and human rights sites; 28 said they had been the target of a DDoS attack in the past year.

Targets include the protest site bauxitevietnam.info, which campaigns against a Chinese-backed project to mine bauxite in an environmentally sensitive part of Vietnam. It went down last January after tens of thousands of Vietnamese computer users were fooled into downloading software that aimed a flood of signals at the site.

Large scale problem

The Harvard team itself has been the victim of an attack. Their server also hosts the site of the Citizen Media Law Project, which supports online and citizen media. The site went down for two hours and remained unstable for a day at the end of August after being targeted by a network of 500 computers, says Hal Roberts, who also worked on the report. As with almost all other DDoS incidents, it is impossible to know who coordinated the attack.

The fact that attackers were able to force the law site offline illustrates the scale of the problem, adds Roberts. The site's server is overseen by two skilled administrators. For less well resourced sites, some of which are set up by volunteers using free-to-use software, the downtime can run to day or weeks. He and York suggest that media and human rights organisations run mirror sites at large blogging platforms, such as Blogger, which can withstand the traffic generated by most DDoS attacks.

Weapon or protest tool?

The Wikileaks attacks brought DDoS to the attention of the public, but security experts have long been aware of the problem. Gunter Ollmann of Damballa, a computer security firm based in Atlanta, Georgia, has blogged extensively on DDoS attacks and notes that as well as being used to silence critics, they are often used as a form of protest. Some commentators have described the attacks on PayPal and Mastercard, which took place after the companies severed links with Wikileaks, as virtual "sit-ins".

"DDoS tools and tactics are unfortunately a very common tactic, whether someone is trying to knock off the opposition within an online game, such as World of Warcraft, or extorting money from gambling sites in the lead up to a major sporting event," he says.

 by Jim Giles (NewScientist)
 

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Ernst & Young accused of hiding Lehman troubles

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A view of the Ernst & Young headquarters in New York December 20, 2010.

Credit: Reuters/Lucas Jackson

A view of the Ernst & Young headquarters in New York December 20, 2010.
Credit: Reuters/Lucas Jackson

By Grant McCool

NEW YORK (Reuters) - Accounting firm Ernst & Young was sued by New York prosecutors over allegations it helped to hide Lehman Brothers' financial problems, in the first major government legal action stemming from the Wall Street company's 2008 downfall.

The civil fraud case contends that Ernst & Young stood by while Lehman used accounting gimmickry to mask its shaky finances. The lawsuit says Lehman ran "a massive accounting fraud," but it did not name as defendants any former top executives at the investment bank whose September 2008 collapse helped spark the global financial crisis.

The lawsuit seeks more than $150 million in fees that Ernst & Young received from 2001 to 2008 as Lehman's outside auditor -- less than 1 percent of its global annual revenue -- plus other unspecified damages.

The lawsuit was filed by New York Attorney General Andrew Cuomo. People close to Cuomo said one factor in bringing the case was that he knows that the U.S. Securities and Exchange Commission already is investigating former Lehman chief Richard Fuld and other former top Lehman executives.

Cuomo "wants to go after the one party he knows isn't being sued," said John Coffee, a professor of corporate law at Columbia University.

In a statement on Tuesday, Ernst & Young said it intended to "vigorously defend" the lawsuit.

Lehman's bankruptcy occurred in the midst of a global financial crisis and was not caused by any accounting issues, the company said.

"Lehman's audited financial statements clearly portrayed Lehman as a highly leveraged entity operating in a risky and volatile industry," the accounting firm said.

Legal and accounting experts said earlier they expect that Ernst & Young will try to settle the case rather than engage in a long court fight.

"It tends to be lot less expensive for both parties to resolve it through settling and getting it behind them," said Bruce Pounder, an expert on accounting ethics and president of Leveraged Logic, an Asheville, North Carolina, firm that provides continuing education to accountants.

He said he does not see significant fallout for Ernst & Young in terms of its viability as an audit firm.

Ernst is the third-largest by revenue of the "Big Four" U.S. accounting firms, behind Deloitte and PwC.

Cuomo filed the lawsuit days before he is to leave office and become governor of the state in January. A spokesman for incoming attorney general Eric Schneiderman declined to comment.

REPO 105

Cuomo said in the civil complaint that for more than seven years leading up to Lehman's bankruptcy, the investment bank engaged in fraudulent accounting transactions that Ernst & Young explicitly approved. The case focuses on an accounting technique known as Repo 105, which temporarily removed as much as $50 billion in assets from the balance sheet in 2008.

"This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed," Cuomo said in a statement.

The lawsuit comes nine months after a court-appointed examiner in the Lehman bankruptcy concluded that Ernst & Young was "professionally negligent" in its audit duties.

The report by examiner Anton Valukas also said that Lehman could also have claims against Fuld and former chief financial officers Chris O'Meara, Erin Callan and Ian Lowitt for negligence or breach of fiduciary duty related to the use of Repo 105 transactions.

PAST CASES

The case, filed in New York state Supreme Court, is one of the biggest legal cases involving an accounting firm since Arthur Andersen was criminally indicted in 2002 over the Enron scandal.

The Ernst & Young case is a civil lawsuit, while Andersen was charged criminally and later convicted of obstruction of justice for its role in Enron's collapse.

The U.S. Supreme Court reversed the Arthur Andersen conviction in 2005, but the firm was virtually out of business by then -- and its reputation was shattered.

