Features

Net Neutrality Amendment Dies

By Priya George

The debate over network neutrality has become a civil war of sorts in the technology industry. "The future Sergey Brins and the future Marc Andreessens of Netscape and Google are going to have to pay taxes to broadband providers,” said Ed Markey, the Massachusetts Democrat behind the Net Neutrality amendment. The U.S. Senate committee rejected an amendment that would have preserved the status quo of equal pricing for all Internet traffic, an issue known as network neutrality. This vote will "change the Internet for the rest of eternity," he warned. The US House of Representatives voted to kill an amendment to the Communications Act of 1934 that would have ensured the continued fair treatment of Internet traffic. An alternative amendment was passed which expressly bans the Federal Communications Commission (FCC) from creating rules to enforce net neutrality. This leaves ISPs and carriers free to create tiered services for Internet access.

Senators Olympia Snowe and Byron Dorgan proposed an amendment to the bill to "ensure fair treatment of all Internet content." The amendment incorporated a non-discriminatory principle: "to promote broadband deployment, and presence and promote the open and interconnected nature of the Internet, a broadband service provider shall not discriminate Internet traffic based on source, ownership, or destination of such traffic as part of any publicly available Internet offering." It was defeated in the Committee with a tie vote of 11-to-11.

In other words, if the search giants and other major Internet content providers want to stop broadband network operators from charging different prices for different levels of access to their data pipes and from choosing which traffic they want to carry, then they themselves must be governed by the same rules, which means Google must take ads from Yahoo and Microsoft and vice versa.

The content providers, including Google, have reacted indignantly to the new amendment claiming that there is a monopoly held by Internet carriers, which creates huge barriers to entry for new players, while no such monopoly exists for content providers. Opponents of that view, however, say that large content providers have also created huge barriers to entry for new players. Google has about 50% search engine market share, while Yahoo and Microsoft have an additional 30% to 40% between them. The amendment proposed by Representative Gonzales threatens to derail the intent of the original proposed Net Neutrality legislation and raise the level of the debate to what monopolization of the Internet actually means. While the largest content providers argue that the only monopoly that exists is at the physical carriage level, others believe that the ability of just one content aggregator to direct 50% of Internet traffic is a budding monopoly in its own right.

The concept of network neutrality, which means that all Internet sites must be treated equally, has drawn a list of high-profile backers, from actress Alyssa Milano to Vint Cerf, one of the technical pioneers of the Internet. It has also led to a political rift between big Internet companies such as Google and Yahoo that back it and telecom companies that oppose what they view as 'onerous new federal regulations'.

While the debate over net neutrality started over whether broadband providers could block certain web sites, it has moved on to whether they should be permitted to create a 'fast lane' that could be reserved for video or other specialized content. Prohibition is "not a road we want to go down, but that's what the Markey amendment would do," said Marsha Blackburn, a Tennessee Republican.

Web content companies, high-tech firms, and grassroots groups had hoped to persuade lawmakers to order the FCC to write regulations that would prevent phone and cable companies from levying additional charges on content providers to assure speedier delivery of Internet traffic. On the other hand, phone and cable companies have lobbied for a free hand in setting fees for preferred delivery, saying it will cost billions to beef up their Internet wires and, unless they can charge the content companies, consumers will bear the bill.

After the 22-member committee deadlocked on the amendment, senators voted 15-7 in favor of the telecommunications overhaul. The key provision of the full bill would clear legal hurdles so that telephone companies can deliver digital video to compete with cable television. "Net neutrality is clearly divisive and ill-defined, and many senators do not want it to stand in the way of consumer video choice,'' said Verizon spokesman David Fish.

Supporters of the telecom reform bill say House and Senate members have been wise to avoid the sort of regulations sought by net neutrality advocates because the bill provides a greater consumer benefit by granting phone companies what amounts to a national franchise to deliver TV, which is something that should drive down cable bills.

"Consumers can breathe a sigh of relief that the Internet has escaped regulation,'' said Adam Thierer of the Progress & Freedom Foundation. Kyle McSlarrow, president of the National Cable and Telecommunications Association, noted that the overall bill would make it easier for cable companies to offer telephone service. "We also applaud the committee's rejection of unnecessary regulation of the Internet,'' McSlarrow said.

But members of the Internet coalition argue that allowing preferential pricing would fundamentally alter the open character of the network. They say the longer the issue is in the public eye, the better their chances of preserving the status quo. "Average citizens are just starting to break through the misinformation and lies being peddled by the big phone and cable companies who want to erect tollbooths on the Internet,'' said Ben Scott, policy director for the nonprofit Free Press.

"The tie vote on net neutrality clearly signals that the Senate is going to have to strike a balance that is more in favor" of equal pricing, said Chris Putala, public policy director for Earthlink, the Internet service provider. Network giant Cisco Systems has been one of the few Silicon Valley companies to support the phone and cable companies. "We're pleased that the Senate Commerce Committee chose not to regulate the Internet," said Cisco vice president Laura Ipsen.

Tom Conrad, chief technology officer for Pandora, an Oakland startup that delivers ad-supported radio over the Internet, said that while he wants the status quo on pricing preserved, he isn't yet "losing sleep" over the prospect of a change because the situation remains fluid.

However, groups like Netcompetition.org, a forum funded by major players in the broadband industry, disagree with the pro-Net neutrality notion. They maintain that Net neutrality seeks to change the status quo by imposing regulations, and that it protects major e-commerce players like Microsoft, Google, and eBay from competition with the communications industry.

"E-commerce giants want to compete in communications but don't want communications companies to compete with them," said Scott Cleland, chairman of Netcompetition.org. "Net neutrality isn't neutral; it's a form of corporate welfare for dot-com billionaires. Net neutrality would kill the goose that laid the golden egg, and the goose that laid the golden egg is competition."


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