Stevens Likes Net Neutrality

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Washington— A Senate telecommunications bill will likely ban cable and phone companies from discriminating against providers of Internet voice, video and content-search services, Senate Commerce Committee chairman Ted Stevens (R-Alaska) said last week.

Stevens — who will have an important role in shaping any law that replaces the bellwether Telecommunication Act of 1996 — admitted that voicing support for anti-discrimination principles (which also go by the name network neutrality) is much easier than putting those principles into statutory language.

Do they mean that cable providers can’t charge more for higher consumer-access speeds; can’t enter into branding deals to stimulate consumer awareness and adoption of broadband; or can’t establish a fast lane for high-bandwidth video services to accommodate TV viewing that migrates to flat-panel screens connected to home networks?

HARD TO DEFINE

With the marketplace churning out new formulas almost daily, Stevens was quick to point out that he would have a difficult time designing a law that reflected his concerns.

“I do believe that net neutrality ought to be the basic principle of whatever legislation we pursue,” Stevens told reporters after holding a hearing on the business practices of broadband-network operators. “I can’t put it in words. I’m going to have to take a look at it in terms of how you define real neutrality. It’s sort of like defining a vacuum, isn’t it? It’s not easy to do.”

Although Stevens intends to offer a new telecom bill in March, he did not promise that the measure would pass this year, recognizing the reality that his panel is sharply divided on the need for government intervention in the Internet market.

Last week’s hearing gave leaders from search engine Google Inc. (www.google.com) and voice-over-Internet protocol provider Vonage Holdings Corp. a forum to aver, somewhat apocalyptically, that cable and phone companies represented real threats — either through outright blocking or through demands for cash to guarantee service quality.

“Nothing less than the future of the Internet is at stake,” said Vinton Cerf, a recognized Internet pioneer who now works for Google under the title “chief Internet evangelist.”

Vonage CEO Jeffrey Citron urged passage of a net-neutrality law, claiming cable and phone companies had the ability and the incentive to harm his product in a way the Federal Communications Commission might not have legal authority to stop.

“Because Vonage competes directly with the telephone service of the network operator that also provides high-speed Internet access, the incentives to discriminate against us are very clear,” said Citron, whose company last Wednesday filed with the Securities and Exchange Commission to raise about $250 million in an initial public offering.

Network providers were placed at a disadvantage going into the hearing.

AT&T Inc. chairman Edward Whitacre went public last November with warnings that Vonage, Google and Yahoo Inc. were “nuts” to expect to use his broadband networks for free. A day before the hearing, John Thorne, a Verizon Communications Inc. senior vice president and deputy general counsel, accused Google of freeloading, though he did not say Verizon intended to seek fees from Google for network access.

Laying out cable’s position, National Cable & Telecommunications Association president Kyle McSlarrow issued a blanket declaration that no cable subscribers would lose access to legal Web content. Walter McCormick, president of U.S. Telecom Association, which represents AT&T and Verizon, made the same promise.

But McSlarrow and McCormick refrained from saying their companies would decline to pursue business opportunities that represented differentiation in the market and promised innovative benefits for their customers.

“Just as Google and Yahoo have an incentive to invent in new broadband platforms like broadband over powerline (BPL) and Wi-Fi, broadband providers may have incentives to invest in entrepreneurs who have a new application which might compete successfully with today’s market leaders,” McSlarrow said.

Google and Vonage, he added, were backing net neutrality based not on some altruistic notion of Internet justice but on a self-serving commitment to stop cable from financing “the next idea, the next search engine that takes off,” in competition with Web leaders.

The big Web brands, he added, wanted Congress “to freeze the Internet in place, with their position in the marketplace locked in.”

Republican Sens. George Allen (Va.) and John Ensign (Nev.) pressed for marketplace solutions. But committee Democrats Byron Dorgan of North Dakota and Barbara Boxer of California said they feared that the Web superstars could get crushed. The split reinforced Stevens’s point that passing a bill would be difficult.

“I personally am very worried about this,” Boxer said. “I think we should really hear them.”

WYDEN HAS OWN BILL

Sen. Ron Wyden (D-Ore.), who left the committee last year, appeared as a witness to declare that he planned to move forward with his own legislation that would slap restrictions on cable.

Among other things, the bill would, he said, ban broadband providers from favoring content affiliates and from establishing “private networks” superior in quality to their conventional Internet-access services.

“In my view, there are powerful interests who own the pipes and access to the Net who are trying to break the Net,” Wyden said, adding that his bill would ensure that “no bit is better than another one.”

Sens. Conrad Burns (R-Mont.) urged caution. “My concern is that if we legislate prematurely, we will not let these different approaches play out in the marketplace,” he said.

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