Net Neutrality On The Hill
Author: Madison Lockwood

The internet has always been a source of confusion and angst on
Capitol Hill. It has also been one of the more glamorous issues
among the lawmakers, because the impact it has had on the way
Americans communicate, seek entertainment and do business.

As the speed of the internet has grown, as its "bandwidth" has
allowed it to carry large amounts of content at high speed, the
internet highway has become an enormously lucrative commercial
highway. It has also become much like a utility, in that its
services are delivered primarily by cable operators and
telephone companies, each industry operating in most markets as
a de facto monopoly.

Now, those cable and telephone companies that are the internet
service providers, or ISPs, are looking for additional revenue
services beyond the subscription fees that they charge
consumers each month. They are considering charging major
content providers on the web a fee for massive use of their
networks. Large websites such as Amazon, Google and Yahoo would
be charged a fee for the amount of traffic they put into the web

pipelines.

Keep in mind, these providers already pay for their bandwidth.
They pay for their connections to the Internet through various
datacenters and connections to various backbone networks. Some
don't do much to dispel the confusion their claims may cause,
allowing people to think Google somehow isn't paying for their
bandwidth usage already. All major content providers do pay,
the issue at the heart of this debate is whether they will have
to pay more due to their size, or suffer less-than equal
treatment when an ISP's customers attempt to reach their sites.


Net Neutrality Comes to Center Stage

What has brought this issue to a head is the pending ability of
broadband cable networks to deliver movies and other first run
video programming over the internet. But the success of Google
and Yahoo with their advertising revenue model and Amazon with
its enormous retail presence has convinced the cable system
operators that they are entitled to some of the revenue these
companies are deriving from services delivered and transactions
concluded over their networks - at no cost.

Thus "net neutrality" has become a buzzword on Capitol Hill and
the focus of more than one proposed piece of legislation in the
past eighteen months. One of the problems facing the lawmakers
is that no one is exactly sure what net neutrality means. For
the big content providers, it means no additional fees for
their presence and availability on the internet. For the ISPs,
it is a veiled term for regulated rates - or more accurately,
the inability to create a rate structure for major websites.

The National Cable & Telecommunications Association (NCTA) has
fought cable regulation for years, and sees net neutrality as
another governmental threat. Says a spokesman, "For instance,
does network neutrality mean that network operators can't block
spam? Should network operators be allowed to stop viruses from
spreading? Should large users of peer-to-peer software be
allowed unlimited bandwidth so service for other users is
slower?"

The major internet search engines and retail sites are active
in their support for net neutrality, and they are joined by
some likely allies including internet freedom of speech
advocates, liberal organizations such as MoveOn and some
libertarian organizations.

The legislative concern is that the monopolistic service
providers would be in a position to favor some websites over
others - and that providing unlimited high speed delivery
capability to major sites will push other websites into slower
lanes on the internet highway. There is also the possibility of
ISPs denying some websites access to their networks altogether.
These scenarios are viewed as an inherently unfair model
subject to antitrust consideration, at least by some Democrats.


Google recently threatened to use antitrust lawsuits should net
neutrality initiatives fail and they detect any signs of
discrimination against their traffic.

Freedom of Speech or Freedom of Profit?

The philosophical issues are interesting. But more important in
this issue are the potential business opportunities for both
content providers and network operators. The telephone
companies that have large numbers of high speed internet
subscribers intend to get into the television business via the
internet.

Yahoo and Google see opportunities in online video, and
alliances between such websites and movie companies are a real
possibility. The cable companies that provide internet service
are also interested in proprietary pay-per-view services
delivered via the internet. The service providers would like to
see a "tiered" structure wherein they can charge large websites
(with large revenue streams) a fee. In addition, they would
like to get into the
content business themselves.

The ISPs argue that additional revenues are necessary in order
for them to continue to invest billions in high speed networks
to better serve their customers. They are finding some allies
among hardware manufacturers, who see the implementation of a
fee structure online as requiring additional in-home equipment.
Some conservative Republicans are opposed to net neutrality as
well, agreeing that the ISPs would be denied the ability to
expand their networks without the additional revenue.

A Regulatory Conundrum

The FCC has left the issue alone. At one point, they dismissed
the issue when raised by Amazon and other major web content
providers, saying that regulation was unnecessary for
activities that had yet to occur. Then Madison River, a
telecommunications company in North Carolina, blocked internet
telephone service over their telephone network which they used
to deliver both internet access and telephone service. The FCC
is no longer in a position to ignore the matter, as they will
be the enforcement body for whatever rules emerge from the
current debate

A bill addressing net neutrality that was proposed by Democrats
failed in the House in April. However attitudes are shifting. In
May, a seemingly bipartisan bill came out of the House Judiciary
Committee that would add specific language to existing antitrust
law guaranteeing net neutrality. The Judiciary bill would make
it illegal under antitrust law for network operators to impose
fees or to fail to provide their services on "reasonable and
nondiscriminatory terms."

Further, the bill would bar ISPs from blocking or impairing
internet sites. The house has two other pending bills as well,
both emanating from Democrats. One of the proposals is from
Congressman Ed Markey, a longtime expert on cable and
telecommunications issues. He proposes to amend a
telecommunications bill slated for consideration by both houses
later this year.

On the Senate side, there is a major rewrite of the
Telecommunications Act of 1996 underway and debate over this
issue has made its way into the process. At the moment, the
proposed bill includes language that charges the FCC with
watching for potential violations of net neutrality and
reporting its findings to Congress. This "when in doubt,
commission a study" approach suits the NCTA perfectly. It's a
good-government approach to continued non-regulation, and as
the NCTA president told a Senate committee "This is the kind of
issue that is most appropriately studied a lot more."


About The Author: Madison Lockwood is a customer relations
associate for http://ApolloHosting.com,
http://www.apollohosting.com. As a small business consultant,
she helps prospective clients understand how a website may
benefit them both personally and professionally. Apollo Hosting
provides website hosting, ecommerce hosting, & vps hosting to a
wide range of customers.