Republicans Defeat Net Neutrality Bill

[Lemur]

Verizon and AT&T want to create a tiered internet, where you pay extra to get speedy service. I don't particularly like the idea, as the neutrality of the internet is one of the reasons it has been so successful. A bill was put forward to keep the net neutral, but congressional Republicans defeated it. Ugh.

How much longer do we have to put up with this behavior?

Full article:

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Republicans defeat Net neutrality proposal

By Declan McCullagh

Story last modified Wed Apr 05 18:17:46 PDT 2006

A partisan divide pitting Republicans against Democrats on the question of Internet regulation appears to be deepening.

A Republican-controlled House Energy and Commerce subcommittee on Wednesday defeated a proposal that would have levied extensive regulations on broadband providers and forcibly prevented them from offering higher-speed video services to partners or affiliates.

By an 8-to-23 margin, the committee members rejected a Democratic-backed "Net neutrality" amendment to a current piece of telecommunications legislation. The amendment had attracted support from companies including Amazon.com, eBay, Google, Microsoft and Yahoo, and their chief executives wrote a last-minute letter to the committee on Wednesday saying such a change to the legislation was "critical."

Before the vote, amendment sponsor Rep. Ed Markey, a Massachusetts Democrat, assailed his Republican colleagues. "We're about to break with the entire history of the Internet," Markey said. "Everyone should understand that."

This philosophical rift extends beyond the precise wording of the telecommunications legislation. It centers on whether broadband providers will be free to design their networks as they see fit and enjoy the latitude to prioritize certain types of traffic--such as streaming video--over others. (In an interview last week with CNET News.com, Verizon Chief Technology Officer Mark Wegleitner said prioritization is necessary to make such services economically viable.)

After a day of debate, the committee went on to vote 27-4 in favor of approving the final bill--minus the Democrats' amendment--sending it onward to full committee consideration, expected in late April. The vote on the amendment itself did not occur strictly along party lines, with one Republican voting in favor and four Democrats voting against it.

Leading Republicans have dismissed concerns about Net neutrality, also called network neutrality, as simultaneously overblown and overly vague.

"This is not Chicken Little, the sky is not falling, we're not going to change the direction of the axis of the earth on this vote," said Rep. John Shimkus, an Illinois Republican. He said overregulatory Net neutrality provisions would amount to picking winners and losers in the marketplace and discourage investment in faster connections that will benefit consumers.

Last week, Energy and Commerce Committee Chairman Joe Barton said: "Before we get too far down the road, I want to let the market kind of sort itself out, and I'm not convinced that we really have a problem with Net neutrality."

Barton and other Republican leaders of the House panel did, however, offer some modest changes to a telecommunications bill in response to concerns from Internet and software companies.

Their replacement bill would require the Federal Communications Commission to vet all complaints of violations of Net neutrality principles within 90 days. It gave the FCC the power to levy fines of up to $500,000 per violation.

It also contained explicit language denying the FCC the authority to make new rules on Net neutrality. Democrats charged that lack of enforcement power would mean the FCC would be unable to deal with the topic flexibly.

Rep. Charles Pickering, a Mississippi Republican, backed that less-regulatory approach, saying that a "case-by-case adjudicatory process" is the best way to address Net neutrality concerns while ensuring competition in the marketplace.

Democrat's failed proposal
The amendment that was rejected on Wednesday took a similar approach to strict Net neutrality legislation introduced in the Senate last month by Democratic Sen. Ron Wyden.

It said that any content provider must be awarded bandwidth "with equivalent or better capability than the provider extends to itself or affiliated parties, and without the imposition of any charge." That would likely prohibit any plans by Verizon or other former Bell companies to offer their own video services that would be given priority over other traffic (video is bandwidth-intensive and intolerant of network delays).

"I think this walled garden approach that many network providers would like to create would fundamentally change the way the Internet works and undermine the power of the Net as a force of innovation and change," said Rep. Anna Eshoo, a California Democrat.

Markey warned: '"There is a fundamental choice. It's the choice between the bottleneck designs of a...small handful of very large companies and the dreams and innovations of thousands of online companies and innovators."

