June 8, 2006 6:45 PM PDT

New Net neutrality plan may ruffle feathers

Internet companies that have been lobbying for stiff Net neutrality regulations might be having second thoughts right about now.

A new proposal in the U.S. House of Representatives takes the concept of mandatory Net neutrality that companies like Amazon.com, eBay, Google, Microsoft and Yahoo have publicly embraced--and extends it to, well, those same companies.

Rep. Charles Gonzalez, a Texas Democrat, has proposed an amendment (click for PDF) to a telecommunications bill being debated Thursday that says neither broadband providers nor commercial Web sites and search engines may engage in so-called discriminatory practices.

(Also on Thursday, the House rejected the original Net neutrality amendment aimed at broadband providers proposed by Rep. Ed Markey, a Massachusetts Democrat.)

In an unusual twist, Gonzalez doesn't even support the idea of mandated Net neutrality. Rather, his amendment appears to have been intended as a kind of poison pill that would force Internet companies to back away from their own requests.

Net neutrality's crowded field

Bill numberLead sponsor(s)What It ProposesStatus
S.2360Wyden (D)No two-tier InternetStill in Senate committee
S.2917Snowe (R) and Dorgan (D)No two-tier InternetJust introduced
HR5417Sensenbrenner (R) and Conyers (D)Antitrust extended to Net neutralityAwaiting House floor vote
HR5273Markey (D)No two-tier InternetStill in House committee *
HR5252Barton (R) and Rush (D)FCC can police complaintsAwaiting House floor vote
S.2686Stevens (R) and Inouye (D)FCC will do a studySenate committee vote expected in June

* Republicans have defeated similar language twice as an amendment to a telecommunications bill

Source: CNET News.com research

During the House floor debate that continued through Thursday evening, Gonzalez said enacting new laws would create "massive federal regulation by mandating conditions on how the Internet will evolve."

If enacted, Gonzalez's amendment would mean that the Federal Communications Commission would regulate Internet advertising, paid placement and content deals to ensure they take place in a neutral and nondiscriminatory way. That might prevent Amazon from entering into an exclusive relationship with Toys "R" Us, for instance, and could let Yahoo and Microsoft force Google to accept ads for rivals on its search engines. It also could prevent Google from declining certain types of controversial or negative ads, which is the company's long-standing practice.

In the line of fire
Critics of Net neutrality chortled on Thursday, saying that if Gonzalez's ideas gain traction, the Internet companies might have started a political steamroller that they lack the power to stop. (Network neutrality is the idea that all Internet sites must be treated equally by broadband providers.)

"Google has got to be worried about the direction this debate has gone in," said James Gattuso, a fellow at the conservative Heritage Foundation in Washington, D.C., who has written a paper criticizing mandatory Net neutrality rules.

Gattuso said of the liberal groups leading the Net neutrality charge: "I think they actually would regulate Google if that became feasible. They don't like big companies."

charles gonzalez
U.S. Rep.
Charles Gonzalez

For its part, Google says there's no parallel between enforcing Net neutrality for broadband providers--and Net neutrality for content providers.

"We'd say, respectfully, that it doesn't make sense: Net neutrality rules are needed because of the last-mile bottleneck. However, there is no parallel monopoly for online services," Google spokesman John Murchinson said in e-mail to CNET News.com.

Murchinson added: "The telcos and cable companies have a dominant market position due to their legacy ratepayer-subsidized grants of last-mile rights-of-way and a resulting monopoly or duopoly dominance...Most Americans can't get multiple competing broadband choices no matter how much they want them."

Microsoft declined to comment on the amendment, saying it had not taken a position on it.

Free Press, a Washington-based group that has often been critical of large telecommunications companies, has been one of the most vocal groups in favor of mandatory Net neutrality regulations.

But Free Press' policy director, Ben Scott, said his organization nevertheless opposes Net neutrality for Internet companies. Gonzalez's amendment "extends the principle of Net neutrality to content rather than the physical wires of the Internet. Those are two different things entirely," Scott said.

"The marketplace is so limited and we have two players and very high barriers to entry," Scott said. "By contrast, in the Internet content market, you have very low barriers to entry and multiple players."

Ray Gifford, president of the free-market Progress and Freedom Foundation and critic of Net neutrality, said Gonzalez's amendment "underscores how the logic of Net neutrality does not logically stop at the physical layer of the Internet, but rather demands regulatory oversight of the content and applications layers as well."

"The process ends at full-blown 'public interest' regulation of the Internet, which Mr. Gonzalez's amendment would accomplish," Gifford said.

The House Rules Committee did not permit Gonzalez to offer his amendment during the floor debate, which is expected to end with a vote on another Net neutrality proposal late in the evening.

See more CNET content tagged:
Net Neutrality, amendment, broadband provider, Internet company, regulation

5 comments

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If you can't beat'em....Poison em
So this how the Telecom Industry is dealing with the fact that almost everyone wants network (not content) neutrality.

The fact that their army's of PR firms, "think tanks" and Lobbists have failed to brainwash an educated public not willing to lay down in the face of corp greed? By having some Rep from Texas poison the bill by expanding it to the point it becomes illogical... C'mooooon you can do better than that. He is a Democrat for Pete's sake, no one's going to listen to him anway ;)
Posted by LarryLo (164 comments )
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Google and Company Wants Their Cake and Eat it Too
Typical Liberal malarky from the West Coast. Here you have a bunch of self-serving players on the Internet that want to regulate it to their liking and punish others that want to profit from it too. Phooey, I say. Keep it a level playing field and leave the government out of it like it's been so far.
Posted by WJeansonne (480 comments )
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And Keep Government out of the local TV Franchise Debate Too
Lets call a spade a spade...I am amazed how the Anti net Neutrality crowd (the Teleco mainly) use "keep government out of the internet" as one of the talking points.

Meanwhile, they are down on all fours BEGGING the Federal government to get involved with local TV Franchise rights agreements (which have been around since the beginng of Cable) instead of having to deal with the locally elected government as the cable operators had to. HILAROUS!

I am not saying its a bad idea (the franchise changes), I am just pointing out double standards.

I AM A CONSERVATIVE, I SUPPORT NET NEUTRALITY
Posted by LarryLo (164 comments )
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Google and Yahoo are lyng to you
Looks like the Google and Yahoo have no clue as to what it is they are actually for when it comes to "net neutrality" . The telco proposal has nothing to do with asking higher fees for the "last mile" to the consumer homes. The fees are for travel through faster broadband pipes before the content even gets close to your home. The net congestion that Google paying a higher fee to avoid happens long before the content gets to that last "mile" or whatever the distance is.
Posted by JohnnyL (89 comments )
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Hahahaha
This article was hilarious. Google, Yahoo, Amazon, Microsoft...I bet they are *VERY* worried about the direction that Net Neutrality debate is taking. I know I would be. I guess they didn't expect it to backfire in their faces like this. Sorry, I'm a fan a net neutrality, and I fully support it. If it means regulating companies of the likes of Google, then so be it.

If the likes of AT&T need money to expand their network, then they can charge their own customers, not someone else's.
Posted by Maelstorm (130 comments )
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