Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Newspaper Article

    House Bill Tied to Higher Web Bills

    BY Eric Benderoff
    06/12/2006
    by Eric Benderoff on 6/12/06.

    A bill passed to open up local cable markets to more competition could lower cable bills but includes a controversial provision that might lead to higher charges to access the Internet.

    Late Thursday the House of Representatives passed sweeping new telecommunications legislation eliminating the need for programming providers to negotiate with individual communities.

    If approved by the Senate, the "national franchise proposal" could not only increase cable competition but also prompt phone companies like AT&T Inc. and Verizon Communications Inc. to speed up a national rollout of video services.

    Both consumer groups and business interests agree this is a good development that could lead to lower cable bills.

    "It will lead to new investment and a dramatic impact on consumer prices," said Matt Kibbe, president of FreedomWorks, a group that favors lower taxes and less government control.

    But the House bill also includes a controversial notion known as "net neutrality," an idea that providers should not be able to discriminate against certain competitors or users by limiting access or charging higher fees.

    The bill pushed by Commerce Committee Chairman Joe Barton (R-Texas) gives the Federal Communications Commission authority to enforce net neutrality principles and set fines of up to $500,000 for violations.

    Many Democrats, backed by a diverse lobby of content providers such as Google Inc. and Microsoft Corp., and users ranging from religious broadcasters to liberal bloggers, said this wasn't enough to maintain the Web's openness.

    "We are concerned for the future of the Internet," said Steve Worona, director of policy and networking programs for Educause, a group that represents the interests of universities. "The notion that the Internet would be gated will destroy the Internet as we know it."

    Worona said executives like Edward Whitacre, chief executive of AT&T, use terms like "my pipes" to describe the Internet.

    "That assumes that the Internet is his network and that we are privileged to use it," Worona said. "That is a radical departure from the way the Internet has developed, which is that everyone had access to everything on the Internet in a non-discriminatory manner."

    Rick Fox, an AT&T spokesman for Illinois, said his company is "pleased with the way the bill went through the House" and is hopeful the Senate will do something similar. AT&T is expected to roll out video services to Illinois customers later this year, he said, no matter what happens in the Senate. "Our timeline hasn't changed."

    Fox wouldn't comment on the possibility that AT&T will charge higher fees to firms like Google to use AT&T's network. "It's too premature," he said.

    Kibbe said it is possible that higher fees could be charged to Internet content providers in the future because consumers are paying the freight for developing the Internet. The question now, he says, is "how are you going to finance all of this pipeline that needs to be developed?

    "The consumer will pay for a certain speed," Kibbe said, "But if the Googles and eBays are clogging the pipe, and not paying the freight for that pipe, then consumers are getting a raw deal."

    Worona said that once a consumer has paid for Internet service, he should have access to everything he wants to use.

    Under some scenarios, consumer advocates say, it is possible that tiered pricing structures could be implemented by Internet service providers to restrict access to some sites by not allowing the customer enough bandwidth to watch a video at a Web site, for instance.

    "The House vote against net neutrality should be a wake-up call to those who care about the future of the Internet," said Jon Murchinson, a spokesman for Google.

    "We think as consumers and businesses realize that the House has actually voted to create a two-tier Internet, they will voice their concerns," he said.

    Also, it is conceivable that an ISP could block customer access to an Internet phone service provider unless the customer paid more because the phone service competes with a similar one offered by the ISP.

    The House passed the telecom bill 321-101 Thursday night. But passage by the Senate is not expected to be so one-sided.

    Kibbe doesn't think there will be enough votes in the Senate to block the net neutrality issue.

    John Windhausen, a telecom consultant and lobbyist in Washington, said a telecom bill has a "50-50 chance" of passage in the Senate. "And there are negotiations going on that could result in a brand new bill."