Congressional Bill Could Change Internet's Balance of Power

Content Providers Would Be Charged for Higher-Speed Audience Access

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WASHINGTON (AdAge.com) -- Rejecting warnings that it was "selling out the public," a House committee today approved a bill that could open the door for phone and cable companies to play a potentially controlling role in the Internet's future.
The neutral 'pipe' of the Internet, which has given small entrepreneurs the same access as giant media companies, could be dramatically changed by a congressional move that would create a 'two-lane' digital highway.
The neutral 'pipe' of the Internet, which has given small entrepreneurs the same access as giant media companies, could be dramatically changed by a congressional move that would create a 'two-lane' digital highway.

Content providers
The House Energy and Commerce Committee, which is rewriting the nation's telecommunications legislation, essentially allowed service providers to charge not just consumers, but, for the first time, content providers for access to new higher-speed networks. That move will let some content providers use faster paths to consumers' desktops than rivals.

Under the legislation, service providers could, for example, give ABC but not NBC access to high-speed networks or award access to Verizon and not Vonage.

'Net neutrality'
Phone companies, cable companies and their associations have argued that Internet content providers that make money off the access should bear part of their costs. On the opposite side are consumer groups and some big Web players, among them Amazon, Google and Intel, that argue that the Net's growth was fueled by little companies innovating and successfully competing, a prospect that would be hampered if Congress didn't assure "net neutrality." They suggest consumers should pay extra for faster access, but should get every service when they pay more without discrimination.

U.S. Rep. Ed Markey, D-Mass., who warned that discrimination "will stifle the ambitions of entrepreneurs all over the world," today tried to add language to the bill that would ban discrimination among content providers. The legislation is expected to pass the House this year. Mr. Markey's move was rejected by the panel on a 22 to 34 vote.

A 'profound change'
U.S. Rep. Anna Eshoo, D-Calif., called the move "the most profound change in the Internet" in history. "This is not about Google or Yahoo, the guys that have made it," she said. "It's about the guys who would be Google. You know why they won … because there was open competition and they came up with the better mousetrap." She warned that the change could impact the ability of the better mousetrap to win in the future.

'Two-lane Internet'
U.S. Rep. Rick Boucher, D-Va., said the Internet is defined by its openness. "The handwriting is written on the wall," he said. "It will essentially create a two-lane Internet -- the telephone-company content and the content that pays [in one lane] and the slower lane. It will not be possible to compete and [look out for] the effect that latency will have on innovation. … The company starting in the garage will have a hard time competing."

Committee Chairman Joe Barton, R-Texas, and others argued that the legislation includes some limits and that there is little evidence that allowing companies to charge for access will impact competition. They said it may instead give them incentives to expand their high-speed networks.

"I don't think all the draconian things will happen if we don't adopt this amendment. If they spend billions of dollars to put these networks in place, they have a right to charge," Mr. Barton said.

'Spreading the cost'
"This is some way of spreading out the cost," said Rep. Charles Gonzalez, D-Texas. "If you use it more often is it fair to treat you the same as that little startup?"

Consumer groups called the vote a "sellout" and promised to continue fighting to bolster public pressure against the move.
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