Telecom reform moves forward

House panel OKs measure favored by phone companies

- Tom Abate, Chronicle Staff Writer
Thursday, April 6, 2006

A House subcommittee handed phone companies a victory Wednesday by voting 27-4 to advance a bill that would make it easier for them to deliver television service over the Internet and clearing the way for all Internet carriers to charge more for speedier delivery.

The lopsided vote was a defeat for Internet and technology firms like Google and Microsoft, which had hoped to amend the bill to enforce a principle called network neutrality and preserve the status quo under which all Internet traffic is treated equally.

Earlier in the day, the subcommittee voted 23-8 to reject an amendment by Rep. Ed Markey, D-Mass., that would have inserted specific language designed to enforce network neutrality and prevent the feared creation of fast and slow lanes on the Internet.

Markey said his amendment was necessary to protect the "Internet as an engine of innovation" and ensure that new services had an equal chance to sprout.

Instead, the committee adopted compromise provisions, accepted by the bill's chief sponsor, Rep. Joe Barton, R-Texas, authorizing the Federal Communications Commission to investigate violations of network neutrality and levy fines of up to $500,000 on a case-by-case basis.

Supporters painted defeat of Markey's net neutrality amendment in bleak terms.

"Members from both sides of the aisle endorsed a plan which will permit cable and phone companies to construct 'pay as you surf, pay as you post' toll booths for the Internet," said Jeff Chester, executive director of the Center for Digital Democracy in Washington.

But Sonia Arrison, director of technology studies for the Pacific Research Institute in San Francisco, dismissed concerns that the proposed bill would lead to a two-tiered Internet.

"There's plenty of competition,'' Arrison said. "The market will take care of it."

Largely overlooked in a debate dominated by net neutrality are provisions in the proposed legislation that would allow broadband providers, notably big phone companies, to obtain a national license to deliver television service, and exempt them from having to negotiate with cities for licenses.

According to the proposed legislation, once a broadband carrier started delivering TV in a given area, local cable companies -- which must get municipal licenses -- would be eligible for a national license in that area.

Wednesday's subcommittee vote on the bill, the Communications Opportunity, Promotion and Enhancement Act of 2006, sends it on to the House Energy and Commerce Committee. That committee is chaired by Barton. Action is expected the week of April 24.

E-mail Tom Abate at tabate@sfchronicle.com.