June 9, 2006, 12:00 AM

House bypasses `network neutrality` in passage of video services bill

The U.S. House of Representatives voted yesterday to pass a video services bill without a controversial clause intended to protect the independence of the Internet from major telecommunications companies.

 

The U.S. House of Representatives voted yesterday to pass a video services bill, the Communications Promotion and Enhancement Act of 2006, without a controversial “network neutrality” clause intended to protect the independence of the Internet from major telecommunications companies.

Proponents of the network neutrality clause criticized the action as a failure to protect the open nature of the Internet from telecommunications companies that have expressed an interest in charging fees for a multi-tiered system of Internet usage. (See “Tug of War.” http://www.internetretailer.com/article.asp?id=18399)

“Net Neutrality remains a critical underpinning of the Internet,” a group of Internet companies including Amazon.com and IAC/InterActiveCorp said in a combined statement. “Without it, the unparalleled success of the Internet is threatened.”

But the Competitive Enterprise Institute, an industry group that supports the telecommunications companies, said a network neutrality law would restrict consumer choice while reducing the financial incentives for telcos to invest in Internet infrastructure. “A market in which Internet service providers aren`t allowed to prioritize the content traveling over their networks is one with less innovation and fewer benefits for everyone involved,” the CEI said.

Proponents of network neutrality, however, say they’re optimistic that the issue will continue in the Senate, where a bi-partisan bill supporting network neutrality has been submitted by Senators Olympia Snowe (R-ME) and Byron Dorgan (D-ND).

The Consumer Electronics Association, however, lauded the video services bill for the impact it can have on broadening consumer choice in online video services. “This bill establishes a nationwide franchise process and removes unnecessary regulatory barriers for telecommunications companies to enter the video services marketplace,” the CEA said.

 

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