Net neutrality fight returns to Senate

As leaders of the Senate Commerce Committee continue negotiations over how to deal with the controversial concept, committee members and witnesses from advocacy groups took turns airing their positions yet again.

The latest draft of the sweeping bill, called the Consumer's Choice and Broadband Deployment Act, numbers 151 pages and covers everything from the digital television switch to city-run broadband networks to changes in the procedure by which video services operators seek franchises to serve new areas.

Arguably the most contentious portion has turned out to be Net neutrality, the idea that network operators should not be allowed to prioritize Internet content and services that travel across their pipes or to make deals with companies seeking special treatment.

Some Democrats and at least one Republican in the Senate have backed detailed regulations barring such practices, while several others, primarily from the Republican side, have voiced staunch opposition. The ongoing dispute clearly had some politicians concerned about the chances that the broader bill will pass.

"It would be a tragedy for our nation if Net neutrality is the basis for which this entire bill is taken down, and that's a very real possibility, the way I see this bill shaping up," said Sen. Gordon Smith, an Oregon Republican.

A committee vote on the final version of the bill is expected to occur June 22, with the last round of revisions expected to be released as early as Wednesday.

Committee Chairman Ted Stevens, an Alaska Republican, said he was confident that the politicians would reach a compromise but that they should favor a light regulatory touch. "We ought to talk about the FCC (Federal Communications Commission) having the right to deal with Net neutrality issues that affect consumers," he said, echoing remarks made last week. "When it comes to interfering with the marketplace in terms of major investments of capital, I think we should step away."

Stevens has been facing pressure from Democrats including Sen. Daniel Inouye, the committee's co-chairman, who said again Tuesday that the existing bill doesn't spell out meaningful enough enforcement powers to "prevent unfair discrimination by network operators." The current language directs the FCC to watch out for incidents that could be considered violations of Net neutrality and to report to Congress on its findings.

"What would be the impact with no legislation?" Inouye asked Ben Scott, policy director for the liberal advocacy group Free Press, who testified on a panel before the politicians.

"A structural change in the Internet which would, for better or for worse, change the way the Internet works," Scott replied, adding that nondiscrimination has been a "cornerstone" of Internet policy since the technology's birth.

Free Press is one of a wide array of consumer groups that have joined Internet companies like Google, Microsoft and Amazon.com in lobbying Congress to write Net neutrality requirements into law--though with little success so far. Major network operators from the telecommunications and cable industries, the wireless and hardware sectors, and Wall Street interests have mobilized against that idea, saying new regulations are premature and could stifle investment in new infrastructure.

"There are existing procedures at the FCC and in antitrust law to deal with anticompetitive issues," said John Rutledge, a consultant for the U.S. Chamber of Commerce, a pro-business lobbying organization. "I think the idea of trying to stop change or control prices is a (recipe) for disaster."

Sen. Byron Dorgan scoffed at that notion, saying attempts at enforcing antitrust laws "make glaciers look like they're speeding." The North Dakota Democrat joined Maine Republican Olympia Snowe, Committee Co-Chairman Inouye, and five other Democrats in proposing a bill last month that calls for detailed prohibitions against blocking, impairing, degrading and prioritizing Internet content.

A nearly identical Democratic-sponsored amendment met with definitive rejection by the House of Representatives last week. The broader communications bill that was approved authorizes the FCC to police violations of its broadband use principles (click here for PDF) and to levy fines if appropriate, but it bars the regulators from making new rules.

Sen. John Sununu, a New Hampshire Republican, said the House bill "steers in the right direction" and urged his colleagues against taking the approach favored by Democrats, which he said amounts to burdensome "Internet regulations."

"A heavy regulatory hand kills incentives to build products and develop new technologies, and that ultimately will be something that consumers feel and that they will respond to in a very negative way," he said, noting that the editorial pages of both The Washington Post and The Wall Street Journal--typically not aligned in their views--have discouraged imposition of new regulations now.

South Carolina Republican Jim DeMint, a vocal free-market proponent, likened new federal Net neutrality mandates to "the government telling retailers how to do their business"--that is, what to stock on their shelves and which merchandise to give more prominent placement. "We actually want some discrimination today to force better products and better prices," he argued, warning that new regulations would lead to "commercial suicide."