House Panel Approves Network Neutrality

5/25/2006 7:42 AM Eastern

Cable and other broadband-access providers would violate federal antitrust laws if they discriminated against Internet-based companies that offer content, run applications and offer search services under a bill passed by the House Judiciary Committee Thursday.

Passage of the bill presages a potential House floor fight over the need to impose so-called network-neutrality mandates on cable operators, phone companies and other providers of broadband-access service, which rapidly connects millions of consumers to their favorite Web sites to shop, bank, debate and learn.

The bill (H.R. 5417) passed by a 20-13 vote. All Democrats voting supported the bill, but 13 of 19 Republicans voted against it, even though committee chairman James Sensenbrenner (R-Wis.) is the chief sponsor of the bill.

Sensenbrenner’s bill would prohibit certain actions by broadband-access providers in the operation of their networks. A bill (H.R. 5252) approved by the House Energy and Commerce Committee would authorize the Federal Communications Commission to police broadband providers through a complaint-driven process that does not provide for the agency to adopt regulations.

In a statement before the vote, Sensenbrenner said legal restrictions were necessary because cable and phone companies control about 98% of the broadband-access market, giving them powerful incentives to discriminate against Web-based companies in which they do not have financial interests.

“These conditions create an environment ripe for anticompetitive and discriminatory conduct,” he added.

Cable and phone companies are waging a political battle against Internet giants -- including Google Inc., Yahoo! Inc., eBay Inc. and Microsoft Corp. -- that want legal guarantees of equal treatment of all lawful Internet content and commerce. Network owners claimed that net neutrality would stifle investment and force consumers to foot 100% of the cost to upgrade networks.

“While we are disappointed that the Judiciary Committee chose to move toward regulating the Internet, we are pleased that the majority of the majority recognized that this legislation would deter investment in our nation’s broadband infrastructure,” said Tim McKone, AT&T’s executive vice president of federal relations.

Rep. Lamar Smith (R-Texas), saying that the bill was vague in some areas, argued that the Sensenbrenner bill was trying to predict the future of the Internet marketplace. “Frankly, I don’t believe we have the ability to do that,” said Smith, who voted against the bill.

The dispute between the two committees hands a political problem to House Speaker J. Dennis Hastert (R-Ill.) and other House leaders, who suddenly find themselves at the crossroads of a fight involving some of the wealthiest and politically connected companies in the country.

The same fight is being waged in the Senate, although committee votes have not been cast.

Net-neutrality opponents are hoping that Hastert will call up the Energy and Commerce bill and refuse to allow Sensenbrenner to offer his bill as an amendment. But such a move would likely trigger a strong backlash.

In his remarks, Smith indicated that the Judiciary vote could turn out to be meaningless.

“There is no guarantee that this bill will be made in order on the [House] floor,” he said.

Sensenbrenner introduced the bill last week with support from his panel’s ranking Democrat, John Conyers (Mich.), as well as Reps. Rick Boucher (D-Va.) and Zoe Lofgren (D-Calif.).

The bill would amend the Clayton Act to require broadband-access providers to interconnect their facilities on reasonable and nondiscriminatory terms; operate their networks in a nondiscriminatory manner so that unaffiliated content, service and applications have an equal opportunity to reach consumers; and refrain from interfering with consumer access to lawful content, services and applications.

Under the Clayton Act, passed in 1914, injured parties may sue in federal court to obtain an injunction, recover treble damages and collect attorneys fees.

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