June 8, 2006 - Net Neutrality: Fact v Fiction

Dear Colleague,

When the House considers H.R. 5252, the Communications Opportunity, Promotion, and Enhancement (COPE) Act, tomorrow we will be offering an Amendment to protect Net Neutrality and preserve consumers’ access to Internet content and the services of their choice.

Opponents of Net Neutrality have made various claims about Net Neutrality that misrepresent the purpose of our Amendment and the basis for it.  Please read the attached summary of several of the most common distortions about Net Neutrality and the real facts about this important issue.

We urge you to support the Markey-Boucher-Eshoo-Inslee Amendment, and if you have any questions you can contact Jason Mahler (Eshoo) at 5-8104 or Colin Crowell (Markey) at 5-2836.

Sincerely,
                        /s/                                                    /s/

 
        Anna G. Eshoo                                 Edward J. Markey

 
Net Neutrality:  Fact vs. Fiction

FICTION:  Net Neutrality rules would be unprecedented regulation of the Internet.

FACT:   In actuality, the Markey-Boucher-Eshoo-Inslee Amendment will not regulate the Internet at all.  It only stipulates that the “last mile” broadband access networks controlled by dominant telephone and cable companies cannot unfairly discriminate against web-based businesses and voices.  Congress, the FCC, and the States have long recognized that cable and telephone providers must operate under rules and guidelines that protect consumers, innovation, and free markets.

From the inception of the Internet until last summer, it was protected under the nondiscrimination rules at the FCC which required telecommunications carriers to take a “hands-off” approach to the Internet.  These nondiscrimination rules were similar to the prohibitions that ensured that Verizon or BellSouth had to treat calls from Sprint or T-Mobile just as it handled their own.  Web content accessed through telecommunications carriers was handled similarly – with no discrimination based on the source – and the Internet has flourished as a result.

These rules were lifted, along with a host of other rules applicable to telephone service last summer the so-called “Brand X” Supreme Court decision and subsequent FCC action.  The Markey-Boucher-Eshoo-Inslee Amendment merely replaces the previous non-discrimination rules with similar ones to protect consumers and innovation.

FICTION:  Concerns about Net Neutrality are speculative and not based on anything that is happening in the marketplace. 

FACT:  The major Bell telephone companies are perfectly clear about their intention to implement tiers of paid access for Internet content.  They are promoting these plans in the halls of Congress, on Wall Street, and to the American public.  Consider the following:

    William Smith of BellSouth: “[Smith] told reporters and analysts that an Internet service provider such as his firm should be able, for example, to charge Yahoo Inc. for the opportunity to have its search site load faster than that of Google Inc. Or, Smith said, his company should be allowed to charge a rival voice-over-Internet firm so that its service can operate with the same quality as BellSouth’s offering.” (Washington Post, December 1)

    Edward Whitacre of AT&T: “Now what they would like to do is use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it. So there’s going to have to be some mechanism for these people who use these pipes to pay for the portion they’re using. Why should they be allowed to use my pipes?” (Business Week, November 7)
 
There is no ambiguity in the phone companies’ plans and no need for Congress to witness actual harm before we act.  The last major telecommunications legislation was enacted in 1996 – if we pass the COPE Act this year we are not likely to refocus on these issues for another decade.  Moreover, the COPE Act actually prevents the FCC from adopting rules to enforce Net Neutrality and relies instead on an incomplete, broadly-worded Commission policy statement.

FICTION:  Net Neutrality rules will frustrate investment in advanced broadband networks by telephone companies because they will not be able to recoup their investments.

FACT:  The Bell companies were investing in advanced broadband networks prior to the change in FCC rules last August.  In addition, the Markey-Boucher-Eshoo-Inslee Amendment specifically preserves the ability of broadband network providers to charge whatever they want to provide broadband access, video programming, or VoIP telephone services to consumers.  Broadband providers may also continue to charge website operators for web hosting and access services.  The Amendment merely prevents network operators from charging Internet companies a second time, with the implementation of a new private broadband tax, to reach consumers who have requested access to certain web-based content and services.

FICTION:  The COPE Act includes meaningful Net Neutrality protections.

FACT:  The COPE Act lacks substantive, enforceable network neutrality rules, and seeks to address this important issue by giving a vague, amorphous FCC “broadband policy statement” the force of law.  The FCC policy statement also does not include the needed prohibition against discrimination and would permit broadband providers to break the Internet into “tiered” service.  The imprecisely-worded FCC policy statement can be found here.

Moreover, the COPE Act does not give this policy statement any meaning or elaboration and actually prohibits the FCC from implementing any rules to better define or give any real guidance to network providers, Internet companies, or consumers as to what the statement means. 

Instead of protecting consumers with a statutory framework that network operators must follow, the COPE Act would force consumers and web-based entities to file a complaint at the FCC to enforce a vague policy statement.  The Markey-Boucher-Eshoo-Inslee Net Neutrality Amendment articulates a much clearer broadband policy and will preserve Internet freedom.