Two Telecom Bills Form a United Front Against Discrimination

House Judiciary Committee Chairman John Conyers, Jr., (D-MI) and Internet stalwart Rep. Zoe Lofgren (D-CA), have added another element to the debate about how to ensure a free and open Internet.

Last week, they introduced legislation H.R. 5994, the “Internet Freedom and Nondiscrimination Act of 2008.” This bill provides a nice complement to HR 5353, the “Internet Freedom Preservation Act of 2008,” introduced by House Telecom Subcommittee Chairman Ed Markey (D-MA) and Rep. Chip Pickering (R-MS).

As so often happens in Congress, legislation tends to track jurisdiction. In real terms, a member of the House Judiciary Committee, looking at a telecom issue, will introduce a bill over which that committee has jurisdiction. The Conyers-Lofgren bill would subject Net Neutrality violations to the possibility of an antitrust suit – a subject area over which the Judiciary Committee has jurisdiction.

The Markey bill, by contrast, takes its authority from the Communications Act, which happens to be under the jurisdiction of the Energy and Commerce Committee. Markey’s bill add to the catch-all Title I of the Communications Act the principles of the Federal Communications Commission’s policy statement on the Internet, and non-discrimination language of the Act designed to apply to the telephone network as it was before the Commission decided that high-speed Internet services didn’t have the “burden” of carrying everyone’s traffic without interference, that is, as “common carriers.”

These two bills are not mutually exclusive. The Communications Act has existed since 1934 governing how the telecom markets in this country would function, for better or worse. For years, the FCC regulated the telephone industry, overseeing rates and subsidies, equipment and related issues. It was under the antitrust laws that the old Bell System was broken up into what were in 1984 seven Regional Bell companies and the long-distance AT&T. It was also under the auspices of the antitrust laws, thanks to Clinton Administration appointee Joel Klein, that the Bell System began to put itself back together when the Justice Department allowed Bell Atlantic to merge with Nynex in 1997.

The two laws, and two agencies (three if you count the Federal Trade Commission, which occasionally deals with mergers) have different standards to uphold. The Justice Department analyzes the effect of a company’s behavior, or a business deal, on how competition might be affected. The FCC has a broader “public interest” standard to uphold.

One more recent example is the newly reconstituted AT&T’s takeover of BellSouth. The Justice Department issued its relatively perfunctory statement approving the merger on competition grounds. The FCC, on the other hand, was able to impose some wider-ranging conditions, including a two-year term for Net Neutrality.

Even now, DoJ has approved the merger of XM Satellite Radio with Sirius Satellite Radio, while the FCC is contemplating what conditions to impose on the transaction.

In the Net Neutrality context, the Conyers-Lofgren legislation would provide a powerful weapon to be wielded not only against telephone companies, but also against cable companies. Under the antitrust bill, it would be illegal for any provider of broadband services “to fail to provide its broadband network services on reasonable and nondiscriminatory terms and conditions such that any person can offer or provide content, applications, or services to or over the network in a manner that is at least equal to the manner in which the provider or its affiliates offer content, applications, and services, free of any surcharge on the basis of the content, application, or service.”

For some reason, word has circulated on the Internets that the Conyers bill would require network operators to provide services for free – as in not charge for quality of service or other features. That’s not the case. The bill only says there can be no “surcharge” – the telephone or cable company can’t levy an extra charge to a non-affiliated company for the same service.

Markey’s bill takes a much wider view of broadband policy, saying that it is official government policy “to safeguard the open marketplace of ideas on the Internet by adopting and enforcing baseline protections to guard against unreasonable discriminatory favoritism for, or degradation of, content by network operators based upon its source, ownership, or destination on the Internet.” The bill would also direct the FCC to conduct proceedings to study the state of broadband services in the U.S.

At a May 6 hearing on the Markey bill, witnesses such as Shoebuy CEO Scott Savitz, Hollywood producer Steve Peterman and Free Press’s Ben Scott all pressed the idea that an open Internet provides economic opportunity, while the Christian Coalition’s Michele Combs said that Net Neutrality protects free speech.

Markey made it clear that enforcing Net Neutrality is a different issue from protecting illegal content online. “This whole idea that this legislation helps piracy is 100 percent wrong,” Markey told Mitch Bainwol, president of the Recording Industry Association of America. Markey said the point of the bill was to prevent network operators, like the telephone and cable companies, from using excuses such as “network management” to discriminate in their provision of service. He said the Bell System made the same excuses years ago when it tried to prevent non-Bell telephones from being used, with Ma Bell claiming that outside devices could bring down the network.

These bills all parts of enforcement of Net Neutrality and the preservation of an open Internet. In the unlikely occurrence that they, or something like them, are passed, then consumers, competitors or the government would have that many more tools to try to make certain the broadband carriers work in a pro-competitive way, in the public interest.