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SNOWE SAYS “COMMERCE COMMITTEE’S INACTION WILL CHANGE THE INTERNET AS WE KNOW IT”

Contact: Antonia Ferrier (202) 224-5344
Thursday, June 29, 2006

WASHINGTON D.C. – An amendment offered to the Communications, Consumer’s Choice, and Broadband Deployment Act of 2006 by U.S. Senators Olympia J. Snowe (R-Maine) and Byron Dorgan (D-North Dakota) to preserve the fair treatment of all Internet content was defeated in the Senate Committee on Commerce, Science, and Transportation, by a tie vote of 11 to 11.

“Allowing network operators to discriminate against specific websites and Internet content will change the very nature of the Internet forever,” Snowe said. “There should be no underestimating the significance of that change or the impact it will have on the Internet as we have come to know it, and I am disappointed by the committee’s vote today. Net Neutrality and equality is one of the founding principles of the internet. It guarantees the unfettered, unfiltered, collection and dissemination of ideas and ideals. This legislation would not, as some have suggested, protect companies like Google, but rather ensures the next Google has an opportunity to succeed. Today’s decision does not serve the interest of the nation, the consumers of today, or the internet users of the future, and I am hopeful the mistake made here today can be undone before the full Senate.”

Snowe’s amendment modified section 903 of the “Consumer Internet Bill of Rights” included in the communications reauthorization bill passed by the House of Representatives earlier this month, inserting the four principles of non-discrimination as outlined in Federal Communications Commission’s network neutrality policy statement:

· Consumers are entitled to access the lawful Internet content of their choice.

· Consumers are entitled to run applications and services of their choice, subject to the needs of law enforcement.

· Consumers are entitled to connect their choice of legal devices that do not harm the network.

· Consumers are entitled to competition among network providers, application and service providers, and content providers.

and added the following non-discrimination principle:

To encourage broadband deployment, and preserve and promote the open and interconnected nature of the Internet, a broadband service provider shall not discriminate Internet traffic based on source, ownership, or destination of such traffic as part of any publicly available Internet offering.

Senator Snowe made the following statement today at the Senate Committee for Commerce, Science, and Transportation in support of the non-discrimination amendment:

The amendment I’m offering today is actually very simple. It ensures that the Internet as Americans have come to know it...the Internet that has been the greatest unrestricted forum for ideals the world has ever seen...the Internet that improves U.S. productivity by adding nearly $500 billion to our Gross Domestic Product every year...remains as it is today – an open marketplace of ideas and commerce whose control rests in only one place – and that is, the hands of the user. Indeed, net neutrality is a founding principle of the Internet.

It ensures that all Internet users have equal ability to view the content and applications of their choice. Net neutrality protects users’ rights and freedoms to view websites without restriction, or regulation by the government or network operators. It ensures no discrimination based on site content or financial arrangements. That’s why the Internet became an instant gateway to providing and accessing content in any geographic location of the world in the first place —regardless of the financial resources possessed by the content providers.

And there should be no mistake – as this is merely the second time that Congress is comprehensively re-writing our nation’s communications policy since it was first instituted in 1934, what we do will be transformational, with implications that will reverberate for decades. And we should be mindful that, it was with good reason that – ever since that first Act more than 70 years ago – we have required that telephone companies not discriminate in terms of providing quality access to the person or business being contacted on the other end of the line. Why? Because with only one network providing the access to this fledgling technology, Congress understood it had a responsibility to ensure this new communications marvel could flourish for all people – everywhere in the country.

Well, when it comes to Internet network operators – the phone companies and the cable companies – we have essentially the same situation with a monopoly or at best duopoly providing consumers with service...in fact, 99.5 percent of people who subscribe to broadband receive the service from a cable or phone company. And indeed, the same essential nondiscrimination principle was applied from the 1991 birth of the commercial Internet, through the telecommunications Act of 1996, all the way up to last year – when, regrettably, the FCC abolished this principle – for the Internet only, I might add – when it reclassified all broadband services as “information services.”

So what are the implications we seek to address? Well, no sooner than the non-discrimination principle was removed, executives of every major telephone and cable company announced intentions to charge websites for access for priority Internet delivery service. In other words, establish a “class system” for the Internet – with the “haves” able to afford to pay this “toll” for their websites traveling the fast lane and the “have nots” relegated to the breakdown lane. To make matters worse, there is nothing to guarantee that a network operator will offer space on the fast lane - at any price - to those who require it to survive. Removal of the Internet’s founding principle will quell innovation and centralize the fate of the Internet into the hands of the few – it will no longer be the “World Wide Web – but rather a monopolistic and duopolistic-controlled network.

