In the Know - April 27, 2006

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April, 27, 2006

Issues: 
Network Neutrality

a bimonthly Public Knowledge update

Contents:

This issue is also available via podcast here: http://www.publicknowledge.org/node/313

House Committee Approves Telecom Bill

As expected, the House Energy and Commerce Committee on Wednesday passed the legislation giving AT&T and Verizon the right to enter the cable business on a national basis while defeating an amendment to have some meaningful Net Neutrality language.

What wasn't expected, however, was the effect of the grass roots efforts and others who participated in pushing the Net Neutrality issue. The vote on the fine amendment by Reps. Ed Markey, Anna Eshoo, Rick Boucher, Jay Inslee and John Dingell to include a reasonable Net Neutrality policy lost by a respectable 22-34 vote. If the Congressional Black Caucus members, who traditionally side with telephone companies and the Texas Democrats voting with San Antonio-based AT&T had gone the other way, the vote would have been 27-29. The final vote on the bill was 42-12.

The markup showed how partisan the issue has become. In the past, telecom issues usually split the Committee by industry -- some were with local telephone companies, some with what was then the long-distance and competitive industry. That's changed. The House Democratic leadership has entered the fray, with Rep. Nancy Pelosi, the Democratic leader, starting her own "citizen petition" for Net Neutrality. In the committee markup on important amendments, Republicans stuck together to defeat most of the measures proposed by Democrats. By my count, through a session lasting only eight hours, only one Republican, Heather Wilson of New Mexico, voted with Democrats on a significant issue.

Attention will now shift to the House floor. The bill could be taken up by the House as early as next week. It's uncertain at this point whether the Net Neutrality amendment will be taken up by the full House, but it's possible. We should know early next week about the House schedule.

Watch our policy blog for details and updates.

We should mention that not all of the bill is bad. The bill preempts states from blocking municipal Wi-Fi operations. Telephone companies will get a national franchise to, one hopes, create more competition to cable. However, the Committee defeated several amendments to make certain that underserved areas get the benefit of competition. PK had testified to the Senate Commerce Committee that we backed the national franchise, although we thought that Net Neutrality should be a part of the deal.

The underlying text of the bill (not as yet introduced or numbered) is here: http://static.publicknowledge.org/pdf/20060412-house-telecom-print.pdf

We will post the bill with amendments when it becomes available.

Amazon, Google and Yahoo! On Notice

Leave it to Rep. Charlie Gonzales, who represents AT&T's home town, to leave the horse head on the bed.

At the end of the House Energy and Commerce Committee markup Wednesday, about 7 p.m. when people were leaving and everyone was tired, Gonzales introduced an amendment titled "Study on Internet Transparency."

The amendment would require the FCC to do a study of search engines. As he explained it to the Committee, the amendment would look at the state of competition in the Internet world, because "Web sites have special arrangements with paying partners."

According to the text of the amendment, the report would cover "preferential practices of the top five Internet search engines by usage and the top five electronic sites by revenue." The amendment would also ask for information on financial relationships between the Web companies and partners, on collection of consumer information and whether each site discloses to consumers the "special tying and other promotional relationships" the site has with others.

As Gonzales explained it, as long as the pro-Net Neutrality forces were looking at the potential tying relationships between telephone and cable companies and others, the same should go for the biggest Internet sites. It's obvious that the e-commerce and search engine markets are totally different from the broadband duopoly, and that Yahoo! has close relationships with AT&T and Verizon. The amendment lost, 11-43, and the only reason there was a roll call vote was that Gonzales saw that Committee Chairman Joe Barton of Texas favored it, and thought he could bring along some votes.

Barton didn't bring the votes, but that wasn't the point. There's an old saying that you're not paranoid if they really are after you. Gonzales said he decided to offer an amendment after reading an article about search engines in an airline magazine. It's also possible that AT&T had its own strategy in mind. It wanted to put the companies opposing it on Net Neutrality on notice; AT&T is sending a message to Google and the others that they will need to extend their already slender Washington resources to prevent intrusions into their own business practices, in addition to the already formidable task of taking on AT&T in Net Neutrality.

The Gonzales amendment is here: http://static.publicknowledge.org/pdf/gonzalez-amend-20060426.pdf

Senate Panel Tries Again on Content Controls

The Senate Judiciary Committee on April 26 held a hearing on legislation to require digital music services, including satellite radio, to compensate record companies for downloaded music. The bill, known as the PERFORM Act (S 2644) got a mixed reception. Edgar Bronfman, the chairman of Warner Music Group, said the bill was necessary to protect digital intellectual property. XM Radio Chairman Gary Parsons opposed the measure, calling it a tax on radio listeners and said it would stifle innovation. The artistic community was split, with singer Anita Baker saying artists should be compensated for their work, but rocker Todd Rundgren telling the Committee the legislation is "yet another futile attempt to turn back the clock."

Make no mistake -- this is a bad bill, another in a long line of bad bills ginned up by the content industry, combining the worst of government mandates with meddling in what should be an inter-industry dispute. It would wipe out much of the technological convenience in satellite radio services by banning recording based on items such as "automated recording, or playback based on specific programs, time periods, or channels as selected by the user." In other words, You couldn't record and playback broadcasts based on specific recordings, albums or artists. The bill would also require satellite broadcasters to use copy protection technology. In other words, you couldn't record the music you pay for each month to a satellite service. Or, to put it another way, it eliminates the satellite radio equivalent of your TiVO. The bill would also, as Gigi pointed out on our PK policy blog, wipe out noncommercial fair use recordings.

In an April 27 letter to Senate Judiciary Committee Chairman Arlen Specter, the Consumer Electronics Retailers Coalition said the legislation "is strictly a bill to limit the options of honest people. As such it poses a frightening and unnecessary precedent for constraining other private, noncommercial use by consumers -- including the use of digital home recorders such as those sold by CERC members."

A similar bill is due to be introduced soon in the House.

You can read the bill here: http://static.publicknowledge.org/pdf/s2644-109.pdf

You can also watch the hearing for yourself here: http://www.publicknowledge.org/node/311

Gigi Named EFF Pioneer

We are pleased and proud to announce that the Electronic Frontier Foundation has chosen Gigi to receive one of its coveted Pioneer Awards. The award will be presented at a ceremony in Washington May 3.

In announcing the award, EFF said Gigi was being recognized for being "PK's chief strategist, fundraiser and public face." Also receiving awards t