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House Passes COPE Act to Dismay of Consumer, Competitive Carrier Advocates
By Kelly M. Teal
Posted on: 06/08/2006

The House, just after 10 p.m. Eastern time on Wednesday, passed the Communications Opportunity, Promotion and Enhancement (COPE) Act without the net neutrality provisions advocates had worked hard to get representatives to adopt.

While Bell companies – which spent thousand, if not millions, of dollars in lobbying – hailed the vote, organizations representing companies that largely depend on Bell networks, said the lack of support for net neutrality handed the ILECs permission to raise prices and quash innovation.

“COMPTEL is greatly disappointed that the House today capitulated to the strong arm tactics of the Bell operating monopolies and passed legislation that advances the interests of the Bell companies at the expense of consumers and competition,” said Earl Comstock, president and CEO of COMPTEL, which represents competitive carriers, in a statement. “By failing to adopt pro-competitive safeguards, including net neutrality provisions, the House has set the stage for America to fall further behind Europe and Asia with respect to broadband services.”

Verizon Communications Inc. and BellSouth Corp. disagreed, focusing mostly on the provision that grants telcos the right to enter the cable TV market without having to obtain city-by-city franchises.

“The size of the bipartisan vote increases the momentum for a similar Senate bill,” said Peter Davidson, Verizon senior vice president for federal government relations. “The benefits of competition – more choice, better services and lower prices are now within reach this year. … We urge the Senate to act soon because every year reform is delayed costs Americans more than $8 billion in their cable bills.”

Davidson said the vote against net neutrality “suggests the Congress won’t go down the road of legislating solutions to problems that don’t exist.”

Meanwhile, BellSouth’s Herschel Abbott, vice president governmental affairs, said, thanks to video franchise legislation, telcos would more quickly be able to provide a competitive alternative to cable. As for net neutrality, he added, “let me again assure consumers that BellSouth will not block or degrade access to any legal content on the internet. Net neutrality is a phony issue and it ought to be laid to rest by today's vote."

‘Coping’

The COPE Act was introduced in late March by House Energy and Commerce Committee Chairman Joe Barton, R-Texas, and Rep. Bobby Rush, D-Ill., with the intent of replacing local and state video franchising processes with a nationwide one. Its limited attention to preserving net neutrality, however, drew criticism from competitive carrier advocates as well as consumers. The debate got hotter in early May when Sen. Ted Stevens, R-Alaska, introduced the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006. That bill – a sweeping attempt to rewrite key clauses of telecom law – addressed net neutrality only in that it calls on the FCC to oversee any abuses of the Internet. It remains a top contender for reform of the 1996 Telecom Act.

Now that COPE has passed the House, representatives and senators will have to reconcile their differences to see if they can create a final bill that President George W. Bush will sign.

The main issue at stake has been that of net neutrality. After Edward Whitacre, CEO of AT&T Inc., in November told Business Week, “They don’t have any fiber out there. They don’t have any wires. They don’t have anything. They use my lines for free – and that’s bull. For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for free is nuts!” the issue exploded. Various factions – ranging from Gun Owners of America and Afro-Netizen to MoveOn.org and Consumers Union – formed SavetheInternet.com, with the intent of making people aware of what it called “a multimillion-dollar lobbying effort by Internet providers like AT&T and Verizon to gut network neutrality, the Internet’s First Amendment.”

Throughout the winter and spring of 2006, industry associations tackled net neutrality and fair use on panels and in keynote speeches. What was most clear in all of the talk was that no two people could decide on a definition of net neutrality. Some industry professionals even said it was a nonissue. “There is no need to intervene here because there is no history of abuse,” BellSouth’s Jonathan Banks, vice president of executive and federal regulatory affairs, told attendees at the National Association of Regulatory Utility Commissioners (NARUC) in February. Advocates of net neutrality regulation continually rebutted such arguments. “As history has repeatedly demonstrated, it is only those who can discriminate who object to a requirement that they not do so,” COMPTEL’s President and CEO Earl Comstock said during a Senate Commerce Committee hearing on net neutrality, echoing similar statements made by COMPTEL staffers during various industry events.