The new telecommunications bill before Sen. Ted Stevens' Senate Commerce Committee this week has been touted as reform of the cable-franchise laws. But it is much, much more. The bill is really a wholesale rewrite of the Telecommunications Act of 1934, the world's oldest existing telecom law. It is probably the most important piece of legislation the Congress will take up this session.
Living in the Silicon Forest, we've come to take certain things for granted. Our tech startups and venture-capital firms have learned to assume that Internet and telecom networks will be a platform for innovation open to anyone who can pay the freight for success. Workers have come to rely on fast and plentiful Internet access open to any type of device or application. Major retailers like Amazon, REI, Powell's Books and PC Connections have come to rely on the Internet as a route into the living rooms of customers all over the world.
Under Stevens' bill, all that will change. The telecoms will be able to split Internet access into premium lanes, segregating access to customers based on the content, origin and purpose of the data or bits. Amazon will have to pay the network operator for access to customers, finally legitimating the dream of telecom executives to tax the eyeblinks of every user. Apple will have to pay the networks to allow its customers to download iTunes music and video. If it chooses, the network can simply block iTunes music or Amazon book purchases, redirecting customers to another service the network operator prefers. In fact, there is no guarantee that Internet access, as we know it today, will continue to exist at all.
The thousands of startup visionaries living in the Northwest might want to find their passports, because creating new business models in the U.S. will become much more complicated, and expensive. In the rest of the developed world, it won't be a problem, because every developed country has a strong network-neutrality law in place, extending not just to the Internet, but also to mobile networks, cable TV and television. Stevens' bill puts the U.S. out of step with the rest of world, a world that is fast passing us in productivity, the knowledge economy and broadband connectivity.
The telecom and cable duopoly arguse that it's necessary to impose a monopoly business model on the Internet in order to generate enough profits to upgrade the existing infrastructure and roll out new advanced services to the public. To date, the U.S. government has provided more than $200 billion to these companies as an incentive to upgrade their networks to the international norm.
We haven't seen much in return for this "free lunch." The duopoly enjoys below-market rates for tunneling under the sidewalks and streets, or hanging its wires in front of views. Still, the public has seen no competition to speak of, and the network operators shut out the many thousands of companies that tried to provide competition in the past 10 years.
The purpose of Stevens' bill is not to bring competition in cable TV or the Internet. There has never been any barrier to local competition, except the desire to compete. The purpose of the bill is to roll back the middling efforts at competition that Congress has enacted over the past two decades.
Leaders of the telecom and cable duopoly tell us to trust them, because this time they really mean it, competition and advanced services will come ... in 10 to 12 years. After all, their Astroturf Web sites and push polling tell us, you can't trust the government, so you are left with the cable and phone companies as your only friends. This means we're in big trouble.
The telecom and cable duopoly will find its respective monopolies enshrined in the law, with no obligation to play fairly with new entrants to the market (there can't be any under Stevens' bill), no requirement to carry traffic for "freeloaders" like YouTube, iTunes, Amazon, Real Networks or MSN, and no fear of future entrepreneurs like Jeff Bezos, Sergey Brin or Craig McCaw horning in on the action.
Local franchising is only a small piece of this bill, and, yes, it needs reform. But it is dead wrong to claim that local franchising authorities have stifled competition. Any company that wishes to enter any community may do so at any time, and that has been the law for decades.
It would be a waste of valuable ink to reiterate the virtues of a free and open Internet. They are demonstrated every day in the pages of this newspaper, and in its excellent Web site and online news services. But we stand a very good chance of seeing these important democratic tools disappear, or at least be far less effective than the alternative.
The alternative is real. Every other major developed country has strong network-neutrality laws in place, far stronger than anything the Congress is considering in any of the many amendments to Stevens' bill.
Because these countries have strong laws, keeping the networks open to competition and free for any budding startup to use, they have far surpassed the U.S. on the information highway. They have faster networks, lower fees and more-advanced services like IPTV, distance learning, and remote medical and security monitoring. Their networks are more reliable and secure, because reliability, security and speed are built in.
While not as tangibly exciting as the space race, or with the threatening specter of Sputnik circling overhead, our national efforts to move into a 21st-century knowledge economy are every bit as important. This is a race we do not want to lose; it is a race we cannot afford to lose.
Michael Weisman is a Seattle attorney and expert in telecommunication law and policy. He is a policy adviser to Reclaim the Media and other public-interest groups.
© 2006 The Seattle Times Company