By "very large companies," Markey was not referring to Microsoft, which has a market value of $287 billion, but its much smaller political rival Verizon, which has a market value of $101 billion and has opposed Net neutrality mandates. Markey did not appear to be referring to Google, which has a value of $121 billion and has been lobbying on behalf of federal regulations, but to AT&T, which has a value of $105 billion and has opposed them.

A CNET News.com report published last week, however, showed that the Internet industry is being outspent in Washington by more than a 3-to-1 margin.

AT&T, Comcast, Time Warner, and Verizon spent $230.9 million on politicians from 1998 until the present, while Amazon, eBay, Google, Microsoft and Yahoo spent only a combined $71.2 million. (Those figures include lobbying expenditures, individual contributions, political action committees and soft money.)

In the last week, the Net neutrality debate in Washington has spread beyond the circles of lobbyists for telecommunications and e-commerce companies.

A network of conservative and free-market groups has begun warning Congress that Net neutrality regulations are not consistent with Republican laissez-faire principles and protection of private-property rights.

The American Conservative Union, the National Taxpayers Union, former House Majority Leader Dick Armey's FreedomWorks, and Citizens Against Government Waste were among the signers of a letter Friday that said the Democrat-backed proposal would let the FCC "exercise complete discretion over the Internet."

"At the very least," the letter cautioned, "the vague terminology could lead to an explosion of litigation, which would, in turn, deter capital investments in technology and thwart the evolution of the Internet."

Republican insider Grover Norquist of Americans for Tax Reform, which opposes tax hikes, added in a letter on Tuesday that "a network neutrality provision in any form would begin down the dangerous path of Internet regulation.

[rory_20_uk]

If people want to definitely have a set speed connection between two points, then I think they should be allowed to pay for it. Personally I think that any organisations with that much pull / cash should lay some cable themselves.

But as it could quickly mean as you point out that the majority get a raw deal as providers give us our "up to 500MB" service that in fact never gets above 5MB if you live near someone who'se got a deal for a set speed.

It would only be fair if this tiered model meant that light users could get much cheaper contracts for their service, which are currently not available.

[Quietus]

For one, they want to double-dip and charge websites (eg. Google) as well as the customer. If it is a telephone, they want to charge both ends of the line, not just the caller. If it was mail, they want to charge not just the sender for stamps but also the recipient.

[Lemur]

Quietus, you nail the problem squarely. The network providers are in a hissy fit that they're not seeing the profits that Google, Yahoo and Amazon are making, and rather than attempting to compete with a better product (the Free Market way) they're attempting to put chokepoints and legislation in their favor (the Soviet way). I have nothing but contempt for them.

Depressing conclusions reaced at Ars Technica:

Any sort of Congressional endorsement of network neutrality seems a long shot at this point. Last month, Sen. Ron Wyden (D-OR) introduced net neutrality legislation in the Senate that would have had the same effect as the defeated House amendment. However, given the current climate in Washington, its prospects do not appear strong. Part of the blame for that may lay with Google, Microsoft, and other companies that rely on the Internet for a significant chunk of their business. According to a C|net report, the telecoms are far more invested in lobbying than their opponents, spending over three times the amount of money. Maybe it's time for Google, Yahoo!, and Amazon to build a serious presence on Capitol Hill.

[Crazed Rabbit]

The free market way is not to pour more regulation to stop companies from doing things you don't like. Consumers (not you, or your congressman) will choose which they like better. And if you don't like it, don't use verizon or AT&T for internet, but don't try and stop the company from doing something that you don't like through legislation. And certainly don't even attempt to claim that legislation is 'the free market way'.

Crazed Rabbit

[Lemur]

CR, if I had more faith in the Republicans, I would reach the same conclusions you have. Unfortunately I do not see them in that light. The current Dem proposal was not great, but I would like to see some sort of endorsement of net neutrality come out of that bog of corruption we call "Congress."

A free market needs good controls and regulation to function. It's one of life's funny little paradoxes. If I have no incentive not to sell asbestos hot dogs, I just might do it. My imperative is to maximize my profits, period. If society wants any other perogative, it has to be imposed through some sort of rules.

Ask any economist about it. Regulation and a free market -- the oddball couple that makes life great!