Andersen's demise reduced the number of big accounting firms that audit most large companies globally to just four, including Ernst & Young. Since then, prosecutors have been wary of charging entire firms with fraud because of worries that another audit firm collapse would harm the financial system.

In one major settlement, KPMG agreed in 2005 to pay $456 million to settle a federal investigation into questionable tax shelters, avoiding a potentially crippling criminal indictment. The firm agreed to make internal changes and to be overseen by an outside monitor temporarily as part of the pact.

In 1999, Ernst & Young agreed to pay $335 million to shareholders of Cendant Corp to settle a case stemming from an accounting scandal at the travel and real estate service company. Ernst & Young said at the time that it was misled by Cendant and had done nothing wrong.

London-based Ernst & Young employs about 140,000 people. It had revenue of $21.3 billion in the fiscal year ended June 30.

(Reporting by Grant McCool, Dena Aubin, Scot J. Paltrow and Dan Levine. Editing by John Wallace, Robert MacMillan and Matthew Lewis)

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FCC to approve Net neutrality rules Tuesday

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The Federal Communications Commission is set to vote on official Net neutrality rules tomorrow, which the agency claims will provide consumers, service providers, device makers, and application developers clear rules of the road for the Internet.

With the support of all three Democrats on the FCC, the regulation is set to pass. And the vote will mark the next step in what has been a politically charged debate between telephone and cable companies and consumer groups advocating for a free and open Internet.

The five-member commission, which is made up of three Democrats and two Republicans, has been working on developing these official rules of the road for more than a year. In September 2009, Chairman Julius Genachowski suggested adding to the original Internet Openness principles adopted by the commission under former Chairman Michael Powell.

The debate of what should be included in the new rules has raged ever since. Democratic supporters and consumer advocates along with some Internet companies have pushed for more stringent regulations. Meanwhile, Congressional Republicans and major telephone and cable companies have lobbied for lighter regulation.

Genachowski, who offered a preview of the plan earlier this month, has attempted to give each side a little of what it wants in the new rules, but neither camp has said they are completely satisfied. In fact, the two Democrats on the commission, Michael Copps and Mignon Clyburn, have been reluctant to go along with the chairman's plan because they believe it may be too favorable to major broadband providers. But FCC officials say the chairman has worked closely with these commissioners to satisfy their concerns. And now it looks as though the two Democrats will support the new rules, albeit somewhat reluctantly.

Clyburn released a statement today stating she will vote in favor of the new rules. Copps also said he'd vote for the rules, but in a statement today he noted that he believes things are missing from the order.

"While I cannot vote wholeheartedly to approve the item, I will not block it by voting against it. I instead plan to concur so that we may move forward," Copps said in a statement.

Meanwhile, Republican Commissioner Robert McDowell, who has long opposed Net neutrality regulation, said in an op-ed for The Wall Street Journal on Monday that the new rules are trying to fix a problem that doesn't exist.

"On this winter solstice, we will witness jaw-dropping interventionist chutzpah as the FCC bypasses branches of our government in the dogged pursuit of needless and harmful regulation," McDowell wrote. "The darkest day of the year may end up marking the beginning of a long winter's night for Internet freedom."
He went on to say:

"Nothing is broken and needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that Net neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure."

Senior representatives from the FCC held a press conference this afternoon to provide an overview of what the order will actually say. At a high level, there are three provisions that will become official FCC regulation.
The first rule is about transparency. Network operators of both fixed and wireless networks will be required to disclose to consumers, content providers, and device makers information that will be necessary for them to deploy services. In other words, if a broadband network operator is using network management techniques that affect an application or if a wireless broadband network provider doesn't allow a certain type of application, the service provider must provide information about the requirements for its network.

The second Net neutrality rule prohibits the blocking of traffic on the Internet. The rule applies to both fixed wireline broadband network operators, as well as to wireless providers. But the stipulations for each type of network are slightly different.

For wired networks, operators will not be allowed to block any lawful content, services, applications, or devices on their network. For wireless providers, the rule is somewhat limited and only prohibits the blocking of access to Web sites or applications that specifically compete with a carrier's telephony voice or video services.

The blocking rule for wireless and wireline networks also includes allowances for reasonable network management. This means that wireline and wireless broadband providers will be able to reasonably manage their networks during times of congestion to ensure every user can adequately access services.
And finally, the last rule applies only to fixed broadband providers. It prohibits fixed wireline broadband providers from unreasonably discriminating against traffic on their network.

Net neutrality zealots have already expressed dismay in Copps' support of the new rules.

"Internet users across America will have lost a hero if Commissioner Copps caves to pressure from big business and supports FCC Chairman Genachowski's fake Net neutrality rules--rules written by AT&T, Comcast, and Verizon, the very companies the public is depending on the FCC to regulate strongly," Jason Rosenbaum, the senior online campaigns director for the Progressive Change Campaign Committee, said in a statement.

But not everyone is upset that a compromise appears to have been reached.

Senator John Kerry (D-Mass.), released a statement today applauding the three Democratic commissioners for reaching a consensus on the rules.

"While he (Commissioner Copps) and Commissioner Clyburn, as well as many of the champions of network neutrality, including myself, would have supported a stricter order, I commend them for rising to the moment and making possible very meaningful progress to preserve the freedom to communicate and compete over the Internet," he said in the statement. "I also join them in commending Chairman Genachowski for his inclusive, thoughtful, and creative work in bringing parties together, airing all points of view, and finding a principled center."

The FCC meeting will be broadcast live starting at 10:30 a.m. ET.

Marguerite Reardon

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