Billion-Dollar Buzzword

‘Open Access’ Spurs Carrier, Content Provider Fight

Posted January 27, 2009 at 6:17pm

Tucked 42 pages into the 647-page stimulus bill expected to hit the House floor today is a billion-dollar buzzword for the newest iteration in a protracted fight between telecommunications interests: open access.

In a variation of the net- neutrality fights of bygone Congresses, the new legislative push to free up portions of the nation’s broadband grid to competition is again making waves on Capitol Hill.

As in previous battles, the issue pits traditional telecommunications providers like Verizon and AT&T against Internet giants Google, Amazon and eBay, who in these tough times undoubtedly wouldn’t mind siphoning off business from the sturdy moneymakers.

And a lot has changed since the two sides locked horns last

Congress. First and foremost, current Energy and Commerce Chairman Henry Waxman (D-Calif.), a net-neutrality advocate, toppled longtime Chairman John Dingell (D-Mich.), whom one industry insider characterized as “a protector of the entrenched interests: the Bells and the cable providers.”

“Dingell’s no longer prominent, and Waxman obviously shares the open-access desire,” the source said.

In addition to the Energy and Commerce chairman’s support, the White House, too, appears on board this go-around.

President Barack Obama spoke frequently on the campaign trail about loosening the traditional broadband providers’ grip on the countless bytes that stream through the nation’s fiber-optic cables every day.

He also recently installed an open-access proponent, Julius Genachowski, as the new Federal Communications Commission chairman.

“Now they have Obama and Julius Genachowski at the FCC,” an industry insider said. “This is first manifestation of the new administration in net neutrality.”

Last week, broadband coalition U.S. Telecom Association thanked Waxman and ranking member Joe Barton (R-Texas) for allocating $3 billion in grant money to assure that high-speed Internet access is “universally accessible to all Americans.

“Achieving that national objective will require policies that encourage vigorous investment in both the sophistication and capacity of the nation’s broadband networks, as well as innovative public-private partnerships and a concerted, customized effort to reach remote pockets of our geographically vast nation,” U.S. Telecom President Walter McCormick wrote to the lawmakers last week.

But in his Jan. 21 letter, McCormick also urged Waxman and Barton “to avoid including conditions, restrictions or requirements that may inadvertently inhibit the new administration’s flexibility in expediting disbursement of funds for shovel-ready projects.”

Waxman must have skimmed over that part of McCormick’s missive.

Not 50 pages into its stimulus package, House appropriators ultimately set aside $2.8 billion “for grants, loans and loan guarantees for open-access broadband infrastructure in any area of the United States.”

For now, the language in the House bill appears to be a victory for Amazon, Google, YouTube, Internet telephone provider Skype and other companies that stand to profit if traditional Internet providers are barred from monopolizing the bandwidth spigot.

“The new networks must be open to all speech and commerce to maximize the social and economic utility of the infrastructure,” Open Internet Coalition Executive President Markham Erickson wrote to Waxman last week. “The open character of the Internet marketplace is what has fed the engine of economic and job growth in the information, communications and technology sector for over a decade.”

“This is a critical step forward and hopefully will be the beginning of a strong and consistent effort by Congress to keep the Internet fast, free and open,” he concluded.

The group’s membership also includes unlikely bedfellows Evite, U.S. PIRG, eBay, PayPal, Sony Electronics Inc., as well as online dating providers Chemistry.com and Match.com.

E-Copernicus’ Greg Rohde, who specializes in telecommunications startups, said the language may spur innovation, if it ever reaches Obama’s desk.

He called it a good first step, “a good thing for consumers,” but he warned that federal agencies in charge of administering the billions of dollars in federal largess may have the final say.

“The theory behind it is that it would increase innovation,” Rohde said, adding that “there are a number of open questions about how it will be defined.”

A telecom lobbyist said privately that broadband providers are confident the overly specific language in the House bill will not make it into any final version received by the White House.

Rep. Rick Boucher (D-Va.), the new chairman of the Energy and Commerce Subcommittee on Communications, Technology and the Internet, did not respond to requests by Roll Call to discuss the bill’s open-access language and its prospects for final passage.

Boucher took the subcommittee’s reins this month from longtime net-neutrality proponent Rep. Ed Markey (D-Mass.), the new chairman of the Subcommittee on Energy and the Environment.

The lobbyist also said the sector is concerned that providers may be shut out of the process, arguing that “at the end of the day, this is a jobs bill and about deploying broadband.”

“Wouldn’t you want to talk to [broadband providers] to see what works for them, instead of including language that’s a disincentive?” the source said. “It’s a little odd.”