[Alexander the Pretty Good]

The consumer, acting on his own, won't buy many asbestos hot dogs. Even if it is a good name for punk band.

[Xiahou]

"This is not Chicken Little, the sky is not falling, we're not going to change the direction of the axis of the earth on this vote," said Rep. John Shimkus, an Illinois Republican. He said overregulatory Net neutrality provisions would amount to picking winners and losers in the marketplace and discourage investment in faster connections that will benefit consumers.

Last week, Energy and Commerce Committee Chairman Joe Barton said: "Before we get too far down the road, I want to let the market kind of sort itself out, and I'm not convinced that we really have a problem with Net neutrality."

I agree with both of those statements.

The American Conservative Union, the National Taxpayers Union, former House Majority Leader Dick Armey's FreedomWorks, and Citizens Against Government Waste were among the signers of a letter Friday that said the Democrat-backed proposal would let the FCC "exercise complete discretion over the Internet."

"At the very least," the letter cautioned, "the vague terminology could lead to an explosion of litigation, which would, in turn, deter capital investments in technology and thwart the evolution of the Internet."

Republican insider Grover Norquist of Americans for Tax Reform, which opposes tax hikes, added in a letter on Tuesday that "a network neutrality provision in any form would begin down the dangerous path of Internet regulation.

Again I totally agree. This has nothing to do with trusting Republicans Lemur- they're not imposing regulation or anything else. It's about trusting free-markets and the innovation that has made the Internet the unbelievable success it is today. You're not going to get that growth and innovation by having overstuffed politicians imposing uneeded regulations and red tape.


This is 'foot in the door' government regulation for a problem that doesnt even currently exist. Or as us techies say its 'a solution looking for a problem'.

Ask any economist about it. Regulation and a free market -- the oddball couple that makes life great!

Most regulation is just an attempt to fix problems created by earlier government meddling.

[Goofball]

The consumer, acting on his own, won't buy many asbestos hot dogs.

But consumers acting on their own will buy billions of cigarettes every year, which are just about as palatable and certainly as carcinogenic as asbestos hot dogs. This fact pokes a bit of a hole in the theory that consumers will always act rationally and in their own best interests.

So while I agree in principal that markets are best off with as little government interference as possible, I do believe that there are certain minimum levels of regulation that are required. Mainly because people are idiots and do need some protection both from themselves and from the greed of those willing totake advantage of their idiocy.

[Xiahou]

But consumers acting on their own will buy billions of cigarettes every year, which are just about as palatable and certainly as carcinogenic as asbestos hot dogs. This fact pokes a bit of a hole in the theory that consumers will always act rationally and in their own best interests.

Well, at least we have the government to protect us from cigarettes.

Honestly though, when I think it through, just about the only need for government meddling I can think of is in fact environmental regulation. I dont doubt problems would sort themselves out here too over time, but Im not convinced the markets would react before significant damage is done. And even that should be sensible and as unobstrusive as possible.

[Crazed Rabbit]

Somehow, I don't see the connection between selling poisoned food and selling a different type of internet service.

Crazed Rabbit

[Banquo's Ghost]

Somehow, I don't see the connection between selling poisoned food and selling a different type of internet service.

I imagine what he was trying to say was that there is no such thing as a free market. All markets are regulated, and the argument is rather about 'by how much' and 'for what purpose'.

A truly unfettered market (or in many cases, and lightly regulated one) tends to favour those who obtain the whip-hand early. Monopolies and cartels then form, which destroys the freedom of the market. Paradoxically, only firm regulation of markets keeps them 'free' enough to allow the consumer real choice.

The nearest a modern economy has come to an unfettered market is Russia in the early 90's, during its painful transition from a command to a market economy. Because the regulators were clueless and weak, corruption took over, a few people made incredible fortunes by being quicker crooks than the others (not by being better businessmen or providing consumer choice) the country's common wealth was sequestered and organised crime ran the market.

When regulation fails, capital power controls the market rather than consumers, and when governments fail, the gun controls the market.

[Xiahou]

A truly unfettered market (or in many cases, and lightly regulated one) tends to favour those who obtain the whip-hand early. Monopolies and cartels then form, which destroys the freedom of the market. Paradoxically, only firm regulation of markets keeps them 'free' enough to allow the consumer real choice.

