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from: San Francisco Chronicle

Net neutrality amendment dies
Telecommunications bill goes to Senate without provision sought by Web firms
Tom Abate, Chronicle Staff Writer
Thursday, June 29, 2006

In a dramatic tie vote Wednesday, a U.S. Senate committee rejected an amendment that would have preserved the status quo of equal pricing for all Internet traffic, an issue known as network neutrality.

Although the net neutrality amendment did not prevail in the committee, the issue could be revived. The amendment that failed was part of a larger telecommunications bill that passed the committee and now heads to the full Senate. A similar amendment could be reintroduced into the larger bill before that vote.

It wasn't immediately clear when the telecommunications bill will come to a floor vote. Moments after the commerce committee's vote, Sen. Ron Wyden, D-Ore., used a parliamentary maneuver called a "hold" that could effectively prevent any vote on the bill "until it includes strong net neutrality provisions," he said in a statement.

The debate over net neutrality has become a civil war of sorts in the technology industry.

Web content companies, high-tech firms and grassroots groups had hoped to persuade lawmakers to order the Federal Communications Commission to write regulations that would prevent phone and cable companies from levying additional charges on content providers to assure speedier delivery of Internet traffic.

Phone and cable companies have lobbied for a free hand in setting fees for preferred delivery, saying it will cost billions to beef up their Internet wires and, unless they can charge the content companies, consumers will foot the bill.

After the 22-member committee deadlocked on the amendment, senators voted 15-7 in favor of the telecommunications overhaul.

The key provision of the full bill would clear legal hurdles so that telephone companies can deliver digital video to compete with cable television. A similar telecom bill recently passed the House -- also minus a net neutrality amendment -- and with a final showdown looming in the Senate, both sides cast Wednesday's committee vote in the most favorable light.

Net neutrality advocates vowed to fight on.

"The tie was a procedural loss and a huge political win at the same time,'' said Adam Green, spokesman for MoveOn.org. "Every day and every week ... members of Congress hear from their constituents and momentum moves in favor of net neutrality.''

A spokesman for Verizon, which led the coalition of phone and cable companies backing the legislation, said the 15-7 vote on the final measure shows that legislators are more concerned about unleashing competition than they are about how network operators price Internet traffic.

"Net neutrality is clearly divisive and ill-defined, and many senators do not want it to stand in the way of consumer video choice,'' said Verizon spokesman David Fish.

The committee vote reflected the increasingly partisan nature of the net neutrality debate. All 10 Democrats voted in favor of the amendment, which was co-sponsored by Sen. Olympia Snowe, R-Maine -- the sole GOP member to side with the Internet coalition. Snowe's office said she will consider reintroducing her amendment if the bill comes to the Senate floor as written.

Supporters of the telecom reform bill say House and Senate members have been wise to avoid the sort of regulations sought by net neutrality advocates because the bill provides a greater consumer benefit by granting phone companies what amounts to a national franchise to deliver TV, something that should drive down cable bills.

"Consumers can breathe a sigh of relief that the Internet has escaped regulation,'' said Adam Thierer of the Progress & Freedom Foundation, a free-market think tank that has supported the network owners.

Kyle McSlarrow, president of the National Cable and Telecommunications Association, noted that the overall bill will make it easier for cable companies to offer telephone service. "We also applaud the committee's rejection of unnecessary regulation of the Internet,'' McSlarrow said.

But members of the Internet coalition argue that allowing preferential pricing would fundamentally alter the wide open character of the network. They say the longer the issue is in the public eye, the better their chances of preserving the status quo.

"Average citizens are just starting to break through the misinformation and lies being peddled by the big phone and cable companies who want to erect tollbooths on the Internet,'' said Ben Scott, policy director for the nonprofit Free Press.

"The tie vote on net neutrality clearly signals that the Senate is going to have to strike a balance that is more in favor" of equal pricing, said Chris Putala, public policy director for Earthlink, the Internet service provider.

Network giant Cisco Systems has been one of the few Silicon Valley companies to support the phone and cable companies.

"We're pleased that the Senate Commerce Committee chose not to regulate the Internet," said Cisco vice president Laura Ipsen.

Tom Conrad, chief technology officer for Pandora, an Oakland startup that delivers ad-supported radio over the Internet, said that while he wants the status quo on pricing preserved, he isn't yet "losing sleep" over the prospect of a change because the situation remains fluid.

"This is going to be a long, drawn out debate," he said, "and the end of the story hasn't been written.''