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Special To Insider Update

Democratic Amendments Fail To Fly
In House Telecom Markup Session

By Drew Clark and David Hatch
(Wednesday, April 26)

Major Democratic-sponsored amendments were defeated Wednesday during a House Energy and Commerce Committee session convened to vote on major telecommunications legislation.

The panel frequently split along party lines while considering legislation drafted by Energy and Commerce Chairman Joe Barton, R-Texas -- with almost all panel Democrats unsuccessfully supporting language aimed at strengthening anti-discrimination provisions and reinforcing the role that municipalities play in approving video services in their areas.

Meanwhile, in the day’s most controversial development, the panel rejected, on a largely partisan 34-22 vote, a network neutrality amendment offered by Rep. Edward Markey, D-Mass., that Democrats touted as a last-chance opportunity to prevent the Internet from being dominated by companies such as AT&T, Verizon, and Time Warner.

The defeat is a significant setback to Google, Yahoo, Microsoft, Amazon and other Internet titans that lobbied heavily for the language.

But Barton contended that network neutrality only emerged as an issue a few months ago and that the bill already addresses possible anti-competitive behavior.

The underlying bill contains provisions on net neutrality -- the concept of barring broadband operators from controlling the content flowing over their pipes. But critics say the safeguards are too weak.

The legislation would allow the regional Bell operating companies and others to obtain authority to offer pay-television services on a nationwide basis. That approach would change the current system under which Bell firms and cable TV operators gain the right to offer service based on state or municipal approvals.

Notwithstanding the partisan divisions on many key amendments, the overall legislation was approved by a lopsided 41-12 vote after a marathon, day-long markup reminiscent of the lobbying frenzy associated with the Telecommunications Act of 1996 -- which the pending measure would overhaul.

The margin of victory mirrored the 27-4 approval of the bill by the Energy and Commerce Telecommunications and the Internet Subcommittee just two weeks ago.

On final passage, 15 Democrats -- including Rep. Bobby Rush of Illiinois, a cosponsor of the bill -- voted in the affirmative, with eleven Democrats opposed. One Republican, One Republican, Rep. Heather Wilson of New Mexico, voted no.

The two largest Bell companies -- AT&T and Verizon Communications, both of which would directly benefit from the relaxed franchise requirements in the legislation -- immediately issued statements applauding the action.
The rejected amendments included language that would have required Bell companies to expand their service to a majority of customers within their chosen areas -- so-called buildout provisions.

Republican lawmakers also sank two amendments designed to strengthen anti-discrimination language in the current draft and three amendments designed to shore up the authority of cities over video franchising.

The underlying bill does not include buildout requirements. Barton has contended that such would hamper entry into the video marketplace by the Bell companies and others. does not include buildout requirements. Barton has contended that such would hamper entry into the video marketplace by the Bell companies and others.

The buildout language was a sticking point in recent negotiations between Barton and Rep. John Dingell of Michigan, the panel's ranking Democrat. Dingell unsuccessfully sought a buildout when the Telecommunications and the Internet Subcommittee voted on the legislation last month.

During Wednesday's full committee markup, Rep. Hilda Solis, D-Calif., introduced a similar amendment along with Dingell and Markey. It lost on a 33-23 vote, with four Democrats -- Reps. Rick Boucher of Virginia, Charles Gonzales of Texas, Jay Inslee of Washington and Bart Stupak of Michigan -- voting against it.

In the draft bill, Barton included language barring income-related discrimination in the provision of pay-television service. The Barton draft also would impose fines of up to $500,000 a day for proven violations of discriminatory intent.

But most of the Democrats on the panel criticized the language as inadequate to ensure the availability of pay-television service provided by the Bells within both wealthy and low-income neighborhoods.

That view is supported by many in the cable industry, along with local governmental officials. At present, cable firms must offer their services within entire local franchise areas.

However, in an amendment offered at the outset of Wednesday's session, Barton strengthened the anti-discrimination provisions in a way that could impose greater restrictions on Bell companies.

According to the revised language, new video entrants' national franchises would be defined by the cable operators' existing local franchise areas. The newcomers would not have to offer service within their entire areas -- but would have to abide by anti-discrimination rules within those regions.

For example, if a Bell company in Washington, D.C. offered telephone service in low-income as well as a high-income neighborhods, it would have to offer video services in the poorer area if it offered them in the wealthier section.

Other amendments defeated Wednesday would have expanded anti-discrimination compliance to race as well as income. and would have declared that companies could be in violation of anti-discrimination provisions even without intending to do so..

The committee also rejected amendments that would have retained greater authority for municipalities in disputes over video services.

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