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State Laws/Franchising

Antitrust Law Aimed at Net Neutrality

4/28/2006 10:37 AM Eastern

Two House Democrats are drafting a bill designed to impose antitrust penalties on broadband-access providers that attempt to demand fees from Web-content providers in exchange for priority treatment of their search, shopping and information-retrieval services.

The legislation, still in draft form, is being developed by Reps. Rick Boucher (D-Va.) and Zoe Lofgren (D-Calif.), members of the Judiciary Committee.

Boucher co-sponsored a network-neutrality amendment last week in the Energy and Commerce Committee that would have banned cable, phone and other broadband-access providers from blocking or degrading Web services and from demanding fees to secure priority treatment of their content and applications. The amendment failed, 34-22.

Defeat in the Energy and Commerce panel has prompted Boucher and Lofgren to consider pursuing network-neutrality legislation in the Judiciary Committee, which has jurisdiction over the country's antitrust laws designed to stop mergers that would create monopolies and to prevent firms with dominant market positions from abusing their power.

“I can tell you that I am working with Zoe Lofgren, and she and I have drafted some preliminary language. That’s as far as we have taken it,” Boucher said Thursday. “We would simply make it an antitrust violation with normal antitrust enforcement if there were a violation of that provision.”

Depending on how the bill is written, antitrust violations can carry criminal or civil penalties, including prison terms for criminal violations and heavy fines for civil offenses.

The Energy and Commerce Committee bill would allow the Federal Communications Commission to police broadband-access providers to some extent. But it would not explicitly prohibit high-speed-data-network owners from demanding compensation from bandwidth-intensive Web sites -- an omission Boucher and others in Congress believe could produce drastic changes in how consumers experience the Internet.

“I think network neutrality is a highly important principle. We did not get to where we need to be during [Energy and] Commerce Committee consideration, so I am going to use whatever tools are at my disposal to try to win that debate at the end of the day,” Boucher said. “If that involves encouraging the House Judiciary Committee to move its own legislation on the subject, that’s what I will do.”

Cable and phone companies vigorously opposed the net-neutrality amendment sponsored by Boucher and Rep. Edward Markey (D-Mass.) in the Energy and Commerce Committee. The two industries complained that regulation was premature because Internet business models were still evolving and no one had documented nakedly discriminatory conduct by broadband-access providers against companies like Google Inc. (www.google.com), eBay Inc. (www.ebay.com), Yahoo! Inc. (www.yahoo.com) and Amazon.com Inc. (www.amazon.com).

“The marketplace is working well to bring consumers the services and features they want at prices they can afford. Lawmakers should be very reluctant to replace that flexible, market-driven success story with a system of intrusive regulation,” National Cable & Telecommunications Association president Kyle McSlarrow said in an April 25 letter to House Energy and Commerce chairman Joe Barton (R-Texas).

Boucher has often argued that Congress had to establish rules now before network owners used their market power to define the Internet marketplace in ways that future legislation would have difficulty unwinding.

“Broadband providers typically exercise market power over transmission,” Boucher said. “What we are trying to do is keep them from extending that market power into the control of content.”

September