‘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
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

“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.

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