Telecom moves to House vote

The full House will soon be voting on a telecom reform bill that recently made it out of committee. The bill, writes PC World's Anush Yegyazarian is "a real boon for telecom firms that want to offer television services."

That's putting it mildly. The bill, the Communications Opportunity, Promotion, and Enhancement Act of 2006 (PDF) (COPE Act), does away with the whole idea of local franchises for broadcast services and creates essentially a national television franchise for IPTV services.

This bill tackles head-on one of the longstanding issues that complicates IPTV deployment, namely local franchising of TV services.As things stand, cable companies have to negotiate with individual counties and towns in order to get a foothold into their TV markets. Each of these local franchises has its own set of rules and restrictions, creating an overly complex and slow process for any newcomer into the market.

The COPE Act primarily does away with that local franchise process and creates a national franchise license for IPTV services. Cable companies would also be able to take advantage of the national franchises.

So that's one thing telecom companies want. Another thing is the right to charge a premium to high-volume content providers (Google, Yahoo, Microsoft, you get the idea.) That means relegating everyone else to the slow lane. As AT&T chief Ed Whitacre famously said:

Now what they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it. So there's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes? The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes free is nuts!

Bill sponsor Joe Barton (R-Tex.) is manifestly uninterested in government protection of the Internet as we know it. It's a job for .... the free market. The bill's expressly forbids the FCC from creating any rules regarding net neutrality. It doesn't get much better than that for Whitacre.

Yegyazarian's take:

I'm not one for draconian regulations, nor do I want to stifle the tradition of innovation that has made the Net so successful, the accusation that opponents of Net neutrality rules aim at those who want to protect the principle. But it seems to me that even if network operators don't actually kill off their content-provider rivals, failure to regulate this issue would end up stifling innovation because older, established firms will have the money to pay extra for top-tier preferential service, while smaller, innovative ones will be less able to do so.