Anything But Neutral

OF ALL THE CATEGORIES that could make up a telecom rewrite, net neutrality ranks among the most controversial, and least neutral, topics under consideration. The blogosphere is raging with opinions on the matter. Associations have been lining up expert panels to discuss it during conferences. Senators this winter heard testimony from companies and experts on all sides of the debate. And Democratic Sen. Ron Wyden of Oregon has turned the issue of net neutrality into a bill all its own the Internet Nondiscrimination Act of 2006.

Policies on net neutrality could fundamentally alter the Internet landscape, moving from equal-access delivery to changing how consumers access their online services; determining whether providers charge for preferred routing and downloading; and deciding whether application services providers such as Inc. will have to pay carriers to prioritize their content. In that case, charges would be passed down to consumers. Its wrong to create an information superhighway thats strewn with discriminatory hurdles,Wyden said in March. I have introduced legislation to stop the powerful interests who control access to the Internet from picking winners and losers on the Internet. This bill is for consumers, innovators and small businesses its all about equal access for everyone: the same access, the same content, for the same price.

Wydens views contrast markedly with the views of companies including AT&T Inc., BellSouth Corp. and Verizon Communications Inc., which are among those calling for the market to determine the failure or success of net neutrality rules. Robert Crandall, analyst and senior fellow in economic studies at The Brookings Institution, also favors an unregulated approach with the caveat that as long as you have competitive alternatives, if more consumers want a particular kind of service in which there is no favored content, there is no charge for certain types of content, they can go to those locations, he says. I would let the market take care of this unless there are really natural monopoly tendencies in the delivery of it.

Its wrong to create an information superhighway thats strewn with discriminatory hurdles. I have introduced legislation to stop the powerful interests who control access to the Internet from picking winners and losers on the Internet.
Sen. Ron Wyden, D-Ore.

On the other hand, consumer advocates and competitive carrier representatives want regulation that ensures equal access to content for all. During a Senate Commerce Committee hearing on net neutrality in February, Earl Comstock, president and CEO of COMPTEL, told policymakers Congress can reaffirm the common carrier policies that led to the Internets creation and the subsequent innovation explosion, or it can reaffirm the FCCs recent decision to abandon those policies and trust that the private business interests of a few network operators namely the Bells and the cable companies will protect consumers, provide access to competing content and service providers, and enable the next-generation Internet to be built. If history and basic business behavior are any guides, the approach taken by the FCC will prove catastrophic.

The FCC last year released a policy statement affirming net neutrality principles, but the competitive community remains skeptical that those standards will not be reversed, especially as more megamergers loom. Indeed, activities such as the pending merger of AT&T Inc. and BellSouth Corp. arouse concerns that a RBOC duopoly is around the corner, and that it could allow the telecom giants to run roughshod over neutrality policies (see related story on Page 22). Yankee Group Research Inc. Senior Analyst Josh Holbrook does not see that happening. He predicts that, to be allowed to merge, AT&T and BellSouth will have to commit to net neutrality rules, albeit to their chagrin. The former SBC Communications Inc. (now AT&T Inc.) has been fairly vocal in their unwillingness to provide a level playing field, and I think they might be forced into doing so, he says.

The back-and-forth over net neutrality is unlikely to die down any time soon. As Congress tries to formulate a rewrite that spans the decades, people on both sides of the debate want their views to take precedence. Large telecom carriers seem to be saying it is too early to tell whether they will discriminate against other providers.

BellSouths Jonathan Banks, vice president of executive and federal regulatory affairs, told attendees at the National Association of Regulatory Utility Commissioners (NARUC) in February, There is no need to intervene here because there is no history of abuse.

Net neutrality advocates want to keep bias from happening at all. As history has repeatedly demonstrated, it is only those who can discriminate who object to a requirement that they not do so, COMPTELs Comstock said during the Senate hearing on net neutrality.

With no easy answer in a debate in which the outcome stands to affect how business and commerce run, companies and consumers are waiting to see what language appears in a telecom rewrite. Sen. Ted Stevens, RAlaska, chairman of the Senate Committee on Commerce, Science and Transportaion, which is taking the lead on a rewrite, has said he supports some form of net neutrality legislation, but that crafting such guidelines will not be simple because there is no consensus among lawmakers, just as there is none in the carrier community.

AT&T Inc.
BellSouth Corp.
Brookings Institution, The
National Association of Regulatory Utility Commissioners
Senate Committee on Commerce, Science and Transportation
Verizon Communications Inc.
Yankee Group Research Inc.

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