September 09, 2006
Saturday

The network neutrality debate galvanized Internet companies and users for much of the year, but quieted down over the summer while Congress was in recess. But even though lawmakers have returned to Capitol Hill, don't expect the issue to be settled soon. Political observers say pre-election posturing has stalled this issue that pits Internet companies and activists against telephone and cable companies.

But while net neutrality may be in a legislative coma, its Internet supporters say it's not dead. Meanwhile, their telecom industry opponents are looking to the states, particularly California, for legislative help they have so far not gotten from Congress.

In a nutshell, the issue breaks down like this. Advocates of what's known as net neutrality want Congress to order the Federal Communications Commission to write rules to preserve the status quo on broadband Internet pricing. Basically, they believe all electronic traffic should be given the same delivery treatment at the same price as it has since the start of the Internet.

On the other side, Verizon Communications, AT&T Inc. and their allies in the cable and networking industries say that competition between broadband providers - backed up by the threat of FCC action if pricing is unfair - is all the policing that the Internet needs.

Although both sides continue to press lawmakers to act, most observers say Congress is too preoccupied with pre-election politics to tackle this complex issue before Sept. 29, when senators are expected to recess.

"Conventional wisdom is that the issue will simply sit there," said Christopher Putala, executive vice president with EarthLink, a pro-neutrality Internet company.

Although sources on the other side privately expressed the same opinion, Verizon spokesman David Fish said Congress should pass a telecommunications bill without so-called neutrality provisions.

The dispute over Internet pricing, complicated enough in its own right, is joined to a separate issue - injecting more competition into the paid television market by giving phone companies what amounts to a nationwide franchise to deliver shows through their wires.

The bill that is stalled in Congress, therefore, is really designed to promote what proponents call video choice. It would pave the way for phone companies to compete with cable and satellite vendors by using their wire networks to pipe TV into homes.

The net neutrality proposals being pushed by the Internet coalition are contained in an amendment to that video choice bill.

In early June, the House of Representatives approved the video choice measure by a 3-to-1 margin - after voting 269-152 to reject the Internet coalition's neutrality amendment.

When the Senate took up its version of the House bill at the end of June, the 22-member Senate Commerce Committee deadlocked 11-11 on the net neutrality amendment - which effectively kept that tough regulatory language out of the bill. It then voted 15-7 to send video choice and some related issues to the Senate floor.

But Sen. Ron Wyden, D-Ore., put a hold on that bill - a maneuver that effectively requires 60 votes to lift - and Congress went into its summer recess leaving these twin issues of video choice and net neutrality awaiting a vote before the full Senate.

Now, most political insiders say it doesn't look like proponents of video choice have the 60 votes they need to lift Wyden's hold - and a Wyden staffer said he has no intention of lifting it unless he gets tough net neutrality language - making it unlikely that the full Senate will take any action soon.

And that leaves the net neutrality amendment hinged to a video choice bill that is in limbo.

As part of the behind-the-scenes jockeying, telecom partisans are hinting that they can let federal video choice die - thus killing the net neutrality amendment - because several states are starting to give them what they want, which is quick access to the paid TV market.

They are circulating research done by the Stifel Nicolaus investment firm, which noted that California lawmakers recently passed AB2987. It would give AT&T and Verizon a statewide right to deliver video.

But Stifel Nicolaus analyst David Kaut said that if California Gov. Arnold Schwarzenegger signs the legislation it would particularly benefit AT&T, which has about one-third of its current phone lines in California. He said a handful of other states including Texas and New Jersey have enacted statewide video choice laws. This puts telecom firms under less pressure to accept tough net neutrality language in return for a national video choice bill.

But members of the Internet coalition say even if the legislation dies in the Senate - killing net neutrality in its current form - the issue won't go away.

"We don't believe this will prevent the U.S. Congress from working to insure open access to the Internet," said Alan Davidson, a Washington policy counsel for Google, one of the Web powers behind the net neutrality side.

In a teleconference this week, activists in the Save the Internet coalition suggested that time is on their side, as evidenced by the grassroots blitz they recently organized in which net neutrality supporters lobbied 21 senators in 25 cities.

"This is a classic case of organized money versus organized people," said Ben Scott, policy director for Free Press, a nonprofit group that is part of the coalition. "They need to do it quick ... organized people gain the advantage over time."

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