House Subcommittee Rejects Internet Neutrality Rules

[David Farber <dave () farber net>]

Begin forwarded message:

From: Stan Hanks <stan () colventures com>
Date: April 5, 2006 6:16:22 PM EDT
To: dave () farber net
Subject: House Subcommittee Rejects Internet Neutrality Rules

House Subcommittee Rejects Internet Neutrality Rules (Update1)
2006-04-05 17:02 (New York)


     (Adds companies' comments starting in fourth paragraph.

By Molly Peterson
     April 5 (Bloomberg) -- A U.S. House panel rejected a proposal that
would have protected companies including Microsoft Corp. and Google Inc.
from fees that Internet service providers may charge for delivering
their content.
     The proposal by Massachusetts Democrat Edward Markey would have
toughened ``network neutrality'' rules in a bipartisan bill that makes
it easier for telephone companies to offer Internet- based video service
in competition with cable TV.
     Markey's amendment, rejected in a 23-8 vote today by a House
subcommittee in Washington, would have barred companies including AT&T
Inc., Verizon Communications Inc. and Comcast Corp. from charging
Internet companies for faster delivery of their content.
It also would have prohibited them from favoring some companies over
others that offer the same type of content or services.
     ``Without critical changes, the legislation puts at risk consumer
choice, American innovation and global competitiveness,'' six companies
including Google and Microsoft said today in a letter to House Commerce
Committee Chairman Joe Barton, a Texas Republican.
     Neutrality is emerging as a contentious issue as lawmakers update
the Telecommunications Act of 1996. Phone and cable companies have spent
billions building fiber-optic networks and may seek to recoup some of
those investments by passing costs on to content providers. Companies
such as Google, the most-used search engine, attract advertising with
video and other content.
     The letter to Barton was signed by chief executive officers of
Google, Microsoft, Amazon.com Inc., EBay Inc., IAC/InterActiveCorp, and
Yahoo! Inc.

                          Chief Sponsor

     Barton is chief sponsor of the draft bill, which would help AT&T
and Verizon introduce television services faster. It includes provisions
to let the U.S. Federal Communications Commission enforce a neutrality
policy statement it adopted in August. The House panel plans to vote
later today on the bill.
     The FCC'S 2005 policy statement says consumers are entitled to
access legal Internet content, applications and services of their
choice. It also says there should be competition among companies to sell
access, applications, services and content.
     The subcommittee voted today to add language requiring the FCC to
rule within 90 days on any alleged violation of net neutrality
principles. It also would let the FCC levy fines of as much as $500,000
per violation.
     Markey and several other Democrats said the bill's neutrality
provisions are vague and unenforceable. The FCC principles ``do not
encompass nondiscrimination protections the Internet has always had and
desperately needs in order to ensure its continued vibrancy,'' Markey
said.

                       `Explicit Authority'

     Barton said his bill gives the FCC ``explicit authority to enforce
whatever net neutrality is'' on a case-by-case basis.
``We increased the fines so they can penalize bad behavior very
forcefully,'' he said.
     Shares of San Antonio-based AT&T fell 3 cents to $27.09 at
4:02 p.m. in New York Stock Exchange composite trading. Shares of New
York-based Verizon fell 16 cents to $34.44. Philadelphia- based Comcast
shares rose 55 cents to $27.04 in Nasdaq Stock Market composite trading.
     Mountain View, California-based Google rose $3.65 to $407.99 and
Redmond, Washington-based Microsoft rose 10 cents to $27.74.

--Editor: Golum


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