RealTime IT News

Juneau Something New 'Bout Net Neutrality?

NEW YORK -- Proponents of legislation codifying net neutrality rules may be able to hang their hats on an unlikely peg.

Senate Commerce Committee Chairman Ted Stevens (R-Alaska) is so keen to reform funding to the Universal Service Fund (USF) that he may be willing to insert language protecting net neutrality in order to get that done this year.

According to Thad Strom, an industry lobbyist, language codifying the basic principles of net neutrality could be presented to Congress by Stevens as early as next week.

"No one has shared the specific language with me, but I have reason to believe something of that sort could be coming along," he said.

Strom, vice president of congressional relations for Parry, Romani, Deconcini & Symms, which represents Verizon on Capitol Hill, argued that oversight of network neutrality should rest with the FCC, as proposed by an earlier draft of the Stevens bill.

"Is network neutrality an issue to be watched? Sure. But we shouldn't be regulating it at this point," he told internetnews.com.

Strom, who was in New York to address investors at a conference organized by Cowen and Company, said that three disparate issues -- USF reform, net neutrality and exemptions from video franchising -- are so intertwined politically as to make them almost inextricable.

"You'll get action on all three together or none at all," he said.

This is a far cry from the situation in April, when the Communications Opportunity, Promotion and Efficiency Act of 2006 (COPE), the lynchpin of the broadband carrier industry's IPTV strategy, seemed a shoe-in for enactment.

Now, proponents of net neutrality, which would prohibit carriers from discriminating against content providers through different pricing levels, have successfully linked their issue to COPE and USF reform.

And Strom was adamant that Senator Stevens will use his chairmanship to block any telecom reform legislation that doesn't include provisions for the USF.

"Nothing is going to get passed unless USF is radically reformed," he said.

The USF was created in 1983, at the time of the break-up of AT&T, to help extend telecommunications services to remote, rural and low-income areas by taxing interstate long-distance telephone carriers.

But contributions to that fund have fallen along with the revenues of traditional long-distance carriers.

Voice-over-IP (VoIP) providers are currently exempted, but, one way or another, will have to start contributing to this fund. The question is how much.

If no legislation is passed, the FCC will step in, perhaps as soon as June 15, and require companies like Vonage to pony up as much as 6 percent of their total revenues.

That "would have a tremendous material impact on VoIP providers," said Chris McKee, vice president and assistant general counsel at broadband provider Covad Communications.

Net neutrality has complicated matters, as Congressmen from both sides of the aisle have proposed language that is unacceptable to the broadband carrier industry.

Ordinarily, Verizon, AT&T and others in the industry would be expected to fight such legislation with everything they've got.

But the importance of the calendar, political and otherwise, cannot be overstated in their calculations, and explains why the carrier lobby may be more willing than usual to compromise.

Indeed, there are fewer than 30 business days left for Congress to act this year, and one or both houses of Congress may be changing hands after the November elections.

If the carriers have any hopes of developing their IPTV strategy this year, they need COPE to get enacted, and the only way that can happen is if they compromise on network neutrality.

McKee told internetnews.com that language which protects the principles of network neutrality without getting too specific about details should be acceptable to the industry.

Compromise is likely, he said, because "network neutrality doesn't seem to be taking money out of anyone's pocket."

Even Strom conceded that, "as the sand runs out [on the legislative Session], compromises could be reached if they're not too detrimental."

Thomas Watts, managing director at Cowen and Company, argued that compromise is in the interests of the broadband carrier industry.

"If I were Verizon, I would be in a deal-making mood," he said.