Most monopolies are created by government meddling, so it's not suprising that government action is required to break them up.

The nearest a modern economy has come to an unfettered market is Russia in the early 90's, during its painful transition from a command to a market economy. Because the regulators were clueless and weak, corruption took over, a few people made incredible fortunes by being quicker crooks than the others (not by being better businessmen or providing consumer choice) the country's common wealth was sequestered and organised crime ran the market.

I'll take Hong Kong as a better example. I wouldnt say Russia was free from government intereference so much as it was saddled with government corruption on all levels.

From Wikipedia:

Hong Kong has one of the least restricted economies in world and is basically duty-free. It is the world's 10th largest [12] trading entity and 11th largest [13] banking centre. The dominant presence of international trade is reflected in the number of consulates located in the territory: As of June 2005, Hong Kong had 107 consulates and consulates-general, more than any other city in the world. Even New York City, host of the United Nations, only has 93 consulates.

[Banquo's Ghost]

Most monopolies are created by government meddling, so it's not suprising that government action is required to break them up.

If you genuinely think that, then we don't have a basis for further discussion. Every business strives towards having a monopoly in their market. Unregulated, they will do whatever is necessary to achieve that pre-eminence. To think otherwise is as naive as socialists thinking people will work selflessly for the greater good. Human nature contradicts both views.

I'll take Hong Kong as a better example. I wouldnt say Russia was free from government intereference so much as it was saddled with government corruption on all levels.

Hong Kong is corrupt to the eyeballs. It's because its economy is controlled by the Capitalist-Communists in Beijing who can loosen regulation for themselves and their friends and impose it on others that it gets so many 'friends'. No need to involve those pesky voters when there's dollars to be made. It's also rife with criminals who profit from its status.

In both these cases, the corruption of government is there to 'free' up the market for those who pay the bribes. As far as I'm aware, the only country in the world at present without a government to interfere is Somalia, and they're a real powerhouse on the world economic stage.

[Xiahou]

If you genuinely think that, then we don't have a basis for further discussion.

Perhaps you're right, since you're missing the boat altogether.

Every business strives towards having a monopoly in their market. Unregulated, they will do whatever is necessary to achieve that pre-eminence. To think otherwise is as naive as socialists thinking people will work selflessly for the greater good. Human nature contradicts both views.

Businesses will always strive to be as successful as possible and to make as much profit as they can- Im not sure where you thought I said otherwise. However, in a competitive market no one business will become totally dominant. Most classic monopoly examples were created with government help and protection- ie: Ma Bell, railroad/steel barons, ect.

In both these cases, the corruption of government is there to 'free' up the market for those who pay the bribes. As far as I'm aware, the only country in the world at present without a government to interfere is Somalia, and they're a real powerhouse on the world economic stage.

You're missing the boat again. Freedom from government interference is not the same as freedom from government, which is what you have in Somalia. The job of government is to create a safe, stable environment for it's people to live and conduct business in.

Anyhow, I'd like to get back to the topic for a bit:

Verizon and AT&T want to create a tiered internet, where you pay extra to get speedy service.

We've had this forever havent we? If a company wants Internet access they could buy ISDN- if they wanted faster access they buy a T1, T3, ect. I can also see good reason for them prioritizing certain kinds of content over their networks as well. With Verizon's new FiOS program, they're delivering phone, television and Internet access across one network. Obviously, they would need to be able to prioritize certain types of traffic like voice/video over their network to keep Internet access from choking off bandwidth. I think it'd be absurd to tell them they have to allow users to suck up all the throughput downloading pr0n or whatever at the expense of other people's ability to make voice calls or watch tv.

[Ser Clegane]

Most monopolies are created by government meddling, so it's not suprising that government action is required to break them up.

To some extent true - when monopolies do exist, the government is usually involved (actually in these cases the monopoly id often state-owned, e.g. postal services, telecommunications, railways et.).
However, without government intervention, we would have (or would develop towards) monopolies or at least oligopolies that could act like de-facto-cartels in sectors were we don't have them now e.g., steel, petrochemicals, pulp & paper.