Inouye Slams Senate’s Latest Telecom Reform Draft

Committee staff earlier in the day described the new draft as a compromise that reflected views of numerous committee members. While network neutrality provisions gained the most attention, the new version includes dozens of changes, all reflecting efforts to better reflect the views of committee members, a committee aide said.

Despite Stevens’ attempt at compromise, the committee expects numerous amendments to be proposed by the deadline today (Tues.). Some of those amendments may be added to the manager’s amendment that will be considered during markup Thurs., others will be considered separately during markup, which is expected to be lengthy.

Some of the changes are tweaks but others are quite significant. One would preempt state regulation of wireless services, a move that Inouye said would eliminate “the ability of state governments to protect consumers from unscrupulous billing and marketing practices by cell phone operators.” However, a committee aide said the measure sought to correct the burden on national wireless carriers to deal with divergent bills and laws throughout the country (see related story).

Another new provision would require broadband access providers to offer their service separately from other services such as voice, an issue sometimes called “naked DSL.” One of the most unusual provisions would make the U.S. Appeals Court, D.C., the primary court to hear appeals of communications regulatory issues. A committee aide said the court measure grew out of concern about industry parties “forum shopping.”

Stevens had enough votes to pass the earlier net neutrality provision that simply required the FCC to submit reports on the controversial topic but he wanted to do more, a committee aide said during a briefing for the news media. The latest version goes further in specifying a “consumer bill of rights,” with fines outlined for violations. The measure looks at the issue from a consumer’s standpoint, for example barring ISPs from blocking content and assuring consumers can go to any web page or run any video applications they want. However, it doesn’t get involved in battles among industry giants, another aide said. As a result, the measure doesn’t include “nondiscrimination” or pricing language sought by net neutrality proponents.

Inouye said the new net neutrality provisions don’t go far enough: “Network operators will have the unfettered capacity to discriminate against unaffiliated online content, degrade [consumers'] quality of services or impose steep charges for prioritized traffic.”

Other changes in the latest draft: (1) VoIP was declared an interstate service, a definition that’s important for the imposition of common carrier regulation. (2) A few changes were made to an audio flag provision and a committee aide warned that the related broadcast flag section isn’t safe from changes during markup because many members don’t like it. (3) A section on white spaces was “tweaked.” (4) A few minor changes were made to the video franchising sections but committee staff emphasized that no buildout provisions were added. (5) Eliminated sports program access requirements that had been contained in the previous draft. The issue involves whether cable providers have to make terrestrially-delivered content available to satellite competitors.

Sens. Snowe (R-Me.) and Dorgan (D-N.D.) still plan to introduce their strict net neutrality measure (S-2917) as an amendment to Stevens’ bill at Thurs.’s scheduled markup. Snowe believes the new Stevens language “only takes minimal steps to protect consumers and does not go far enough to prevent the creation of a discriminatory 2-tiered Internet,” a spokeswoman told us. A Dorgan spokesman said “there are things that need to be done to preserve Internet freedom that this new draft does not do.” Support is growing for S-2917, he said. Among other inadequacies, the Stevens bill bars the FCC from taking any real action to prevent discrimination, he said. More than 700 groups have vouched for the Snowe-Dorgan proposal and last week in 2 separate deliveries, their offices received over a million petitions and letters backing S-2917, an aide said. On the previous day, 175,000 pro-net neutrality letters arrived on Dorgan’s doorstep, he said. S- 2917 is backed by Inouye.

The It’s Our Net Coalition, backed by Intel, Amazon.com, eBay, Google, InterActiveCorp, Microsoft and Yahoo, said Stevens’ “deal” on net neutrality is a myth: “Don’t be fooled by claims of ‘compromise.’ This latest Senate draft may be dressed up in a new outfit but underneath, the language remains the Internet Bill of Wrongs instead of an Internet Bill of Rights that Internet users deserve.” The new version does nothing to prevent network operators from creating a 2-tiered, pay-to-play Internet and won’t protect U.S. Internet users and small businesses from discrimination, the coalition said. “The Internet still ends up split into Lexus lanes and dirt roads, and an FCC [is] rendered powerless to protect American consumers,” the group’s officials said.

NCTA said Stevens was right to “focus on the consumer” in framing net neutrality language and said the new draft “wisely refrains from adopting new, heavy-handed regulations on program access.”

The redraft’s net neutrality provisions are “nothing more than a restatement of the principles that the FCC put forward last year, which are [sic] completely inadequate,” Consumers Union Senior Policy Analyst Jeannine Kenney said. The Internet freedoms laid out by the Commission and the new bill language don’t address the subtle impacts of network discrimination, which is the true concern for consumers, she said. The redraft also doesn’t let the FCC meaningfully address discrimination, she said. “It’s like asking a court not to ever adjudicate a constitutional issue,” Kenney said. If passed, Stevens’ latest attempt “would be worse than the current law because we believe the FCC does have authority right now to implement regulations that would provide for more concrete protections for consumers,” Kenney said: “The bill gets worse with each redraft.”

Stevens’ latest version is “a reasonable, middle-ground compromise to protect Internet openness” because it strengthens the Commission’s existing authority to ensure consumers’ online rights, Hands Off the Internet (HOTI) Coalition Co-Chmn. Mike McCurry said. HOTI is backed by AT&T, Alcatel, the National Assn. of Mfrs., and the American Conservative Union and others opponents of the net neutrality crusade. The redraft won’t result in “overreaching federal mandates that tie down new online services and progress in broadband deployment,” said McCurry, once President Bill Clinton’s spokesman. Stevens’ bill dovetails nicely with the House-passed bill, which mandates tougher penalties against Internet providers that violate users’ rights, he said.