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No net neutrality in Internet franchise bill passing Stevens’ committee

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No net neutrality in Internet franchise bill passing Stevens' committee

Washington (DC) – It may not have shocked a single senator whatsoever on the powerful Commerce Committee that the bill put forth by its chairman, Sen. Ted Stevens (R – Alaska), survived three days of markup session debates without having been amended by any of various measures that would have enforced so-called net neutrality. The original purpose of the measure would have been to disable legislation such as the Communications Opportunity, Promotion, and Enhancement Act (COPE) currently being debated, from enabling Internet service providers from charging content providers varying rates for different qualities of service or bandwidth consumption.

In committee votes taken late yesterday, the most prominent net neutrality amendment (there were several) offered by Senators Byron Dorgan (D – North Dakota) and Olympia Snowe (R – Maine) and supported by Sen. John Kerry (D – Mass.), was defeated in a tie vote of 11 – 11, with Snowe the lone supporting Republican. The Senate Committee-approved language was then passed by a vote of 15 – 7, and now the bill proceeds to the floor of the Senate. A similar House bill, introduced as the “Network Neutrality Act” before being offered as an amendment to the COPE bill, never escaped the Commerce Committee.

The way technology just happens to be, most broadband Internet service is provided to Americans via cable television (CATV) or DSL lines. The way US law just happens to be, the rights for CATV and DSL providers to serve their customers is delegated among individual localities and municipalities, with some statewide exceptions. So if an ISP wants to expand its territory, it currently must petition state and local governments individually, sometimes for licenses that cover areas no greater than a few square blocks. And that petition must be for television service, with broadband Internet being a piggy-backed feature that just goes along for the ride.

Up until last April, Congress had been considering a bill which would have reformed the Communications Act of 1934 to enable ISPs to seek national franchises to deploy broadband Internet service, piggy-backing on no other class of service at all. But at that time, Rep. Joe Barton (R – Texas), chairman of the House Energy and Commerce Committee, scrapped the bill on the table, and rushed in just a few hours’ time a draft of what would become the COPE bill. COPE treats broadband providers and cable providers as essentially the same entities, although amendments since added to the bill allow for “stand-alone broadband service” providers as a separate class.

The distinction in the language between the old and new bills goes to the heart of the net neutrality debates – the one before Congress, and the one being played out in the public arena. The bill COPE replaced would have placed strict limits on a national licensee’s ability to charge varying rates to customers for varying grades of service, mandating that all customers be charged equivalently for bandwidth consumption. Nothing even remotely close to that language appears in COPE, which is what makes the new bill attractive to potential national licensees.

The attraction is this: In order to make national licenses feasible in the first place, licensees such as Comcast and Cox Communications will need to build out broadband service capabilities to remote, rural regions. Without net neutrality provisions in place, licensees could effectively charge the larger content providers more for the use of bandwidth. In exchange, such providers – which would presumably include Yahoo, AOL, MSN, and Google – could be granted higher-tier or “fast lane” access, which would not be available for lower-grade bandwidth users.

In her speech introducing the amendment to committee on Monday, Sen. Snowe said, “No sooner than the non-discrimination principle was removed, executives of every major telephone and cable company announced intentions to charge Web sites for access for priority Internet delivery service. In other words, establish a class system for the Internet, with the ‘haves’ able to afford to pay this toll for their Web sites traveling the fast lane, and the ‘have-nots’ relegated to the breakdown lane. To make matters worse, there is nothing to guarantee that a network operator will offer space on the fast lane – at any price – to those who require it to survive.

“Removal of the Internet’s founding principle,” Snowe continued, “will quell innovation and centralize the fate of the Internet into the hands of the few. It will no longer be the World Wide Web, but rather a monopolistic and duopolistic-controlled network.”

The case against net neutrality

Opponents of net neutrality, including would-be national franchisees, argue that larger corporations that consume the lion’s share of the bandwidth, should be charged more for it, and can probably afford it. The alternative, they argue, would be for them to charge everyone equally, which means network upgrades on account of higher-bandwidth users would be funded in larger part by ordinary consumers. So the threat is that, if net neutrality were to pass, rates would rise.

At an industry conference at the end of last may, Comcast COO Stephen Burke was quoted by The Wall Street Journal as saying it would be “dumb” for Comcast to impose roadblocks or downgrade service to lower bandwidth, or lower priority, customers. It would be stupid, Burke said, for Comcast to do anything other than serve the Internet to customers as fast as it can. “Right now, we’re going as fast as we can to make our services good for our customers on any site they go to, and we have no intention of changing that,” said Burke. But when pressed on whether the company would reserve the right to impose a premium tier for fast lane service – as opposed to downgrading its existing service for lower bandwidths – Burke hedged, saying, “Today we provide as much bandwidth to everybody as we possibly can.”

National Cable and Telecommunications Association CEO Kyle McSlarrow – who has testified before congress on this issue many times – expressed his appreciation for the amendment’s defeat late yesterday, saying in a statement, “We are very pleased with the defeat of the amendment and will continue to oppose unnecessary government regulation of the pricing and packaging of video services, which most studies show will diminish diversity in programming and result in higher prices for fewer channels.”

In a speech earlier in May before the Broadband Policy Summit in Washington, Comcast VP and public policy counsel Joseph W. Waz, Jr., characterized proponents of net neutrality as string-pullers on behalf of heavy content users. “A handful of the world’s largest e-commerce companies boarded the legislative train,” Waz said, “and they’re trying to commandeer it to win regulatory leverage over phone companies, cable companies, and other competitive broadband providers…In the name of network neutrality, these e-commerce giants are looking to impose 100 percent of the costs of building advanced networks on end-user consumers, while also protecting their dominant position in their respective market segments.”

Waz claimed that the “net neutrality” movement was a new incarnation of the “open access” movement of the late 1990s, which ended up being supported in large part, he claimed, by ISPs such as AOL and Earthlink. These ISPs, said Waz, were basically trying to protect their dial-up lines from being made obsolete by cable-based innovators in the broadband field, and pretended to support third-party ISPs when they were actually stifling innovation to protect their own assets.

The argument can then be transposed in time about seven years, Waz implies, to the present day, where AT&T and others are arguing in favor of net neutrality, but are in fact acting on behalf of their own interests in the wake of CATV-driven innovation. It’s worth noting here again that the COPE bill refers to national Internet licensees as “cable operators,” prior to a section which lists exceptions.

Late yesterday, Sen. Ron Wyden (D – Oregon) registered on the floor of the Senate a “hold” on pending telecom legislation, including COPE, which effectively signals his intent to filibuster. COPE, Sen. Wyden said, “makes a number of major changes in the country’s telecommunications law but there is one provision that is nothing more than a license to discriminate. Without a clear policy preserving the neutrality of the Internet and without tough sanctions against those who would discriminate, the Internet will be forever changed for the worse.”

In a statement today, Sen. Snowe showed her dismay as well: “Net Neutrality and equality is one of the founding principles of the internet [sic],” she wrote. “It guarantees the unfettered, unfiltered, collection and dissemination of ideas and ideals. This legislation would not, as some have suggested, protect companies like Google, but rather ensures the next Google has an opportunity to succeed. Today’s decision does not serve the interest of the nation, the consumers of today, or the internet users of the future, and I am hopeful the mistake made here today can be undone before the full Senate.”