Thursday, June 29, 2006

Senate panel backs telco bill, no Net neutrality

Senate panel backs telco bill, no Net neutrality
By Jeremy Pelofsky

WASHINGTON (Reuters) - The U.S. Senate Commerce Committee approved sweeping communications reform legislation on Wednesday that would make it easier for telephone companies like AT&T Inc. to offer subscription television to consumers.

But the panel narrowly rejected attempts by some lawmakers to strengthen safeguards on Internet service, which had pitted high-speed Internet, or broadband, providers such as AT&T against Internet companies like Google Inc.

In a room packed with lobbyists representing companies and consumer groups, debate raged over whether broadband providers can charge more to carry unaffiliated content or to guarantee service quality, an issue called Net neutrality.

The bill included provisions aimed at preserving consumers' ability to surf anywhere on the public Internet and use any Internet-related application, software or service, similar to a bill that passed the House of Representatives.

Maine Republican Sen. Olympia Snowe and Sen. Byron Dorgan, a North Dakota Democrat, tried to add further protections by barring discrimination of content or service based on origin, destination or ownership, but it failed to get a majority vote. The final tally was 11 to 11.

"That means for the first time we are going to have a two-tiered Internet," said Snowe, who bucked her party. "Broadband operators will be able to pick winners and losers, they will be able to choose the Web sites of their choice."

Other Republicans countered that further protections were not needed because there were no complaints about consumers being denied access to services or content. Adding rules would hobble competition, innovation and deployment, they said.

"We haven't seen anything yet that indicates there is discrimination," said Ted Stevens, chairman of the committee and an Alaska Republican. "If this amendment is adopted, this bill will never come out of conference (with the House)."

The bill would not prevent cable and telephone companies tacking on an extra charge for content that requires more Internet bandwidth than others, such as movie downloads.


Despite extensive lobbying by the telephone carriers, prospects for a final law this year remain uncertain.

Congress faces a dwindling number of work days because of the November elections.

If the measure passes the full Senate, it would have to be reconciled with the narrower bill approved by the House. Stevens told reporters on Tuesday he did not yet have the votes to get the bill through the Senate.

The measure is in part a result of pressure from AT&T and Verizon Communications for Congress to simplify the process for them to get licenses to offer television service. They argue it can take years to get permission from thousands of local cities and counties.

Still, AT&T's corporate political action committee was second in donations to candidates so far during the 2005-2006 election cycle, giving $1.3 million to candidates -- mostly to the Republicans who control Congress, according to PoliticalMoneyLine, which tracks money in politics.

The measure would limit local authorities to 90 days to review and negotiate a license with a video provider. It would allow cities to collect up to 6 percent of gross revenue earned by a company for its video service.

Additionally, the committee voted to require the Federal Communications Commission to adopt consumer-protection and customer-service regulations on wireless communications service.

Facing opposition, Sen. John Rockefeller, a West Virginia Democrat, withdrew his amendment that would have eliminated provisions in the bill preempting states from imposing numerous regulations on wireless service.

The panel also approved a permanent ban on taxing Internet access and handily rejected an amendment to encourage cable providers to offer consumers the ability to pay only for the cable television channels they want, known as a la carte.