Inouye Offers Senate Net-Neutrality Bill

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In a sign of tension atop the Senate Commerce Committee, Sen. Daniel Inouye (D-Hawaii) sponsored legislation Friday that would impose network-neutrality mandates on cable operators, phone companies and other providers of high-speed-Internet access.

Inouye's support puts him at odds with Commerce Committee chairman Ted Stevens (R-Alaska), who thinks regulation of broadband-service providers is premature because market-power abuse by cable and phone companies has not been demonstrated.

Inouye, a close friend of Stevens for decades, signed on as a lead co-sponsor with two other Commerce Committee members, Sens. Byron Dorgan (D-N.D.) and Olympia Snowe (R-Maine), setting the stage for a major battle in the committee in June and possibly later on the Senate floor.

“The bill [S. 2817] that I have co-sponsored with Sens. Snowe and Dorgan is necessary to ensure that consumers and content companies have the ability to use the Internet without interference or gate-keeping by the network operators,” Inouye said in a prepared statement.

Stevens is planning a June 20 committee vote on his bill (S. 2686). He indicated Thursday that he is willing to cut deals to achieve a bipartisan bill, but he was not specific.

Inouye is scheduled to oversee a Commerce Committee hearing May 25 strictly on the subject of network neutrality. Stevens won’t be able to attend.

Stevens was initially receptive to arguments that prescriptive net-neutrality regulations should be enacted by Congress. But he changed his mind after Wall Street analysts, including Craig Moffett of Sanford C. Bernstein & Co. LLC, told his panel that network owners should not be expected to fund hugely expensive upgrades from a single revenue source: subscriber Internet-access fees.

Cable and phone companies oppose net-neutrality regulation, claiming that it would hurt network investment and that Google Inc. (, Yahoo! Inc. ( and others Web giants want consumers to foot the entire bill for the billions of dollars spent to install high-speed-data links in millions of homes.

Network providers have also stressed that the Internet has enjoyed phenomenal growth because government regulation has been kept to a minimum.

In his bill, Stevens decided to order the Federal Communications Commission to study Internet commerce and file annual reports for five years. Although the FCC is required to identify problematic activities, it would not be allowed to draft regulations.

"We haven't seen [Internet discrimination] yet. It's still a fear," Stevens told reporters Thursday. "If [FCC regulators] see it at all, they'll raise the flag and we're supposed to act, and I think we would act immediately if that happened."

The Snowe-Dorgan-Inouye bill would take a more aggressive approach.

Like a House bill sponsored by Rep. Edward Markey (D-Mass.), the Senate bill would ban broadband-access providers from blocking or degrading unaffiliated Web content or applications, and it would ban broadband-access providers from prioritizing their own content but refusing to do the same for similar content that they don’t own.

The bill would also bar cable and phone companies from demanding fees in exchange for quality-of-service guarantees to third parties. Under the bill, consumers would have the right to purchase broadband access as a stand-alone product unbundled from any cable, telecommunications or voice-over-Internet-protocol service.

However, the bill would permit broadband-access providers to vary the price consumers pay for broadband access -- also called tiering -- based on data speeds.