During the press conference portion of the FCC’s Notice of Proposed Rulemaking today, Chairman Genachowski was asked how the proposed rules would effect broadband expansion.

The comments were recorded on the openinternet.gov blog as follows,

One reporter asks about the connection between the Broadband Plan and Open Internet. “The Broadband process has always assumed…that there needs to be a free and open internet, it needs to be preserved,” the Chairman responds.  Though with regards to the overlap between the two, “we’ll be dealing with them in separate proceedings.”

But as I pointed out here, the Phoenix Center has already confirmed that the broadband stimulus will be seriously impacted by the proposed FCC rules.  The Phoenix Center’s report shows that there is a correlation between financial stability and sustainability and network management.  They’re research shows that networks in urban environments and rural areas where bandwidth is more expensive leaves them two choices to meet the needs of their customers:

1. Network Management Techniques; or,
2. Build up of Network Capacity

Because of the expense of building a more dense network in these areas, network management techniques become the only real option for these companies.

Thus it seems there is a large Catch 22 elephant in the room that the FCC has yet to address.  As the Chairman commented, there are separate proceedings scheduled for both.  It will be interesting to watch and see how much cross talk these two proceedings have of the others issue.