The House Commerce Committee held hearings today on the revised telecom reform bill, a draft that gives greater relief to the phone companies and waters down some of the earlier legislation’s language on network neutrality. During testimony, the most divisive issues raised by a Telecom Act rewrite, disparity in regulatory treatment between cable and phone companies and the idea of imposing network neutrality rules on broadband providers, stood out in stark relief.
As they pursue the video business, phone companies don’t want to be burdened by “legacy” regulations, such as 5% franchise fees applied to gross revenues or full franchise area build-outs, that cable operators have had to follow. SBC Senior EVP and General Counsel Jim Ellis endorsed the second draft of the bill, which reduces franchise fees for telcos to only a portion of total revenues, namely video services.
…the bill would tackle the issue of the extent to which cable franchise regulation, designed for the incumbent cable operators when they entered the market as monopolists, should apply to next-generation video services. By eliminating legacy franchise regulation for these broadband providers, the bill would create incentives for broadband investment, innovation and competition.
Michael Willner, CEO of cable company Insight Communications, toted the cable industry part line by arguing that “like” services should be treated alike.
First, like services should be treated alike, and all providers of those services should play by the same rules. What matters to consumers, and what should matter to policymakers, is not the technology used to provide services, but the services themselves.
Network neutrality got a good airing as well. Chris Putala, EVP of Public Policy at EarthLink, praised the inclusion of net neutrality provisions in both the older and revised draft bill.
Moreover, while a broadband network operator may offer its own high quality services and manage network and routing to do so, it cannot unreasonably impair or interfere with access to or use of other lawful Internet content, applications or services while doing so. These basic consumer empowerment principles will ensure that consumers can continue to have access to the services they want in the broadband marketplace.
But Putala wants Congress to strengthen the net neutrality provisions so that they apply to resellers of broadband service, and not just the network owners. Moreover, Putala raised the profile of a little-discussed but much-feared aspect of the current broadband network duopoly: phone companies and cable companies might not refuse access to competing services and applications, but they might give these competition options lower priority in transmissions.
The Subcommittee should make clear what I believe is the intent - that this provision does not permit, for example, a BITS [broadband Internet transmission service] provider to provide a higher capacity service only if the subscriber uses the BITS provider’s content or application. Moreover, if a BITS provider makes a network management decision (such as to prefer voice packets over video packets), that should apply to all voice packets, not just the BITS provider’s voice packets. Put another way, if a customer decides to purchase the right to use the “fast lane” service, it should be able to use the “fast lane” for all her applications and content, not just the applications and content that the BITS provider would prefer.
SBC’s Ellis was silent in his oral and written testimony about net neutrality rules, but the Democrats on the committee, namely Ed Markey (D-MA) and Rick Boucher (D-VA), pushed Ellis to agree that SBC would not hamper consumer access to competitive services over the “public Internet.” (Ellis kept stressing the “public Internet,” a curious locution that made me think SBC has something up its sleeve, like maybe its own “private” Internet.) [UPDATE on 11/10: Communications attorney extraordinaire Howard Symons, who was seated behind Michael Willner at the hearings and knows the inside baseball moves in this legislation’s drafting, told me that Ellis’ use of the term “public Internet” stems from complicated discussions in the bill’s drafting that have to do with carrier culpability for copyrights on the content transmitted over the Internet. It’s too complext to explain here, but Ellis wasn’t splitting hairs in his use of this term.]
For another take on the hearings, Drew Clark has an excellent summary in National Journal’s Tech Daily.
Cynthia Brumfield at 10:54 PM|Comments(0)
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