The Bad News is......

House rejects Net neutrality rules
By Declan McCullagh, CNET News.com Published on ZDNet News: June 8, 2006, 6:30 PM PT

The U.S. House of Representatives definitively rejected the concept of Net neutrality on Thursday, dealing a bitter blow to Internet companies like Amazon.com, eBay and Google that had engaged in a last-minute lobbying campaign to support it.

By a 269-152 vote that fell largely along party lines, the House Republican leadership mustered enough votes to reject a Democrat-backed amendment that would have enshrined stiff Net neutrality regulations into federal law and prevented broadband providers from treating some Internet sites differently from others.

Of the 421 House members who participated in the vote that took place around 6:30 p.m. PT, the vast majority of Net neutrality supporters were Democrats. Republicans represented most of the opposition.

The vote on the amendment (click for PDF) came after nearly a full day of debate on the topic, which prominent Democrats predicted would come to represent a turning point in the history of the Internet.

"The future Sergey Brins, the future Marc Andreessens, of Netscape and Google...are going to have to pay taxes" to broadband providers, said Rep. Ed Markey, the Massachusetts Democrat behind the Net neutrality amendment. This vote will change "the Internet for the rest of eternity," he warned.

At issue is a lengthy measure called the Communications Opportunity, Promotion, and Enhancement (COPE) Act, which a House committee approved in April. Its Republican backers, along with broadband providers such as Verizon and AT&T, say it has sufficient Net neutrality protections for consumers, and more extensive rules would discourage investment in wiring American homes with higher-speed connections.

The concept of network neutrality, which generally means that all Internet sites must be treated equally, has drawn a list of high-profile backers, from actress Alyssa Milano to Vint Cerf, one of the technical pioneers of the Internet. It's also led to a political rift between big Internet companies such as Google and Yahoo that back it--and telecom companies that oppose what they view as onerous new federal regulations.

As the final House vote drew closer, lobbyists and CEOs from both sides began stepping up the pressure. eBay CEO Meg Whitman e-mailed more than a million members, urging them to support the concept, and Google CEO Eric Schmidt on Wednesday called on his company's users to follow suit.

Defenders of the COPE Act, largely Republicans, dismissed worries about Net neutrality as fear mongering.

"I want a vibrant Internet just like they do," said Rep. Lamar Smith, a Texas Republican. "Our disagreement is about how to achieve that. They say let the government dictate it...I urge my colleagues to reject government regulation of the Internet."

The debate over Net neutrality had become more complicated after earlier versions of the COPE Act appeared to alter antitrust laws--in a way that would have deprived the House Judiciary Committee of some of its influence.

But in a last-minute compromise designed to placate key Republicans, the House leadership permitted an amendment (click for PDF) from Smith that would preserve the House Judiciary Committee's influence--without adding extensive Net neutrality mandates. That amendment to COPE was approved.

While the debate over Net neutrality started over whether broadband providers could block certain Web sites, it has moved on to whether they should be permitted to create a "fast lane" that could be reserved for video or other specialized content.

Prohibiting that is "not a road we want to go down, but that's what the Markey amendment would do," said Rep. Marsha Blackburn, a Tennessee Republican. "The next thing is going to be having a secretary of Internet Access (in the federal government)."