Analyst Booted Off Net Neutrality Conference Call

Tne Net Neutrality debate has just begun to heat up, now that a bill that would favor telcos and which is opposed by major web companies has passed by a 3-to-1 margin in the U.S. House of Representatives.

One technology industry analyst found part of the debate to be very warm indeed when he started to question the tactics of a pro-Net Neutrality group during a media conference call. Marc Farley (pictured), who runs the research company IDIX, Inc., and who has provided special reports for SYS-CON Media in the past, was disconnected from a conference call being held by a coalition of companies who opposed the recently-passed bill when his tone and line of questioning were apparently perceived to be out of line.

The call was held by www.itsournet.org, which describes itself as "a broad coalition of consumers, grassroots groups and businesses working together to preserve the Internet and Net Neutrality." The website does list a number of groups behind this coalition, but lists only the decidedly non-grassroots companies Amazon.com, eBay, Google, IAC/InterActiveCorp, Microsoft and Yahoo as its financial backers.

Farley reports that he questioned the group's strategy, and later said "I think my mistake in today's call was that I was perceived as taking sides." Even though the group apparently perceived him taking sides with them rather than against them, they disconnected him after he mentioned that he was an analyst rather than a media representative per se.

Wearing his analyst's hat, Farley told SYS-CON that "if we want a lousy Internet we should continue to underfund it, and Net Neutrality is one way to guarantee insufficient funding. That said, I don't think the network companies have such improvements in mind with their current legislative efforts. But as a key infrastructure for all aspects of our societies, we can't afford to be make mistakes one way or the other. An expanded dialogue that looks at the Internet's role as an infrastructure could be interesting." Farley is based in San Jose, CA, is an independent analyst and researcher, and receives no funding from anyone involved in this debate.

Technology analyst Peter Suderman of the DC-based Competitive Enterprise Institute issued a statement which, in part, followed Farley's contention about Internet funding, stating that passage of Net Neutrality legislation would "dramatically reduce the financial incentives of telecommunications companies to make the massive investments needed to upgrade and expand the nation’s IT 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 describes itself as "a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government."

The recent debate centers around HR5252, a piece of legislation authored by Rep. Joe Barton (R-Tex.)  (pictured) and passed by the U.S. House of Representatives on June 8 by on a 321-101 vote. HR 5252 is known as The Communications Opportunity, Promotion, and Enhancement (COPE) Act of 2006. It was supported my almost all House Republicans and a large number of Democrats, and comes in the wake of FCC and court decisions.

An amendment to this bill, sponsored by Rep. Edward Markey (D-Mass.), was rejected 269-152, with 14 members not voting. The amendment would have put backers' view of what Net Neutrality is into HR5252. Markey said "we are making progress, and although we did not prevail tonight, we intend to prevail in the end," in an official statement. "Net Neutrality is as basic to the function of the Internet as non-discrimination is to the U.S. Constitution. We will win because we must."

The bill would allow telcos to enter national broadband markets to offer multiple services. It also addresses Net Neutrality in that it frees the telcos to regulate access to its broadband pipelines. The crux of this matter is that these newly unleashed telcos, a group of monopolistic thinkers who unerringly aim for maximum control of their markets, will be free to set broadband speeds and access rates depending on the requirements of individual businesses.

This means that massive Web companies such as Yahoo et al could incur significant new operating expenses. It also means that smaller companies will no longer be able to provide the same throughput speeds for their sites if they can't afford to pay for them, thereby unleveling the playing field for smaller start-ups who compete with the big dogs, and thereby removing the status quo and the "Net Neutrality" from the Internet, in the view of this legislations' opponents.

Appeals against HR5252 and the related legislation that will be taken up by the U.S. Senate have been made in recent weeks by groups associated with both traditional liberalism and conservatism in the U.S. (see related story.)  Unlikely bedfellows such as the Christian Coalition and FreePress can be expected to continue to stay close as the related Senate bill, S.2686, introduced by Sen. Ted Stevens (R.-Alaska), wends its way through the World's Most August Deliberative Body.

Statements opposing HR5252 and S.2686 has come from industry and political leaders as well.

eBay CEO Meg Whitman, for example, reportedly e-mailed more than one million of the company's members seeking their support of Net Neutrality. Google boss Eric Schmidt (pictured) released an open letter on the eve of the Houe vote stating that "the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. Creativity, innovation and a free and open marketplace are all at stake in this fight." And no less a personage than Web creator Tim Berners-Lee spoke of entering a "dark period" if telcos are allowed to set traffic priorities among their customers.

House Democratic leader Nancy Pelosi (D-Calif.) was more flamboyant, stating that "when Lewis and Clark made their historic journey of discovery two centuries ago, information could only travel at the speed of the fastest horse. Now information travels in an instant. And just as railroads and highways did in the past, broadband has dramatically increased the productivity and efficiency of our economy and will continue to do so in the future. It has created jobs today, and will create even more jobs tomorrow."

Pelosi (pictured) said that HR5252 "strikes at the heart of the free and equal nature of the Internet and would fundamentally change the way the Internet currently works. America's small businesses and entrepreneurs could be left in the slow lane with inferior Internet service, unable to compete with the big corporations that can pay Internet providers toll charges to be in the fast lane. Bloggers, our citizen journalists, could be silenced by skyrocketing costs to post and share video and audio clips."

The brouhaha comes in the wake of FCC decisions dating to 2002, when it first allowed telcos to restrict access to who canuse their DSL lines, a decision upheld by the U.S. Supreme Court. Then last August, the regulatory body, under new Chairman Kevin Martin (who replaced Colin Powell's son Michael Powell), put telcos' broadband networks on the same playing field as cable modems and issued a generalistic list of consumer's rights to choose. The current Congressional debate is aimed to define specifically what all this means to business and consumers.

Suderman, quoted above, sides with the opponents of "Net Neutrality," also known as the proponents of "Consumer Choice." He released a statement congratulating House members who voted against Markey's amendment, saying that "despite a considerable volume of misleading rhetoric from proponents of neutrality legislation, House members were able to see the provisions for what they were – a regulatory power grab that would have made the disastrous error of putting the federal government in charge of managing Internet traffic."

Two other commentators should probably be left to have the last words (at least for the time being) regarding the debate. SYS-CON's Web 2.0 Journal Editor-in-Chief Dion Hinchliffe, who is based in the Washington, DC area, said "the Internet has always been at the mercy of the kindness of strangers, and Net Neutrality has been a kind of benevolent phantasm that many people believe actually exists today. It doesn't. Desirable as true neutrality would be however, explicitly eliminating it would be a minor disaster for the global user base of the Internet, but one that it would probably route around eventually."

Add to this PC Magazine Columnist and blogger John C. Dvorak's (pictured) ever-so-slightly jaundiced take: "The problem with Net Neutrality is that it's basically idealistic since it assumes the ill-informed public-at-large actually cares about the issue. It also assumes that officials are not bought and sold by the big carriers. I don't think it has much of a chance."