Net neutrality missing from sweeping telecom bill

Draft represents the most significant rewrite of laws dealing with video, satellite and broadband communications in 10 years.

The U.S. Senate took the first serious step on Monday toward rewriting the nation's telecommunications laws, a move that raises politically sensitive questions about digital copyright and Net neutrality and that could take years to complete.

Ted Stevens, chairman of the Senate Commerce Committee, released a 135-page draft bill (click here for PDF) that represents the most sweeping rewrite in a decade of laws dealing with video, satellite and broadband communications.

Stevens said in a statement that the legislation grew out of more than a dozen hearings and drew on proposals from other senators as well. "It attempts to strike a balance between competing industries, consumer groups and local government," the Alaska Republican said.

Absent from the legislation are any regulations related to "Net neutrality," also known as network neutrality, that companies such as, Google, Yahoo, Intel and Microsoft have been lobbying for during the past few months. Instead of handing the Federal Communications Commission extensive powers to police violations--an idea defeated in a House of Representatives committee vote last week--the FCC would merely be required to prepare annual reports on any problems.

Included in the massive proposal is, however, one requirement sure to please the recording industry: authorization for the FCC to start the process of outlawing digital over-the-air radio and digital satellite receivers sold today that permit users to record broadcasts. Those would be supplanted with receivers that will treat as copy-protected anything with an "audio broadcast flag" in the future.

Jonathan Lamy, a spokesman for the Recording Industry Association of America, called it "a necessary and appropriate focus on an issue critical to record labels, songwriters, publishers, artists and many others in the music community." The RIAA is worried about newer receivers, such as the Sirius S50, that it says let Americans assemble a personal music library without paying for it.

Telecom reform or not?

Here are some parts of Sen. Ted Stevens' proposal to rewrite U.S. telecommunications laws:

Audio broadcast flag
Devices would be banned based on "consensus" of FCC-created review board, which has a year to do this.

Broadband taxes
Taxes would be imposed on VoIP and broadband providers.

Child pornography
FCC would be asked to come up with rules banning child porn on local video services.

Municipal broadband
Cities and states could set up their own networks, with some restrictions.

Net neutrality
No new powers for FCC; it would publish a report instead.

Video broadcast flag
Some over-the-air receivers likely would be banned within six months, but regulations allow some fair use.

VoIP providers
Companies offering Internet phone services would increasingly be regulated and taxed as traditional phone companies.

Stevens did seem, however, to bow to pressure from technology groups and the consumer electronics industry when devising related regulations to copy-protect digital video. His legislation would order the FCC to ban digital TV tuners, such as ElGato's EyeTV 500, that let users record over-the-air broadcasts and save them without copy protection.

But the bill does say that Americans should enjoy the right to share recorded broadcast TV over their home networks, make "short excerpts" available over the Internet, and that news programming generally should not be flagged. Those sections are likely to draw opposition from the Motion Picture Association of America and its allies; one source close to Hollywood told CNET on Monday that "the movie industry has real problems with the broadcast flag language as it appears in the bill."

A bill's long journey
If history is any indication, it's unlikely that Stevens' proposal will be enacted until next year at the earliest.

Because 2006 is an election year, work on Capitol Hill is likely to drop off as November approaches, and the House leadership may not see eye-to-eye with Stevens. For instance, at a House hearing in November, some politicians suggested that it was premature to enshrine a broadcast flag requirement in federal law.

Enacting the 1996 Telecommunications Act--the last major law in this area--was anything but a rapid process. Then-Sen. James Exon, a Nebraska Democrat, first introduced an amendment that would become the Communications Decency Act in July 1994.

"These measures will help assure that the information superhighway does not turn into a red light district," Exon said at the time. "It will help protect children from being exposed to obscene, lewd, or indecent messages."

Exon later glued his proposal onto the Telecommunications Act, which was introduced in the Senate in March 1995 and sponsored by Stevens' predecessor, Democratic Sen. Larry Pressler. But negotiations between the House and Senate dragged on for months, and President Clinton didn't sign the measure until February 1996.

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