December 21, 2005 4:00 AM PST
Playing favorites on the Net?
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A similar bill proposed in July by Sen. John Ensign, a Nevada Republican, refers more directly to network neutrality by saying that broadband providers "shall not willfully and knowingly block access" to content. Amazon, however, said such provisions don't go far enough.
SBC, which recently purchased AT&T, created an uproar in the Net world last month with a bold pronouncement: The Googles, Microsofts and Vonages of the world shouldn't expect to freeload off its network.
"I ain't going to let them do that because we have spent this capital and we have to have a return on it," Ed Whitacre, CEO of the newly merged AT&T and SBC, told BusinessWeek magazine in a widely cited interview.
Charging subscribers higher prices for greater connection speeds is nothing new among Internet service providers. Most of the Bells, for instance, now offer tiered DSL plans that start in the $15 range for the slowest download speeds.
"It's similar to paying more to get an overnight package from FedEX or UPS vs. a lesser amount for three- or four-day delivery," said Joe Chandler, a BellSouth representative.
"We have always said that if they want to have, say, a bronze, silver, gold level of Internet access, essentially charging more for more bits...that's fine," said Amazon's Misener.
It's the idea of "impairing" access to content or services that makes companies like Amazon nervous. Misener said he could imagine "discreet" approaches in which a service provider could, for example, return a 404 page-not-found error for every 15th Web hit at a site that doesn't get premium treatment: "It's easy to do, and who is going to be blamed for it? Certainly not the intermediary but the end site."
"We are pleased that the network operators are investing in technology and innovation, and we are proud partners with them in offering content and services to the public," Paul Mitchell, an executive in Microsoft's TV division, told a House committee last month. "We just think that other companies should continue to be able to offer Internet content and services as well."
Not only e-commerce companies are voicing alarm over what they say is a lack of legal protections favoring network neutrality.
Trade association Comptel and about 60 representatives from member companies--including Internet service providers, VoIP sellers, and telephone companies that compete for customers with the Bells--signed a letter earlier this month voicing dissatisfaction with the draft House legislation.
The draft bill will sanction "Internet gatekeepers," wrote Comptel President Earl Comstock. He added: "Allowing this proposed bill to advance any further will undermine the Internet and pave the way for the Bell companies to re-monopolize the nation's communications networks."
No "significant evidence" of problem
Stalling any attempt to craft broad network neutrality rules is the fact that, despite small-scale incidents like Madison River, problems remain mostly theoretical.
FCC Chairman Kevin Martin told a roomful of communications company executives last week that his agency was hesitant to adopt formal Net neutrality rules because "there hasn't been significant evidence of a problem."
A study published by the free-market advocacy group Cato Institute in 2003 says that federal intervention is unwise and would infringe on property rights and limit business models. So did a paper by Christopher Yoo of Vanderbilt University law school. A counterargument (click here for PDF) by law professors Tim Wu and Lawrence Lessig, on the other hand, says the FCC should ensure the Internet remains as neutral toward applications as the electrical power grid.
When it approved the megamergers of SBC with AT&T and Verizon with MCI in late October, the FCC required both companies to adhere to a network neutrality policy for two years following the closing date of the mergers. Meanwhile, broadband companies have vowed for years that they're not interested in preventing access to legal content.
Aside from the Madison River case, examples are scarce. Missouri-based VoIP provider Nuvio has encountered "some issues" with broadband providers physically blocking Port 5060, the most common carrier of Net phone calls, but the company has managed to settle those complaints easily without turning to the FCC, said CEO Jason Talley.
Talley said he worries that broadband providers will instead take up filtering on "a more intelligent level," monitoring packets of information and then prioritizing or degrading certain content as they please. "Typically customers call in and complain about quality if they have problems like that," he said. "You try to fix it; you try to work with them on that. But at the end of the day, you either figure it out, or the customer cancels."
Even Amazon's Misener acknowledged that outright blocking of sites wasn't a problem now, and would not likely become one in the future.
But without legislative intervention, there's reason to fear that Net surfers may find a more restricted Web, Misener said: "What Mr. Whitacre's interview revealed was, I think he said two very distinct things. One is that the service providers have market power...and part two was, we intend to use it."
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