TELECOM Digest OnLine - Sorted: Broadband, Content Provider Firms Fight Over Net Neutrality

Broadband, Content Provider Firms Fight Over Net Neutrality

Jeremy Pelofsky (
Tue, 7 Feb 2006 16:33:21 -0600

By Jeremy Pelofsky

High-speed Internet providers and Internet content companies clashed
before lawmakers on Tuesday, in dispute over whether a law enshrining
the right to surf anywhere on the Web would help or harm consumers.

Representatives of local telephone and cable companies that offer fast
Internet access, known as broadband, said passing a new law could
stymie innovation while companies like Google Inc. said that could
happen without legislation.

Broadband providers have largely pledged that consumers will be able
to access any Internet site. But some also said they may charge more
for services that use faster private Internet networks, like
downloading movies.

"Regulatory or legislative solutions wholly without justification in
marketplace activities would stifle, not enhance the Internet," Walter
McCormick, head of the U.S. Telecom Association, told the Senate
Commerce Committee.

Yet companies like Web search engine Google and Internet telephone
provider Vonage Holdings Corp. argued that a private fast Internet
lane could not only block users from accessing their content and
services, but also squash innovation.

"We must preserve neutrality in this system in order to allow new
Googles of the world, new Yahoos, the new Amazons, to form," said
Vinton Cerf, a Google vice president who in previous jobs helped
develop the Internet.

"We risk losing the Internet as a catalyst for consumer choice, for
economic growth, for technological innovation and for global
competitiveness," Cerf said.

In the middle were lawmakers who were divided and uncertain about
whether they should act. Republicans and Democrats both expressed
support for unfettered Internet surfing, but a few Republicans
cautioned about legislating too quickly.

"This hearing on Internet neutrality is one of the most difficult but
most important issues before this committee as we consider revisions
to the nation's communications laws," said Senate Commerce Committee
Chairman Ted Stevens, an Alaska Republican.

Sen. John Ensign, who has offered legislation to revise U.S. communi-
cations laws, questioned whether such provisions would cut incentives
for companies to build out their networks and compete.

"You do deserve a return on your investment is the bottom line if
you're going to build out these networks," the Nevada Republican
said. "Otherwise, if you can't give them the return on their
investment, Wall Street is not going to loan them the money to do

But Democrats on the panel countered that consumers are already paying
for content and broadband access.

"It is not a free lunch for any one of these content providers," said
Sen. Byron Dorgan, a North Dakota Democrat. "I've already paid the
monthly toll" to go to any Internet site.

Analysts have been skeptical that Congress will act this year on the

"Details are devilish, suggesting differences would have to be bridged
with broad and possibly ambiguous mandates that invite regulatory and
court battles," said an analyst report by Stifel Nicolaus released on
Tuesday. "And even then, legislation could easily stall."

Copyright 2006 Reuters Limited.

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