Microsoft, Google fight Web bill

Thursday, March 30, 2006

By MOLLY PETERSON
BLOOMBERG NEWS

Microsoft Corp. and Google Inc. say language included in a U.S. House bill doesn't go far enough to protect them from fees that Internet service providers might charge for delivering their content.

The draft proposal released this week in Washington by House Commerce Committee Chairman Joe Barton, R-Texas, contains a "net neutrality" section that lets the Federal Communications Commission take action against Internet providers if they block access to certain Web sites or services. Content companies also want to transmit information without incurring additional costs.

"This bill sends a bad signal to those companies spending billions of dollars to invest in Internet content," said Gerard Waldron, an attorney at Covington & Burling in Washington, D.C. Waldron is fighting the legislation for Microsoft and Mountain View, Calif.-based Google, as well as Amazon.com Inc., eBay Inc., Yahoo! Inc. and IAC/InterActiveCorp.

Phone and cable companies have also spent billions building networks and may seek to recoup some of those investments by passing costs on to content providers. Companies such as Google, the most-used search engine, get advertising with video and other Web content.

The neutrality issue is emerging as lawmakers rewrite the Telecommunications Act of 1996.

The proposal by Barton would help phone and Internet service providers, including AT&T Inc. and Verizon Communications Inc., introduce television services faster and let the FCC enforce a broadband policy statement it adopted in August. Waldron said it bars the panel from "explaining, further defining, or explicating what these principles are."

The FCC'S 2005 policy statement says consumers are entitled to access legal Internet content, applications and services of their choice.

It also says there should be competition among companies to sell access, applications, services and content.

Gigi Sohn, president of the consumer advocacy group Public Knowledge, said Barton's bill wouldn't prevent phone and cable companies from degrading the quality of some Internet content.

"We are deeply disappointed that the current draft telecom bill includes watered-down net neutrality language that will do little, if anything, to ensure the open and vital Internet we have come to expect," Washington-based Sohn said in a statement.

Providers of high-speed Internet service, including San Antonio-based AT&T, New York-based Verizon and Comcast Corp., have pledged not to block access to legal Internet content or services. Telephone and cable industry representatives say net neutrality rules would stifle investment in high-speed networks.

"We continue to believe that the better course is for the government to resist injecting itself into a thriving, dynamic market where investment and innovation are flourishing," Kyle McSlarrow, president of the Washington-based National Cable & Telecommunications Association, said in a statement March 27 after Barton released his draft.

The tougher neutrality rules sought by companies including Google and Microsoft are unlikely to become law, said Blair Levin, an analyst at Baltimore-based Stifel Nicolaus & Co.

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