Moreover, the result would constitute nothing less than a hidden tax on the Internet. How ironic there is an amendment before this committee to make permanent the Internet Tax Moratorium that’s been in existence since 1998 – a measure I strongly support – and yet, we would stand by and allow private companies to, in essence, be the ones to impose a tax on the Internet, and at far greater a cost?! A cost that will eventually be passed to consumers? And why – to further enhance the profits of a select few providers at the expense of small businesses and those same consumers?

In fact, during Internet moratorium debates in the Senate, as one Senator said, “I think everyone in the Senate would want to help the Internet grow and flourish as a viable tool for education, information, and commerce, I stand on the side of freedom of the Internet, trusting free people and free entrepreneurs – not on the side of making this advancement in technology easier to tax for the tax collectors.

I have nothing against companies making a profit. But the Internet isn’t the property of the network operators. It isn’t theirs to tax – it shouldn’t be anyone’s to tax. And for many content providers, this will be an unsurmountable barrier between an idea and a world audience.

This would be the first time we’ve ever allowed distinctions to be made on the Internet in terms of quality of transmission to consumers. This would be like calling someone on the phone, and having the quality of the connection predicated on if the phone company had a special financial deal with the person on the other end of the line! Yet for the first time we would permit providers to dictate content by dictating the terms of transmission to consumers – we’ve never allowed these kind of distinctions in the history of our telecommunications laws why start now?

We shouldn’t have broadband network operators picking winners and losers ...picking and choosing which websites are available on their network – that’s the cable model but hasn’t and shouldn’t be the Internet model. Yet, unfortunately, the “Internet Consumer Bill of Rights” contained in the bill before us does nothing to address any of these concerns. While it guarantees consumers access to content and applications on the web, the content and applications available to consumers will still be significantly diminished because it does nothing to prevent the creation a two-tiered Internet. Make no mistake, the “Internet Consumer Bill of Rights” guarantees consumers all the choice and selection of a Soviet supermarket. A consumer may be able to go inside, but what is available on the shelves could be dismal.

Shouldn’t consumers have the right to unfettered access? Don’t we want the Internet to continue as a powerful engine of economic growth? Or would we rather stand idly by while barriers are erected...would we rather condone taxing websites...taxing consumers...taxing entrepreneurs...taxing America’s growth. Do we want to drive innovation abroad to all the other countries that have enshrined the principles of net-neutrality? That’s not my vision for the future of the Internet and I doubt it’s the vision of almost any consumer I can think of in America.

Mr. Chairman, my amendment prevents the creation of a two-tiered Internet. The language does not impose old telephone regulations on the Internet. It does nothing to prevent network operators from getting a fair return on their investment - which they will continue to do through the collection of access fees and the offering of new competitive services. And indeed, let’s keep in mind that, in 2003, long before the non-discrimination principle was lifted, phone companies announced their plans to deploy next-generation fiber networks. They knew then they would be able to get a return on their investments. And my measure clearly spells out that this principle does not apply to television service, thus allowing the rollout of cable competition to proceed – again, let me be clear – this is not about TV or telephone – this is about the Internet.

This amendment is not a solution in search of a problem. Once we allow a two-tiered Internet to be in place, we will not be able to get the genie back in the bottle. We will have opened to door to allow the utopia of communications systems to fall victim to suffocating bottlenecks. Almost every other industrialized nation has enshrined a non-discrimination philosophy - and we should as well to dissuade American innovators from moving abroad. We must act now to prevent those who own the network from becoming gatekeepers - via discriminatory taxes - to the greatest communications tool in the history of mankind. We must act now to preserve the Internet as we know it – and as it should remain.

I encourage my colleagues to join me, Senator Dorgan, and 761 small business and organizations - ranging from the Christian Coalition to the AARP- in supporting this amendment. As David Clough with the Maine National Federal of Small Businesses said in a recent news article, “the smaller business owner sometimes does need the government to set rules so that sheer size does not win out.” Ultimately, just as Teddy Roosevelt sought to control large business seeking to become monopolies, we must take action to prevent large companies from taking control over the web and so I urge my colleagues to support this amendment.

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