RealTime IT News

'Clear And Present Danger' For Telecom Reform Bill

WASHINGTON -- Big tech urged Congress today to stop telephone and cable operators from extending their market power over broadband access to broadband content.

Speaking at the first hearing on the House Republicans' new telecom reform effort, Paul Misener, Amazon's vice president for Global Public Policy, told lawmakers the lack of an effective network neutrality clause in the legislation represents a "clear and present danger" to Internet content choice.

"The phone and cable companies are going to fundamentally alter the Internet in America unless Congress acts to stop them," Misener testified. "They have the market power, technical means and regulatory permission to control American consumers' access to broadband Internet content, and they've announced their plans to do so."

Misener said eBay, Google, Microsoft, Yahoo and IAC/Interactive all share Amazon's concerns.

The Communications Opportunity, Promotion and Enhancement Act of 2006, introduced only 48 hours before Thursday morning's hearing, primarily focuses on promoting competition in the pay television market but contains a clause calling for the Federal Communications' Commission (FCC) to enforce its current broadband policy.

That policy, which has no force of law, states that consumers are entitled to access the lawful Internet content of their choice, run applications and services of their choice and plug in and run legal devices of their choice.

In addition to having no legal authority to back up its broadband policy, the new legislation aims to strip the FCC of making any rules regarding network neutrality.

"We fear a circumstance in which broadband network operators, among whom consumers have no real choice, are permitted to prefer certain content and thereby limit consumer access to other content," Misener said.

As they did Monday when they introduced the legislation, House Energy and Commerce Chairman Joe Barton (R-Texas) and Telecommunications and the Internet Subcommittee Chairman Fred Upton (R-Mich.) failed to mention network neutrality in their opening remarks praising the new bill.

Democrats had no such reluctance.

"The proposed legislation contains some curious language regarding the issue of network neutrality," "What would be the effect of allowing essentially private taxation of the Internet," Rep. John Dingell (D-Mich.), the ranking Democrat on the Energy and Commerce Committee, asked. "Would the digital economy continue to thrive? Would consumer expectations be met?"

Democrat Ed Markey of Massachusetts said rules ensuring network neutrality are indispensable.

"I understand that there are those who argue that we should rely on mere network neutrality 'principles,' or an imprecisely worded FCC policy statement, rather than legally enforceable rules. Others will advise us to take a wait-and-see approach."

Markey said the GOP bill "effectively condones" online discrimination.

"We know from public statements from several industry executives that the owners of the broadband wires into our homes would like to start charging fees to Internet content providers," Markey said.

"In other words, they want to artificially constrain the supply of Internet-based content and services to high-bandwidth consumers."

Markey added, "This represents nothing more than the imposition of a broadband bottleneck tax on electronic commerce."

Walter McCormack, president and CEO of the U.S. Telecom Association, the primary trade group representing telephone companies, again stressed that his members have pledged to not block, impair or degrade consumer access to the Internet, effectively ducking the issue of charging extra fees to content providers.

"We believe that legislation in this area is premature. Any new grants of new regulatory or statutory ambiguities could chill innovation and investment," he said.

Kyle McSlarrow, president and CEO of the National Cable and Telecommunications Association, urged the committee members to leave the issue of network neutrality to the marketplace.

"With bandwidth usage growing at a rapid pace, continued investment will be needed to keep broadband services robust," McSlarrow said. "If broadband investors are to continue to makes these investments ... broadband providers need to have the continuing flexibility to develop new business models and pricing plans."

A network neutrality law would, McSlarrow said, "stifle that flexibility and discourage capital investment.

Next week, the Republicans plan to vote on the bill in a subcommittee and get the legislation before the full committee in a matter of weeks.