Recently the U.S. Senate Commerce Committee rejected a provision called Net neutrality that would have kept Internet network owners such as Comcast and A.T.&T. from creating premium lanes on the Internet for higher fees, and giving preferential access to their own services. Net neutrality was being considered as part of a new telecommunications bill working its way through the U.S. Congress. Analysts say the issue could have implications for Internet users worldwide.
At an Internet café in downtown Washington D.C, consumers enjoy the benefits of a free and unfettered World Wide Web. Up on Capitol Hill, lawmakers are debating something called Net neutrality, a provision of the new telecommunications bill that would keep network owners from controlling the content and services that flow over their network.
Ben Scott is Policy Director for Free Press, a consumer organization that advocates Net neutrality. "Net neutrality is a simple concept that lays at the base of communications law for the Internet. It is, simply put, non-discrimination. It means that if you own a network, you can't discriminate against the content or services that flow over your network."
But network owners, such as Verizon, Comcast, and A.T.&T. don't see it that way. Under Net neutrality they would have to continue charging all customers the same rate for use of their networks. They argue the marketplace should dictate cost -- and want the option to charge content companies at any rate they see fit, just as different banks set A.T.M. fees as they see fit. The network owners see Net neutrality as corporate welfare for Internet content companies such as Microsoft, Google and E-bay.
Scott Cleland is with Net Competition.org, a lobbying organization that represents network owners. "They want a special deal for just a few companies. And we don't think that is smart or the way to run the Internet. The best way to guard a free and open Internet is free and open competition, not regulating the Internet."
But the networks are not getting much support form the public. All the major U.S. consumer groups have endorsed Net neutrality. They say the network owners' opposition to Net neutrality has nothing to do with free market competition. Ben Scott says they are more interested in being able to selectively discriminate what they charge content providers. "You can make a pile of money if you can force every content provider on the Internet to pay you a double toll. Once to get on the Internet and once to reach customers at a guaranteed quality of service."
The consumer groups say if content providers are forced to pay more to network owners, they would have no choice but to pass those costs on to Internet users.
Scott adds, the cost will be borne by consumers. "If you want to guarantee that your site downloads then you are going to have to pay an extra fee. Are Google and Amazon and Yahoo just going to swallow hard and take that hit, take that money out their pocket and give it to Verizon? Of course not, they are going to pass those costs along to the consumer."
Convergence is another issue on the Net neutrality battleground. Both network owners and service provider companies are looking to expand into the other's businesses. The network owners want to get involved in e-commerce and compete with companies such as Microsoft, Yahoo, and E-bay. Likewise, the content providers want to move into the communications field by providing phone, television and movie services over the web.
Scott Cleland -- who represents the network owners -- argues that Net neutrality would regulate his clients out of the e-commerce business. "Right now Microsoft, Yahoo, and E-Bay, they are converging into the communications sector. What they want is regulation that prevents competition the other way that broadband companies shouldn't be able to converge, integrate and compete with e- commerce. We think that is a classic double standard and Americans can see that."
Consumer groups don't buy that argument either. They say what the network owners really want is the ability to control the marketplace as they move into e-commerce and compete with the big web content providers.
Scott says, "The Internet is already a free market. It is already doing its thing for consumers. What they are talking about is changing the free market into a market that has a gatekeeper. And the gatekeeper will be the network owner. The network owner will decide which websites work better and which don't. That is not a free market. That is a market dictated by the owner of the network. That's a monopoly market much like cable TV."
A Senate committee has rejected the Net neutrality provision as part of the larger telecom bill. Analysts say it is unlikely the full Senate will have a chance to vote on the bill before the summer recess.
What is at stake is the business model and structure of the Internet, as we know it. Web companies around the globe are watching what happens in the U.S., looking at the new Internet business model network owners are developing in the U.S. and contemplating whether it will be profitable for them.