Congress takes a dump on network neutrality - What will the Senate do?
My thoughts are that this bill is simply a case of the combined long haul/RBOC's trying to recoup the cost of network buildout...really if you think about it, we are running on the corpses of the Global Crossing, MCI, AT&T, L3 etc's of the world....Every player that leveraged the hell out of their balance sheets to lay out fiber have essentially gone bankrupt or been acquired. There still "dark fiber" that has yet to be lit underground that are static assets for holding companies out there. Google has been slowly acquiring it over the past couple of years and I'm sure Yahoo/MSN has as well. Its a fiber layer's graveyard out there, but it has been for the overall good, since we all know that the content providers have innovated the shit on top of it, so there is certainly cause for some sympathy for the Verizons and Bellsouths of the world.
Of course there is the argument that network providers are the "gatekeepers," and by virtue control the quality of services such as VoIP and IPTV, and I am in agreement with this. However, a much better alternative to network neutrality is unbundling of local access which is what is being done in Europe. By unbundling local access and in effect giving the broadband provider the ability to determine speed and service. You no longer have the issue of network providers infringing on the ISPs ability to provide a certain level of quality/speed because the ISP (internet service provider) would rent this line (at a wholesale rate) and determine by itself the type of service it is willing to provide and charge you for. If ISPs wanted to provide advanced services, they themselves would have to install equipment at the local exchange. In my opinion, unbundling is a much better alternative to network neutrality as it fosters investment and only allows serious players to enter the market.
But we all know network neutrality not only has implications on the content providers...it has implications on the internet commerce as an engine of growth for the entire economy since it is so integrated into the fabric of modern commerce. It would definitely change the economics of doing business on the internet, not just for the Web 2.0 players such as Google, Yahoo, MSN, and Amazon, but also major brick and mortar guys who do a surprising amoung of business on the web such as Target, Walmart, Fedex, etc etc. Having seen the capex of alot these folks and it clearly would have real economic impact.
Any idea what the prospects of the bill is in the Senate? I'd imagine if there is any lobbying effort toward thwarting the bill it would likely be focused there.
June 9, 2006
House K.O.'s Net Neutrality
By Roy Mark
WASHINGTON -- Legislative language to make the controversial concept of network neutrality the law of the land failed in the U.S. House of Representatives late Thursday night.
In an amendment to an otherwise widely supported telecom reform act, lawmakers rejected by a vote of 269-152 a measure to require broadband providers such as AT&T and Comcast to treat all Internet traffic in a nondiscriminatory price manner.
Under the proposal by Rep. Ed Markey (D-Mass.), the telecom and cable giants that control virtually every broadband connection in the United States would be unable to implement their proposed business models to create a two-tiered Internet based on bandwidth consumption.
In a roll call vote, 58 Democrats joined 211 Republicans in turning back the measure. Only 11 Republicans joined the 140 Democrats voting for the amendment.
The overall bill, known as the Communications Opportunity, Promotion, and Enhancement Act (COPE, H.R. 5252), would permit national video franchising for Internet Protocol television (IPTV) providers in hopes of spurring competition in the pay television market.
Unlike the Markey statutory language approach, under the COPE Act the Federal Communications Commission (FCC) on a case-by-case basis would deal with allegations of network neutrality violations.
The legislation would also prohibit the FCC from creating additional network neutrality rules beyond the non-binding principles adopted by the agency last year.
"The bill... seeks to strike the right balance between ensuring that the public Internet remains an open, vibrant marketplace and ensuring that Congress does not hand the FCC a blank check to regulate Internet services," House Energy and Commerce Chairman Joe Barton (R-Tex.), author of the bill, said in introducing the legislation.
"We do need the FCC to stop the cheats without killing honest creativity. We don't need anybody to be the first Secretary of the Internet."
In addition, the legislation mandates Voice over IP ( define) providers make E911 services available to consumers and allows state and local governments the option to provide their own telecommunications, cable or information services.
The bill passed on a 321-111 vote, with 215 Republicans and 106 Democrats voting in the affirmative.
Both Verizon and AT&T have combined to invest billions of dollars into building fiber optic IP networks capable of delivering a competitive product to cable systems and millions more to lobby Congress to break from the historical treatment of Internet traffic by carriers.
Currently, all traffic is prioritized, treated and priced the same from the smallest of Web sites to Internet giants such as Microsoft, Google, Yahoo and Amazon.
Under the cable and telco scheme, fees will be imposed for heavy users.
"[The] overwhelming vote brings our nation one critical step closer to TV freedom, where consumers enjoy the benefits of real choice and competition for their video service," Walter McCormick, president and CEO of the U.S. Telecom Association, said in a statement.
"Consumers win when companies are free to invest and compete head-to-head by offering innovative products at attractive prices."
The defeat of the Markey amendment, while not unexpected, still caught technology executives flat-footed.
On Wednesday, House and Energy and Commerce Chairman Joe Barton (R-Tex.), author of the COPE Act, said he saw no way the bill could be voted on before Friday. He did nothing during the day Thursday to discourage that notion.
But while TechNet, the influential nationwide political network of IT CEOs and senior executives, lunched at the National Press Club and enjoyed afternoon meetings with top White House executives and FCC Chairman Kevin Martin, Barton lined up supporters and the House Republican leadership punched through a surprise Thursday night vote.
With TechNet members winging their way home, lawmakers closed the debate on the House side.
"Unfortunately, the House voted today to protect the big phone and cable companies at the expense of preserving an open Internet," the It's Our Net Coalition said in a statement.
"We are not surprised at the outcome, but we are disappointed that the House has abandoned net neutrality."
The issue now moves to the U. S. Senate, where Commerce Committee Chairman Ted Stevens (R-Alaska) has scheduled a third hearing on his own telecom reform package Tuesday morning.
Like the House-approved bill, Stevens' proposal showcases national video franchising. It leaves issues of network neutrality to further FCC study.
Senators Olympia Snowe, a Maine Republican, and Democrat Byron Dorgan, of North Dakota, plan to push for network neutrality language similar to Markey's to be included in the legislation.
"We are confident that the Senate understands and appreciates the importance of net neutrality to the Internet and to the American economy and will take steps to preserve the Internet as a vibrant... open marketplace," It's Our Net stated.