The protection of the Internet is expected to be back on the House floor today for the first time in three years. Granted, an observer would need the equivalent of a legislative microscope to find it, because the concept of an open, non-discriminatory network is buried deep in an $825 billion stimulus package.
In the grand scheme of things, the telecom portions of the stimulus bill don't amount to "a hill of beans in this crazy world," as Humphrey Bogart's character Rick Blaine once put it in a different context (Casablanca). No matter, except that it's our hill and our beans. Today (January 28), the House voted for the first time to protect even a small portion of the Internet from the ravages of large telephone and cable companies and to make access to the Internet more competitive.
For those of us who waited for a new day to advance the cause of preserving a free, open and non-discriminatory Internet, the language in the House stimulus package is a great first step toward reclaiming the Internet and establishing once and for all the concept that carriers can't discriminate. Legislation being considered by the Senate also will be helpful to advancing the cause. Senate Commerce Committee Chairman Jay Rockefeller (D-WVA) has proposed to include network-opening provisions in the Senate version of the stimulus.
Before getting to the details, it's important to realize that whatever open network and non-discrimination conditions are applied as part of the stimulus will be very limited in scope, applying only to projects generated as a result of grants, loans or loan guarantees made under the legislation. In concept, it is like the modest "open access" features in the auction for part of the analog TV spectrum. Wireless companies are only required to follow the limited open devices rules required by the Federal Communications Commission (FCC) in the block of spectrum designated for auction - not to the vast majority of cellphone customers.
Having said that, you have to start somewhere, and the stimulus bills (stimuli?) are as good a place as any. The House bill allocates $6 billion to broadband projects, half to be administered through rural telephone companies by the Rural Utilities Service (RUS) in the Agriculture Department and half through the National Telecommunications and Information Administration (NTIA) in the Commerce Department. Within the NTIA piece, $1 billion will go specifically for wireless projects and the rest for landline.
The advancement for network openness comes back at the end of the massive bill (House version), when it comes to the conditions for those receiving grants. Those getting the Federal bucks have to a) operate basic and advanced broadband service networks on an open access basis; b) operate advanced wireless broadband service on a wireless open access basis; and c) adhere to the principles contained in the FCC's broadband policy statement. The specifics of what constitutes "open access" aren't defined in the House bill. Rather, the House will punt to the FCC to define the term in the speed-record time of 45 days. The FCC will have to define other important terms, such as "unserved" and "underserved" as well.
Whether the FCC is led by interim Chairman Michael Copps, or by the presumed Obama Administration appointee, Julius Genachowski, the Commission will have a chairman attuned to the notion of an open network. One can't take anything for granted, but as the situation looks favorable at the moment. It's important to understand that open access isn't Net Neutrality, and it's certainly not the wide-ranging, basic Net Neutrality for which we continue to push. Open access has its own merit as a mechanism for creating new competition and should, as with Net Neutrality, be applied more widely as they had been before 2005 when the FCC closed off access to networks by competitors to incumbent telecom and cable companies.
The opponents of network openness have already started to beat the drums, even though more quietly than they usually do. The traditional Bell handmaidens were relatively circumspect as the stimulus moved through committee. At the Energy and Commerce Committee, Rep. Gene Green (ATT-TX), who traditionally voices the phone company concerns, said he was concerned about the open access requirements (and the speed requirements also in the bill). Neither Rep. Charlie Gonzales (ATT-TX) nor Bobby Rush (ATT-IL) spoke up.
None of the usual suspects offered amendments to strip the language, either during committee consideration or before the House Rules Committee for consideration on the House floor debate. Rep. Mike Simpson (R-ID) raised the flag during the Appropriations markup of the bill, saying that local carriers were already saying they couldn't participate in the grant process. But he didn't try to strip out the open-network language, either. House Commerce Committee Republicans said in their dissenting Committee report that the conditions in the bill "combine to discourage companies from participating in the stimulus plan."
The trade group representing the cellular industry, most of which is controlled by AT&T and Verizon, has already complained about the open access provisions, calling them "vague, undefined and unnecessary." That's fun coming from an industry that has to be driven kicking and screaming into a 1968 regulatory landscape in 2009 in which customers have the freedom to attach their own phones. The wireless industry still isn't there yet.
The Senate Appropriations Committee on Jan. 27 passed its version of the bill that also includes open-network language, although in different form. In the Senate bill, those companies or organizations which receive grants or loans would have to abide by "non-discrimination and network interconnection obligations" that would be included in a contract with the government to get the money. NTIA and the FCC would come up with the contractual language.
In both cases, the basic principle that public-interest groups have pressed for weeks has been followed - there should be no blank checks. The trade-off is that if companies or other groups receive government support, whether loans, grants or even tax credits, then the public gets something in return from companies that, by and large, are doing relatively well in this near-depression, as Verizon, which reported a strong fourth quarter.
The most dangerous part of this game has yet to occur. The House will pass its bill. The Senate will pass its bill. How the two will reconcile their differences is not yet known. A traditional conference committee is unlikely given the time constraints. The telephone companies and Chamber of Commerce have started complaining about the conditions, even though they haven't mounted a public challenge. Network openness champion Rep. Anna Eshoo (D-CA) noted during the Energy and Commerce markup that some Republicans and carriers were already complaining that the conditions might deter carriers from applying for grants. Eshoo, noting the "undistinguished" ranking the U.S. has in world broadband standings, said that network built with public funds should be open.
She's right, and vigilance will be necessary through the entire process. The best opportunity to strip out the progressive elements of the telecom provisions will be in the reconciliation process, much of which will take place behind closed doors.
It will be up to the champions of open networks to make sure those provisions stay in. At this point, it's not certain who will be at the table, particularly if there isn't a formal conference committee. Likely negotiators could range from the Speaker Pelosi (D-CA), to the Appropriations Committee Chairmen, Sen. Inouye (D-HI) and Rep. Dave Obey (D-WI) and members of their committees, as well as players behind the scenes, including Commerce Committee Chairs Rockefeller and Rep. Henry Waxman (D-CA). Representatives of the Obama Administration, which championed open networks during the campaign, also may be involved.
This is the first test. We want that little hill of beans to grow into something substantial and this is the place to start.